EXHIBIT 10.7.1
CALLIDUS SOFTWARE INC.
2003 STOCK INCENTIVE PLAN
(AS RESTATED AUGUST 31, 2004)
1. Purposes of the Plan. The purposes of this Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees, Directors and Consultants and to
promote the success of the Company's business.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan in accordance with Section 4 hereof.
(b) "Applicable Laws" means the requirements relating to the
administration of stock plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any other country or jurisdiction where Awards are
granted under the Plan.
(c) "Award" means any Option or other stock-based award granted
under this Plan.
(d) "Board" means the Board of Directors of the Company.
(e) "Code" means the U.S. Internal Revenue Code of 1986, as amended.
(f) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 hereof.
(g) "Common Stock" means the common stock, par value $0.001 per
share, of the Company.
(h) "Company" means Callidus Software Inc., a Delaware corporation.
(i) "Consultant" means any person who is engaged by the Company or
any Parent or Subsidiary to render consulting or advisory services to such
entity.
(j) "Director" means a member of the Board of Directors of the
Company.
(k) "Employee" means any person employed by the Company or any
Parent or Subsidiary of the Company. A Service Provider shall not cease to
be an Employee in the case of (i) any leave of absence approved by the
Company or protected as a matter of local law or (ii) transfers between
locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. Neither service as a Director nor payment of
a director's fee by the Company shall be sufficient to constitute
"employment" by the Company.
(l) "Exchange Act" means the U.S. Securities Exchange Act of 1934,
as amended.
(m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported)
as quoted on such exchange or system on the date of determination
(or if such date is not a trading date, on the previous trading
date), as reported in The Wall Street Journal or such other source
as the Administrator deems reliable;
(ii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "Option" means a stock option granted pursuant to the Plan.
(q) "Option Agreement" means an agreement evidencing the terms and
conditions of an individual Option grant. Any Option Agreement is subject
to the terms and conditions of the Plan.
(r) "Optionee" means the holder of an outstanding Option granted
under the Plan.
(s) "Outside Director" means a Director who is not an Employee.
(t) "Participant" means the holder of an outstanding Award granted
under the Plan.
(u) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this 2003 Stock Incentive Plan.
(w) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3.
(x) "Service Provider" means an Employee, Director or Consultant.
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(y) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 below.
(z) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Subject to the provisions of Section 13 of the Plan, the maximum
aggregate number of Shares which may be issued under the Plan is 2,000,000
shares, plus (x) any Shares remaining available for grant of awards under
the Company's 1997 Stock Option Plan on the effective date of the Plan and
(y) an annual increase on July 1 of each year during the term of the Plan
beginning July 1, 2004, in each case in an amount equal to the lesser of
(i) 2,800,000 shares, (ii) 5.0% of the outstanding shares on the
immediately preceding date or (iii) an amount determined by the Board. The
Shares may be authorized but unissued, or reacquired, shares or treasury
shares.
(b) No Participant may receive Options and stock appreciation rights
under the Plan in any calendar year that relate to more than 1,500,000
Shares.
(c) If any Shares covered by an Award, or to which such an Award
relates, are forfeited, or if an Award otherwise terminates in whole or in
part without the delivery of the full number of Shares related thereto,
then the Shares covered by such Award, or to which such Award relates, to
the extent of any such forfeiture or termination, shall again be, or shall
become, available for issuance under the Plan. Shares that have been
issued but are repurchased by, or surrendered or forfeited to, the Company
shall become available for future grant under the Plan. For purposes of
this paragraph, awards and options granted under the Company's 1997 Stock
Option Plan shall be treated as Awards.
4. Administration of the Plan.
(a) The Plan shall be administered by the Board or a Committee
appointed by the Board, which Committee shall be constituted to comply
with Applicable Laws.
(i) To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the
Plan shall be administered by a Committee of two or more
"non-employee directors" within the meaning of Section 162(m) of the
Code.
