Non-Plan Stock Option Agreement - Callidus Software Inc. and Reed Taussig
CALLIDUS SOFTWARE INC. NON-PLAN STOCK OPTION AGREEMENT
This Non-Plan Stock Option Agreement is entered into as of APRIL 2, 2002
("Date of Grant"), between Callidus Software Inc., a Delaware Corporation (the
"Company") and REED TAUSSIG (the "Optionee").
1. Option Grant. The Company hereby grants to Optionee an Option (the
"Option") to purchase 250,000 shares of common stock, par value $0.001, of the
Company ("Shares") at an exercise price of $0.50 per share, on the terms and
subject to the conditions set forth in this Option Agreement.
2. Option Exercise.
(a) Right to Exercise. To the extent the Option has become vested
in accordance with paragraph (b) below, the Option may be exercised at any time
during the term of the Option as set forth in Section 7. In the event of
termination of Optionee's employment with the Company, the exercisability of the
Option shall be governed by Section 7 of this Option Agreement.
(b) Vesting. The Shares subject to the Option shall become vested
and exercisable in accordance with the following schedule, subject to Optionee's
continuing employment with the Company or any of the Company's subsidiaries:
(i) 100% of the Shares subject to the Option shall become
vested and exercisable on the seventh anniversary of the
Date of Grant (the "Fully Vested Date").
(ii) Notwithstanding Section 2(b)(i) above, upon the
occurrence of an Acceleration Event (as defined below),
one-forth (1/4th) of the Shares subject to the Option
shall become vested and exercisable upon the date of the
Acceleration Event, and one-thirty-sixth (1/36th) of the
Shares subject to the Option shall vest each month
thereafter,
An "Acceleration Event" is defined as an Initial Public Offering of
equity securities ("IPO") or upon a sale of the Company with a
minimum valuation of $6.67 per share.
(c) Method of Exercise. During the term of the Option, Optionee
(or his representative, devisee or heir, as applicable) may exercise any vested
portion of the Option by delivering to the Company written notice in the form
attached hereto as Exhibit A together with payment of the exercise price. Such
written notice shall be signed by Optionee and shall be delivered in person or
by certified mail to the Company. The Option may not be exercised for a fraction
of a Share. Optionee shall not be entitled to any rights as a stockholder of the
Company in respect of any Shares covered by the Option until such Shares shall
have been paid for in full and issued to Optionee.
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3. Optionee's Representations. In the event the Shares purchasable
pursuant to the exercise of the Option have not been registered under the
Securities Act of 1933 ("Securities Act"), as amended, at the time the Option is
exercised, Optionee shall, if required by the Company, concurrently with the
exercise of all or any portion of the Option, deliver to the Company his
Investment Representation Statement in the form attached hereto as Exhibit B.
4. Definition of Fair Market Value. "Fair Market Value" means, as of
any date, the value of the common stock of the Company as determined in good
faith by the Board of Directors of the Company (the "Board"), provided, however,
that if on such date the common stock of the Company is listed on a national
stock exchange or quotation system, then the fair market value of the common
stock of the Company shall be the closing sales price for the last market
trading day prior to such date, as reported in The Wall Street Journal or such
other source as the Board deems reliable.
5. Method of Payment. Payment of the exercise price shall be made by
any of the following methods, or a combination thereof:
(a) cash;
(b) check; or
(c) surrender of other shares of common stock of the Company which
(A) in the case of Shares acquired pursuant to the exercise of a Company option,
have been owned by Optionee for more than six (6) months (or such other period
required to avoid a charge to the Company's earnings) on the date of surrender,
and (B) have a Fair Market Value on the date of surrender equal to the exercise
price of the Shares as to which the Option is being exercised.
6. Restrictions on Exercise. No Shares shall be issued pursuant to the
exercise of an Option unless both the exercise of the Option and issuance of
Shares comply with all relevant provisions of applicable federal and state
securities and other laws and regulations and the requirements of any stock
exchange upon which the Shares may then be listed. As a condition to the
exercise of the 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.
7. Term of Option. The Option shall terminate on the tenth anniversary
of the Date of Grant, unless terminated earlier in accordance with the
provisions of Section 8 or in the following circumstances:
(a) Termination. In the event of termination of Optionee's
employment with the Company, other than upon Optionee's death or total and
permanent disability (as defined by Section 22(e)(3) of the Code
("Disability")), Optionee may, but only within three (3) months following the
date of such termination, exercise the Option to the extent it is vested on the
date of such termination. To the extent that Option was not vested on the date
of such termination, or if Optionee does not exercise the Option to the extent
so vested within such three-month period, the Option shall terminate.
(b) Disability of Optionee. Notwithstanding the provisions hereof,
in the event of termination of Optionee's employment with the Company as a
result of his Disability,
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Optionee may, but only within twelve (12) months following the date of such
termination, exercise the Option to the extent otherwise so entitled on the date
of such termination. To the extent that Optionee was not entitled to exercise
the Option on the date of such termination, or if Optionee does not exercise the
Option to the extent so entitled within such 12-month period, the Option shall
terminate.
