EXHIBIT 10.3
PLANAURUM SOFTWARE, INC.
1996 DIRECTOR OPTION PLAN
1. Purposes of the Plan. The purposes of this Aurum Software, Inc.,
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1996 Director Option Plan are to attract and retain the best available personnel
for service as Outside Directors (as defined herein) of the Company, to provide
additional incentive to the Outside Directors of the Company to serve as
Directors, and to encourage their continued service on the Board.
All options granted hereunder shall be nonstatutory stock options.
2. Definitions. As used herein, the following definitions shall apply:
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(a) "Board" shall mean the Board of Directors of the Company.
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(b) "Code" shall mean the Internal Revenue Code of 1986, as
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amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
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(d) "Company" shall mean Aurum Software, Inc., a Delaware
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corporation.
(e) "Director" shall mean a member of the Board.
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(f) "Employee" shall mean any person, including officers and
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Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a Director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934,
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as amended.
(h) "Fair Market Value" shall mean, as of any date, the value of
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Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including, without limitation, the
National Market of The Nasdaq Stock Market, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the date of
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable;
(ii) If the Common Stock is quoted on The Nasdaq Stock Market
(but not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the date of determination, as reported in The
Wall Street Journal or such other source as the Board deems reliable, or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.
(i) "Inside Director" shall mean a Director who is an Employee.
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(j) "Option" shall mean a stock option granted pursuant to the
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Plan.
(k) "Optioned Stock" shall mean the Common Stock subject to an
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Option.
(l) "Optionee" shall mean a Director who holds an Option.
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(m) "Outside Director" shall mean a Director who is not an
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Employee.
(n) "Parent" shall mean a "parent corporation," whether now or
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hereafter existing, as defined in Section 424(e) of the Code.
(o) "Plan" shall mean this 1996 Director Option Plan.
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(p) "Share" shall mean a share of Common Stock, as adjusted in
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accordance with Section 10 of the Plan.
(q) "Subsidiary" shall mean a "subsidiary corporation," whether
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now or hereafter existing, as defined in Section 424(f) of the Internal Revenue
Code of 1986.
3. Stock Subject to the Plan. Subject to the provisions of Section 10
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 150,000/*/ Shares of Common Stock (the "Pool"). The
Shares may be authorized, but unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated). Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan.
4. Administration and Grants of Options under the Plan.
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(a) Procedure for Grants. All grants of Options to Outside
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Directors under this Plan shall be automatic and nondiscretionary and shall be
made strictly in accordance with the following provisions:
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/*/ After adjustment for the one-for-four reverse split of the Common
Stock in September 1996.
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(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted an
Option to purchase 18,750 Shares/*/ (the "First Option") on the date on which
such person first becomes an Outside Director, whether through election by the
stockholders of the Company or appointment by the Board to fill a vacancy;
provided, however, that an Inside Director who ceases to be an Inside Director
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but who remains a Director shall not receive a First Option; and provided
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further, that any Outside Director who already serves in such capacity on the
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date of adoption of the Plan by the Board shall not receive a First Option.
(iii) Each Outside Director shall be automatically granted an
Option to purchase 18,750 Shares/*/ (a "Subsequent Option") at the next meeting
of the Board of Directors following the Annual Meeting of Stockholders in each
year commencing with the 1997 Annual Meeting of Stockholders provided he or she
is then an Outside Director and if as of such date, he or she shall have served
on the Board for at least the preceding six (6) months.
(iv) Notwithstanding the provisions of subsections (ii) and
(iii) hereof, any exercise of an Option made before the Company has obtained
stockholder approval of the Plan in accordance with Section 16 hereof shall be
conditioned upon the Company's obtaining such stockholder approval of the Plan
in accordance with Section 16 hereof.
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/*/ After adjustment for the one-for-four revenue split of the Common
Stock in September 1996.
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(v) The terms of an Option granted hereunder shall be
as follows:
(A) the term of the Option shall be ten (10) years.
(B) the Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Sections 8 and 10 hereof.
(C) the exercise price per Share shall be one hundred
percent (100%) of the Fair Market Value per Share on the date of grant of the
Option. In the event that the date of grant of the Option is not a trading day,
the exercise price per Share shall be one hundred percent (100%) of the Fair
Market Value on the next trading day immediately following the date of grant of
the Option.