(ii) To the extent desirable to qualify transactions hereunder
as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(b) Subject to the provisions of the Plan and, in the case of a
Committee, the specific duties delegated by the Board to such Committee,
and subject to the approval of any relevant authorities, the Administrator
shall have the authority in its discretion:
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(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Awards may from
time to time be granted hereunder;
(iii) to determine the number of Shares to be covered by each
such award granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, of any Award
granted hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Awards may be
exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Award or the Common Stock
relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vi) to amend the terms of any Award; provided that (A) no
such amendment shall directly or indirectly reduce the exercise
price of any Award without the approval of the Company's
stockholders and (B) no such amendment shall impair the rights of
any Participant without the consent of the Participant;
(vii) to grant Awards with such terms as the Administrator
deems necessary or appropriate in order to comply with or take
advantage of the laws of any jurisdiction in which a Participant
resides or is employed or to establish a sub-plan under this Plan
for such purposes;
(viii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to
sub-plans established by the Administrator for the purpose of
qualifying for preferred tax treatment under foreign tax laws or
complying with foreign securities or other legal requirements;
(ix) to allow Participants to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares
to be issued upon exercise of an Award that number of Shares having
a Fair Market Value equal to the amount required to be withheld; and
(x) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(c) All decisions, determinations and interpretations of the
Administrator shall be final and binding on all Participants.
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5. Eligibility.
(a) Awards may be granted to Service Providers as determined by the
Administrator in its sole discretion, except that Incentive Stock Options
may be granted only to Employees.
(b) Neither the Plan nor any Award shall confer upon any Participant
any right with respect to continuing the Participant's relationship as a
Service Provider with the Company or its Subsidiary, nor shall it
interfere in any way with his or her right or the right of the Company or
its Subsidiary, as appropriate, to terminate such relationship at any
time, with or without cause.
6. Term of Plan. The Plan shall become effective as determined by the
Board. It shall continue in effect for a term of ten years unless sooner
terminated under Section 14 of the Plan.
7. Terms of Options.
(a) The term of each Option shall be stated in the Option Agreement;
provided that the term shall be no more than ten (10) years from the date
of grant thereof. In the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the term of the Option shall be
five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement.
(b) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by the Optionee during any calendar
year (under all plans of the Company and any Parent or Subsidiary) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock Options. For
purposes of this Section 7(b), Incentive Stock Options shall be taken into
account in the order in which they were granted. The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to
such Shares is granted.
(c) The per share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the
Administrator, but in the case of any Incentive Stock Option shall be
subject to the following:
(A) the exercise price of any Incentive Stock Option
granted to an Employee who, at the time of grant of such
Option, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any
Parent or Subsidiary shall be no less than 110% of the Fair
Market Value per Share on the date of grant; and
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(B) the exercise price of any Incentive Stock Option
granted to any other Employee shall be no less than 100% of
the Fair Market Value per Share on the date of grant.
(d) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant). Such consideration may
consist of (1) cash, (2) check, (3) promissory note, (4) 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 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 such Option
shall be exercised, (5) consideration received by the Company under a
cashless exercise program implemented by the Company in connection with
the Plan, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
8. Exercise of Option.
(a) Any Option granted hereunder shall be exercisable according to
the terms hereof at such times and under such conditions as determined by
the Administrator and set forth in the Option Agreement. Unless the
Administrator provides otherwise or unless required by local law, vesting
of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.
(b) An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Option
Agreement and the Plan. Shares issued upon exercise of an Option shall be
issued in the name of the Optionee or, if requested by the Optionee, in
the name of the Optionee and his or her spouse. Until the Shares are
issued (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the Shares are
issued, except as provided in Section 13 of the Plan.
(c) Exercise of an Option in any manner shall result in a decrease
in the number of Shares thereafter 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.
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9. Termination of Relationship as a Service Provider.
(a) Termination. If an Optionee ceases to be a Service Provider,
such Optionee may exercise his or her Option within such period of time as
is specified in the Option Agreement (of at least 30 days) to the extent
that the Option is vested on the date of termination (but in no event
later than the expiration of the term of the Option as set forth in the
Option Agreement). In the absence of a specified time in the Option
Agreement, the vested portion of the Option shall remain exercisable for
90 days following the Optionee's termination. If, after termination, the
Optionee does not exercise his or her Option within the time specified
herein or in the Option Agreement, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(b) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's disability, the Optionee may
exercise an Option to the extent the Option is vested as of the date of
termination, but only within 12 months from the date of such termination
(and in no event later than the expiration date of the term of such Option
as set forth in the Option Agreement). If such disability is not a
"disability" as such term is defined in Section 22(e)(3) of the Code, in
the case of an Incentive Stock Option such Incentive Stock Option shall
automatically cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option on the day
three months and one day following such termination. If, after
termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered
by such Option shall revert to the Plan.