(c) Death of Optionee. Notwithstanding the provisions hereof, in
the event of termination of Optionee's employment with the Company as a result
of the death of Optionee, the Option may be exercised at any time within twelve
(12) months following the date of death, by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent Optionee could have exercised the Option at the date of death. To the
extent that Optionee was not entitled to exercise the Option on the date of
death, or if the Option is not exercised to the extent exercisable within such
12-month period, the Option shall terminate.
8. Changes in Capitalization or Change of Control.
(a) Changes in Capitalization. The number of Shares of common
stock covered by the Option, as well as the price per share of common stock
covered by the Option, 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
in a manner deemed equitable by the Company; provided, however, that 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 the Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company. Optionee shall have the right to
exercise the Option until fifteen (15) days prior to such transaction as to all
of the Shares covered thereby. To the extent it has not been previously
exercised, the Option will terminate immediately prior to the consummation of
such proposed action.
(c) Change of Control. In the event of a Change of Control, the
Option may be continued by the Company or may be assumed, or an equivalent
option may be substituted, and the Option terminated, by the successor
corporation or a parent or subsidiary of such successor corporation. Any portion
of the Option (including any portion which has become vested and exercisable
upon such Change of Control as a result of Section 2(b) hereof) that is not
continued or assumed by the Company or its successor, as applicable, shall be
exercisable for a period of time determined by the Board and to the extent not
exercised at the end of such period, shall terminate immediately on such Change
of Control. For the purposes hereof, "Change of Control" means:
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(i) The acquisition by any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities and Exchange
Act of 1934) of the "beneficial ownership" (as defined
in Rule 13d-3 under said Act), directly or indirectly,
of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by
the Company's then outstanding voting securities (it
being understood that securities owned by any person on
the date hereof shall not be counted against such limit
with respect to such person); or
(ii) change in the composition of the Board occurring within
a rolling two-year period, as a result of which fewer
than a majority of the directors are Incumbent
Directors. "Incumbent Directors" shall mean directors
who either (A) are members of the Board as of the date
hereof, or (B) are elected, or nominated for election,
to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such
election or nomination (but shall not include an
individual not otherwise an Incumbent Director whose
election or nomination is in connection with an actual
or threatened proxy contest relating to the election of
directors to the Board); or
(iii) A merger or consolidation of the Company with any other
entity other than a merger or consolidation which would
result in the voting securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity
(including the parent corporation of such surviving
entity)) at least fifty percent (50%) of the total
voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately
after such merger or consolidation, or a sale or
disposition by the Company of all or substantially all
of the Company's assets.
9. Lock-up Agreement. Optionee hereby agrees that if so requested by
the Company or any representative of the underwriters 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 following the
effective date of any registration statement of the Company filed 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
180-day period.
10. Non-Transferability of Option. The Option may not be transferred in
any manner other 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
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of Optionee.
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11. At-Will Employment. The Option does not confer on Optionee any right
to continue in the employ of the Company or any Subsidiary or interfere in any
way with the right of the Company or any Subsidiary to determine the terms of
Optionee's employment.
12. Tax Consequences.
(a) The Option is a nonstatutory stock option. Optionee
understands that he may incur federal and state income tax liability upon the
exercise of the Option and upon the subsequent disposition of the Shares.
Optionee represents that he has consulted with a tax advisor in connection with
the purchase or disposition of the shares and that he is not relying on the
Company for tax advice.
(b) By exercising the Option, Optionee agrees that, as a condition
to any exercise of the Option, the Company may require Optionee to enter into an
arrangement providing for the payment by Optionee to the Company of any tax
withholding obligation of the Company arising thereby. At any time Optionee
exercises the Option, in whole or in part, or at any time as requested by the
Company, Optionee hereby authorizes withholding from payroll and any other
amounts payable to Optionee, any sums required to satisfy the federal, state,
local and foreign tax withholding obligations of the Company, if any, which
arise in connection with the Option.
13. Delegation. Optionee acknowledges that any powers, rights or
responsibilities of the Board set forth herein may be delegated to and exercised
by any subcommittee thereof.
14. Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
15. Successors and Assigns. The Company may assign any of its rights
under this Option Agreement to single or multiple assignees, and this Option
Agreement shall inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth, this Option
Agreement shall be binding upon Optionee and his executors, administrators,
successors and assigns.
16. Entire Agreement. This Option Agreement contains the entire
understanding of the parties hereto in respect of the subject matter contained
herein. This Option Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.
17. Governing Law. This Option Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
application of the conflict of laws principles thereof.
18. Counterparts. This Option Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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Optionee hereby accepts the Option subject to all of the terms and
provisions of this Option Agreement. Optionee has reviewed this Option Agreement
in its entirety, has had an opportunity to obtain the advice of counsel prior to
executing the Option and fully understands all provisions of this Option
Agreement. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under this
Option Agreement. Optionee further agrees to notify the Company upon any change
in the residence address indicated below.
CALLIDUS SOFTWARE INC. OPTIONEE
a Delaware Corporation /s/ Reed Taussig
----------------------------------
Print Name: Reed D. Taussig
By: /s/ RON FIOR
------------------------------ Residence Address:
Name: Ron Fior 731 Linden Avenue
Title: VP Finance and CFO ----------------------------------
Los Altos, CA 94022
Address: ----------------------------------
160 West Santa Clara Avenue
San Jose, CA 95113
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