(D) subject to Section 10 hereof, the Option shall become
exercisable as to 1/48th of the Shares subject to the Option on each monthly
anniversary of its date of grant, provided that the Optionee continues to
serve as a Director on such dates.
(vii) In the event that any Option granted under the Plan would
cause the number of Shares subject to outstanding Options plus the number of
Shares previously purchased under Options to exceed the Pool, then the remaining
Shares available for Option grant shall be granted under Options to the Outside
Directors on a pro rata basis. No further grants shall be made until such time,
if any, as additional Shares become available for grant under the Plan through
action of the Board or the stockholders to increase the number of Shares which
may be issued under the Plan or through cancellation or expiration of Options
previously granted hereunder.
5. Eligibility. Options may be granted only to Outside Directors. All
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Options shall be automatically granted in accordance with the terms set forth in
Section 4 hereof.
The Plan shall not confer upon any Optionee any right with respect
to continuation of service as a Director or nomination to serve as a Director,
nor shall it interfere in any way with any rights which the Director or the
Company may have to terminate the Director's relationship with the Company at
any time.
6. Term of Plan. The Plan shall become effective upon the later to
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occur of its approval by the stockholders of the Company as described in
Section 16 of the Plan or the effective date of the Company's initial public
offering of its Common Stock that is registered with the Securities and Exchange
Commission. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 11 of the Plan.
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7. Form of Consideration. The consideration to be paid for the Shares
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to be issued upon exercise of an Option, including the method of payment, shall
consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (iv) delivery of a properly
executed exercise notice together with such other documentation as the Company
and the broker, if applicable, shall require to effect an exercise of the Option
and delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (v) any combination of the foregoing methods of payment.
8. Exercise of Option.
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(a) Procedure for Exercise; Rights as a Stockholder. Any Option
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granted hereunder shall be exercisable at such times as are set forth in
Section 4 hereof; provided, however, that no Options shall be exercisable until
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stockholder approval of the Plan in accordance with Section 16 hereof has been
obtained.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 7 of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided in Section 10 of
the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Continuous Status as a Director. Subject to
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Section 10 hereof, in the event an Optionee's status as a Director terminates
(other than upon the Optionee's death or total and permanent disability (as
defined in Section 22(e)(3) of the Code)), the Optionee may exercise his or her
Option, but only within three (3) months following the date of such termination,
and only to the extent that the Optionee was entitled to exercise it on the date
of such termination (but in no event later than the expiration of its ten (10)
year term). To the extent that the Optionee was not entitled to exercise an
Option on the date of such termination, and to the extent that the Optionee does
not exercise such Option (to the extent otherwise so entitled) within the time
specified herein, the Option shall terminate.
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(c) Disability of Optionee. In the event Optionee's status as a
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Director terminates as a result of total and permanent disability (as defined in
Section 22(e)(3) of the Code), the Optionee may exercise his or her Option, but
only within twelve (12) months following the date of such termination, and only
to the extent that the Optionee was entitled to exercise it on the date of such
termination (but in no event later than the expiration of its ten (10) year
term). To the extent that the Optionee was not entitled to exercise an Option on
the date of termination, or if he or she does not exercise such Option (to the
extent otherwise so entitled) within the time specified herein, the Option shall
terminate.
(d) Death of Optionee. In the event of an Optionee's death, the
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Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance may exercise the Option, but only within twelve (12)
months following the date of death, and only to the extent that the Optionee was
entitled to exercise it on the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not
entitled to exercise an Option on the date of death, and to the extent that the
Optionee's estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.
9. Non-Transferability of Options. The Option may not be sold, pledged,
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assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
10. Adjustments Upon Changes in Capitalization, Dissolution, Merger,
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Asset Sale or Change of Control.
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(a) Changes in Capitalization. Subject to any required action by
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the stockholders of the Company, the number of Shares covered by each
outstanding Option, the number of Shares which have been authorized for issuance
under the Plan but as to which no Options have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option, as well
as the price per Share covered by each such outstanding Option, and the number
of Shares issuable pursuant to the automatic grant provisions of Section 4
hereof shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
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convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
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dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it shall terminate immediately prior to the
consummation of such proposed action.