(c) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised at any time within 12 months following the
date of death (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement) to the extent vested as
of the date of death. The Option may be exercised by the executor or
administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of
descent or distribution. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(d) Buyout Provisions. The Administrator may at any time offer to
buy out, for a payment in cash or Shares, an Award previously granted,
based on such terms and conditions as the Administrator shall establish
and communicate to the Participant at the time that such offer is made.
10. Formula Grants to Outside Directors. Options may be granted to Outside
Directors in accordance with the policies established from time to time by the
Board specifying the number of shares (if any) to be subject to each such award
and the time(s) at which such awards shall be granted. The current policy with
respect to Options granted to Outside Directors under this Section, effective as
of the date of this Plan and continuing until modified or revoked by the Board
from time to time, shall be as follows:
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(a) Initial Grants. As of the date on which any Outside Director
first becomes a member of the Board, whether by election by the
stockholders or appointment by the Board, such individual shall be granted
automatically a Nonstatutory Stock Option to purchase 30,000 Shares (an
"Initial Option").
(b) Annual Grants. Immediately after the Company's regularly
scheduled annual meeting of stockholders each year, the following grants
shall be made (each, an "Annual Option"):
(i) Each Outside Director shall be granted automatically a
Nonstatutory Stock Option to purchase 10,000 Shares; provided that
if such Outside Director has served on the Board for less than one
year, the number of Shares subject to such Annual Option shall be
reduced pro rata based on the portion of the year that such Outside
Director has served on the Board.
(ii) The chair of the Audit Committee shall be granted
automatically a Nonstatutory Stock Option to purchase 10,000 Shares;
provided that if such Director has served in such capacity for less
than one year, the number of Shares subject to such Annual Option
shall be reduced pro rata based on the portion of the year that such
Director has served in such capacity.
(iii) The chair of the Compensation Committee and the
Nominating and Corporate Governance Committee each shall be granted
automatically a Nonstatutory Stock Option to purchase 5,000 Shares;
provided that if such Director has served in such capacity for less
than one year, the number of Shares subject to such Annual Option
shall be reduced pro rata based on the portion of the year that such
Director has served in such capacity.
(iv) The Company's Chairman of the Board (so long as such
position continues to be held by an Outside Director) shall be
granted automatically a Nonstatutory Stock Option to purchase 20,000
Shares; provided that if such Director has served in such capacity
for less than one year, the number of Shares subject to such Annual
Option shall be reduced pro rata based on the portion of the year
that such Director has served in such capacity.
(c) Terms of Options. Options granted to Outside Directors pursuant
to this Section 10 shall be on the following terms, unless otherwise
determined by the Board:
(i) The exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the Option.
(ii) Each Initial Option shall vest and become exercisable
over four years, with the first 25% vesting on the first anniversary
of the grant date and the remainder vesting monthly thereafter.
(iii) Each Annual Option shall be fully vested and exercisable
immediately.
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(iv) The term of each such Option shall be ten years.
11. Non-Transferability of Awards. Except as otherwise determined by the
Administrator, Awards may not be sold, pledged, 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
Participant, only by the Participant.
12. Other Stock Awards. The Administrator is hereby authorized to grant to
Participants such other Awards (including, without limitation, grants of
restricted stock, restricted stock units, stock bonus awards, and stock
appreciation rights) that are denominated or payable in, valued in whole or in
part by reference to, or otherwise based on or related to, Shares (including,
without limitation, securities convertible into Shares) as are deemed by the
Administrator to be consistent with the purposes of the Plan. Subject to the
terms of the Plan, the Administrator shall determine the terms and conditions of
such Awards, which shall be set forth in an Award Agreement.
13. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Award, and the number of shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Awards
have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, as well as the price per share of
Common Stock covered by each such outstanding Award, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock 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 of
Common Stock effected without receipt of consideration by the Company. The
conversion of any convertible securities of the Company shall not be
deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. 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 of Common Stock subject to an Award.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify
each Participant as soon as practicable prior to the effective date of
such proposed transaction. The Administrator in its discretion may provide
for a Participant to have the right to exercise his or her Award prior to
such transaction, including Shares as to which the Award would not
otherwise be exercisable. In addition, the Administrator may provide that
any Company repurchase option applicable to any Shares purchased upon
exercise of an Award shall lapse as to all such Shares, provided the
proposed dissolution or liquidation takes place at the time and in the
manner contemplated. To the extent it has not been previously exercised,
an Award will 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
with or into another corporation, or the sale of all or substantially all
of the assets of the Company, each outstanding Award shall be continued or
assumed or an equivalent award substituted by the Company or the successor
corporation or a Parent or Subsidiary of the successor corporation. In the
event that any Award is not so continued, assumed or substituted, such
Award shall become fully vested and exercisable. If an Award becomes fully
vested and exercisable in lieu of continuation, assumption or
substitution, the Administrator shall notify the Participant in writing or
electronically that the Award shall be fully exercisable for a period of
no less than 15 days from the date of such notice, and the Award shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Award shall be considered assumed if, following the merger
or sale of assets, the option or right confers the right to purchase or
receive, for each Share subject to the Award 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); provided that if such consideration received is not
solely common stock of the successor corporation or its Parent, the
Administrator may provide for the consideration to be received upon the
exercise of the Award, for each Share subject to the Award, to be solely
common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common
Stock.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Board shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to
comply with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan by the Board shall impair the rights
of any Participant with the consent of the Participant. Termination of the
Plan shall not affect the Administrator's ability to exercise the powers
granted to it hereunder with respect to Awards granted under the Plan
prior to the date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to any
Award granted hereunder unless the issuance and delivery of such Shares
shall comply with Applicable Laws.
(b) Tax Withholding. The Administrator shall require payment of any
amount the Company may determine to be necessary to withhold for any
income, employment or
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social insurance taxes or contributions, as applicable, as a result of the
exercise of an award.
16. Inability to Obtain Authority. The 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.
17. Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the degree and manner
required under Applicable Laws.
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CALLIDUS SOFTWARE, INC.
2003 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.
1 NOTICE OF STOCK OPTION GRANT
[Optionee's Name and Address]
The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:
Grant Number __________________________
Date of Grant __________________________
Vesting Commencement Date __________________________
Exercise Price per Share $_________________________
Total Number of Shares Granted __________________________
Total Exercise Price $_________________________
Type of Option: [Nonstatutory Stock Option]
Term Expiration Date: __________________________
Vesting Schedule:
This Option shall be exercisable, in whole or in part, according to the
following vesting schedule:
[25% of the Shares subject to the Option shall vest and become exercisable
12 months after the Vesting Commencement Date, and 1/48th of the Shares subject
to the Option shall vest and become exercisable each month thereafter, subject
to Optionee's continuing to be a Service Provider on such dates.]
Termination Period:
This Option shall be exercisable for 90 days after Optionee ceases to be a
Service Provider. Upon Optionee's death or disability, this Option may be
exercised for such longer period as provided in the Plan. In no event may
Optionee exercise this Option after the Term/Expiration Date as provided above.
2 AGREEMENT
2.1 Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant (the "Optionee"), an option (the
"Option") to purchase the number of Shares set forth in the Notice of Grant, at
the exercise price per Share set forth in the Notice of Grant (the "Exercise
Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 15(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.
2.2 Exercise of Option.
2.2.1 Right to Exercise. This Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement.
2.2.2 Method of Exercise. This Option shall be exercisable by
delivery of an exercise notice in the form attached as Exhibit A (the "Exercise
Notice") which shall state the election to exercise the Option, the number of
Shares with respect to which the Option is being exercised, and such other
representations and agreements as may be required by the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option shall be deemed to be exercised upon receipt by
the Company of such fully executed Exercise Notice accompanied by the aggregate
Exercise Price. The Administrator shall require payment of any amount the
Company may determine to be necessary to withhold for taxes as a result of the
exercise of an award. In the absence of any other arrangement, Optionee agrees
that the Company shall be entitled to withhold from any payments to be made by
the Company to Optionee an amount equal to such withholding obligations.