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(c) Merger or Asset Sale. In the event of a merger of the Company
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with or into another corporation, or the sale of all or substantially all of the
assets of the Company, each outstanding Option may be assumed or an equivalent
option may be substituted by the successor corporation or a Parent or Subsidiary
thereof (the "Successor Corporation"). If the Successor Corporation assumes or
substitutes an equivalent option for the Option, the Option or equivalent option
shall continue to become exercisable as provided in Section 4 hereof for so long
as Optionee remains a Director or the Optionee serves as a director of the
Successor Corporation. Following such assumption or substitution, if the
Optionee's status as a Director or director of the Successor Corporation, as
applicable, is terminated other than upon a voluntary resignation by the
Optionee, the Option or option shall become fully exercisable, including as to
Shares for which it would not otherwise be exercisable. Thereafter, the Option
or option shall remain exercisable in accordance with Sections 8(c) through (e)
above.
In the event that the Successor Corporation does not agree to assume the
Option or to substitute an equivalent option, each outstanding Option shall
become fully vested and exercisable, including as to Shares as to which it would
not otherwise be exercisable. In such event, the Board shall notify the
Optionee that the Option shall be fully exercisable for a period of thirty (30)
days from the date of such notice, and the Option shall terminate upon the
expiration of such period. For the purposes of this Section 10(c), the Option
shall be considered assumed if, following the merger or sale of assets, the
Option confers the right to purchase, for each Share of Optioned Stock subject
to the Option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares).
11. Amendment and Termination of the Plan.
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(a) Amendment and Termination. Except as set forth in Section 4,
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the Board may at any time amend, alter, suspend, or discontinue the Plan, but no
amendment, alteration, suspension, or discontinuation shall be made which would
impair the rights of any Optionee under any grant theretofore made, without his
or her consent. In addition, to the extent necessary and desirable to comply
with Rule 16b-3 under the Exchange Act (or any other applicable law or
regulation), the Company shall obtain stockholder approval of any Plan amendment
in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
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termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated.
12. Time of Granting Options. The date of grant of an Option shall, for
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all purposes, be the date determined in accordance with Section 4 hereof.
13. Conditions Upon Issuance of Shares. Shares shall not be issued
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pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act
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of 1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
14. Reservation of Shares. The Company, during the term of this Plan,
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will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
15. Option Agreement. Options shall be evidenced by written option
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agreements in such form as the Board shall approve.
16. Stockholder Approval. Continuance of the Plan shall be subject to
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approval by the stockholders of the Company at or prior to the first annual
meeting of stockholders held subsequent to the granting of an Option hereunder.
Such stockholder approval shall be obtained in the degree and manner required
under applicable state and federal law.
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AURUM SOFTWARE, INC.
DIRECTOR STOCK OPTION AGREEMENT
Aurum Software, Inc., a Delaware corporation (the "Company"), has granted
to ______________________________________ (the "Optionee"), an option to
purchase a total of __________________ (_________) shares of the Company's
Common Stock (the "Optioned Stock"), at the price determined as provided herein,
and in all respects subject to the terms, definitions, and provisions of the
Company's 1996 Director Option Plan (the "Plan") adopted by the Company, which
is incorporated herein by reference. The terms defined in the Plan shall have
the same defined meanings herein.
17. Nature of the Option. This Option is a nonstatutory option and is
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not intended to qualify for any special tax benefits to the Optionee.
18. Exercise Price. The exercise price is $_______ for each share of
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Common Stock.
19. Exercise of Option. This Option shall be exercisable during its term
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in accordance with the provisions of Section 8 of the Plan as follows:
(a) Right to Exercise.
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(i) This Option shall become exercisable in installments
cumulatively [with respect to twenty-five percent (25%) of the Optioned Stock on
the first anniversary of the date of grant, and 1/48th of the Shares each month
thereafter so that one hundred percent (100%) of the Optioned Stock shall be
exercisable four (4) years after the date of grant][or][with respect to 1/48th
of the Shares of the Optioned Stock on each monthly anniversary of its date of
grant.] In no event shall any Option be exercisable prior to the date the
shareholders of the Company approve the Plan.
(ii) This Option may not be exercised for a fraction of a
share.
(iii) In the event of Optionee's death, disability, or other
termination of service as a Director, the exercisability of the Option shall be
governed by Section 8 of the Plan.
(b) Method of Exercise. This Option shall be exercisable by
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written notice which shall state the election to exercise the Option and the
number of Shares in respect of which the Option is being exercised. Such written
notice, in the form attached hereto as Exhibit A, shall be signed by the
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Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company. The written notice shall be accompanied by payment of the
exercise price.