No Shares shall be issued pursuant to the exercise of an Option
unless such issuance and such exercise complies with Applicable laws. Assuming
such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.
2.3 Lock-Up Period. Optionee hereby agrees that, if so requested by
the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of any
securities of the Company under the Securities Act, Optionee shall not sell or
otherwise transfer any Shares or other securities of the Company during the
180-day period (or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company) (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction
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shall apply only to the first registration statement of the Company to become
effective under the Securities Act that includes securities to be sold on behalf
of the Company to the public in an underwritten public offering under the
Securities Act. The Company may impose stop-transfer instructions with respect
to securities subject to the foregoing restrictions until the end of such Market
Standoff Period.
2.4 Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:
2.4.1 cash or check;
2.4.2 consideration received by the Company under a formal cashless
exercise program adopted by the Company in connection with the Plan; or
2.4.3 surrender of other Shares which, (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (ii) have a Fair Market Value on
the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
2.5 Restrictions on Exercise. This Option may not be exercised until
such time as the Plan has been approved by the stockholders of the Company, or
if the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any Applicable
Law.
2.6 Non-Transferability of Option. This Option may not be
transferred in 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
Optionee. The terms of the Plan and this Option Agreement shall be binding upon
the executors, administrators, heirs, successors and assigns of the Optionee.
2.7 Term of Option. This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option.
2.8 Entire Agreement Governing Law. The Plan is incorporated herein
by reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of the State of California.
2.9 No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
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TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan 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 has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option. Optionee
further agrees to notify the Company upon any change in the residence address
indicated below.
OPTIONEE: CALLIDUS SOFTWARE, INC.
- --------------------------- --------------------------
Signature By
- --------------------------- --------------------------
Print Name Title
- ---------------------------
- ---------------------------
Residence Address
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EXHIBIT A
2003 STOCK INCENTIVE PLAN
EXERCISE NOTICE
Callidus Software, Inc.
160 West Santa Clara Street
Suite 1500
San Jose, CA 95113
Attention: Secretary
Section 1.01 Exercise of Option. Effective as of today, _________, 20__,
the undersigned ("Optionee") hereby elects to exercise Optionee's option to
purchase __________ shares of the Common Stock (the "Shares") of Callidus
Software Inc.(the "Company") under and pursuant to the 2003 Stock Incentive Plan
(the "Plan") and the Stock Option Agreement dated ________, 20__ (the "Option
Agreement").
Section 1.02 Delivery of Payment. Purchaser herewith delivers to the
Company the full purchase price of the Shares, as set forth in the Option
Agreement.
Section 1.03 Representations of Optionee. (a) Optionee acknowledges that
Optionee has received, read and understood the Plan and the Option Agreement and
agrees to abide by and be bound by their terms and conditions.
(b) Optionee acknowledges that Optionee has received and had
access to such information as Optionee considers necessary or
appropriate for deciding whether to invest in the Shares.
Specifically, Optionee has received and read a copy of the
prospectus describing the Plan.
Section 1.04 Rights as Stockholder. Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), 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. The Shares shall be issued to
the Optionee as soon as practicable after the Option is exercised. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of issuance except as provided in Section 13 of the Plan.
Section 1.05 Tax Consultation. Optionee understands that Optionee may
suffer adverse tax consequences as a result of Optionee's purchase or
disposition of the Shares. Optionee represents that Optionee has consulted with
any tax consultants 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.
Submitted by: Accepted by:
OPTIONEE: CALLIDUS SOFTWARE, INC.
- ------------------------------- ----------------------------------
Signature By
- ------------------------------- ----------------------------------
Print Name Its
Address Address:
- ------------------------------- 160 West Santa Clara Street, Suite
1500
San Jose, CA 95113
- -------------------------------
----------------------------------
Date Received
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