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20. Method of Payment. Payment of the exercise price shall be by any of
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the following, or a combination thereof, at the election of the Optionee:
(a) cash;
(b) check;
(c) surrender of other shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (y) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised; or
(iv) delivery of a properly executed exercise notice together with
such other documentation as the Company and the broker, if applicable, shall
require to effect an exercise of the Option and delivery to the Company of the
sale or loan proceeds required to pay the exercise price.
21. Restrictions on Exercise. This Option may not be exercised if the
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issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulations, or if such issuance
would not comply with the requirements of any stock exchange upon which the
Shares may then be listed. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
22. Non-Transferability of Option. This Option may not be transferred in
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any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
23. Term of Option. This Option may not be exercised more than ten (10)
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years from the date of grant of this Option, and may be exercised during such
period only in accordance with the Plan and the terms of this Option.
24. Taxation Upon Exercise of Option. Optionee understands that, upon
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exercise of this Option, he or she will recognize income for tax purposes in an
amount equal to the excess of the then Fair Market Value of the Shares purchased
over the exercise price paid for such Shares. Since the Optionee is subject to
Section 16(b) of the Securities Exchange Act of 1934, as amended, under certain
limited circumstances the measurement and timing of such income (and the
commencement of any capital gain holding period) may be deferred, and the
Optionee is advised to contact a tax advisor concerning the application of
Section 83 in general and the availability a Section 83(b) election in
particular in connection with the exercise of the Option. Upon a resale of such
Shares by the Optionee, any difference between the sale
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price and the Fair Market Value of the Shares on the date of exercise of the
Option, to the extent not included in income as described above, will be treated
as capital gain or loss.
DATE OF GRANT: ______________
AURUM SOFTWARE, INC.
a Delaware corporation
By:
Name:
Title:
Optionee acknowledges receipt of a copy of the Plan, a copy of which is
attached hereto, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all of the terms
and provisions thereof. Optionee hereby agrees to accept as binding,
conclusive, and final all decisions or interpretations of the Board upon any
questions arising under the Plan.
Dated: _________________
______________________________
Optionee
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EXHIBIT A
DIRECTOR STOCK OPTION EXERCISE NOTICE
Aurum Software, Inc.
3385 Scott Boulevard
Santa Clara, CA 95054
Attention: Corporate Secretary
1. Exercise of Option. The undersigned ("Optionee") hereby elects to
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exercise Optionee's option to purchase ______ shares of the Common Stock (the
"Shares") of Aurum Software, Inc. (the "Company") under and pursuant to the
Company's 1996 Director Option Plan and the Director Option Agreement dated
_______________ (the "Agreement").
2. Representations of Optionee. Optionee acknowledges that Optionee has
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received, read, and understood the Agreement.
3. Federal Restrictions on Transfer. Optionee understands that the Shares
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must be held indefinitely unless they are registered under the Securities Act of
1933, as amended (the "1933 Act"), or unless an exemption from such registration
is available, and that the certificate(s) representing the Shares may bear a
legend to that effect. Optionee understands that the Company is under no
obligation to register the Shares and that an exemption may not be available or
may not permit Optionee to transfer Shares in the amounts or at the times
proposed by Optionee.
4. Tax Consequences. Optionee understands that Optionee may suffer adverse
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tax consequences as a result of Optionee's purchase or disposition of the
Shares. Optionee represents that Optionee has consulted with any tax
consultant(s) Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
5. Delivery of Payment. Optionee herewith delivers to the Company the
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aggregate purchase price for the Shares that Optionee has elected to purchase
and has made provision for the payment of any federal or state withholding taxes
required to be paid or withheld by the Company.
6. Entire Agreement. The Agreement is incorporated herein by reference.
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This Exercise Notice and the Agreement constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements of
the Company and Optionee with respect to the subject matter hereof.
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This Exercise Notice and the Agreement are governed by California law except for
that body of law pertaining to conflict of laws.
Submitted by: Accepted by:
OPTIONEE: AURUM SOFTWARE, INC.
__________________________________ By:_________________________________
Name:
Title:______________________________
Address: Address:
3385 Scott Boulevard
Santa Clara, CA 95054
Dated:____________________________ Dated:_____________________________
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