EXHIBIT 99.7
12 MONTHS ACCELERATION
KANA COMMUNICATIONS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
SILKNET SOFTWARE, INC.
EMPLOYEE STOCK OPTION PLAN
1999 STOCK OPTION AND STOCK INCENTIVE PLAN
1999 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
INSITE MARKETING TECHNOLOGY, INC. 1997 STOCK OPTION PLAN
OPTIONEE: (First Name) (Last Name),
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 6th day of February,
2000.
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Silknet Software,
Inc., a Delaware corporation ("Silknet"), which were granted to Optionee under
one or more of the following stock option plans (the "Plans"): the Silknet
Employee Stock Option Plan, 1999 Stock Option and Stock Incentive Plan, 1999
Non-Employee Director Stock Option Plan, or the Insite Marketing Technology,
Inc. 1997 Stock Option Plan, as previously assumed by Silknet.
WHEREAS, each of those options is evidenced by a Stock Option Agreement
(the "Option Agreement") issued to Optionee under the applicable Plan.
WHEREAS, Silknet has been acquired by Kana Communications, Inc., a Delaware
corporation ("Kana") through the merger of Silknet with and into Kana (the
"Merger") pursuant to the Agreement and Plan of Reorganization, by and between
Kana and Silknet, dated February 6, 2000 (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require the obligations of
Silknet under each outstanding option under the Plans to be assumed by Kana at
the consummation of the Merger and the holder of each outstanding option to be
issued an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the exchange
ratio (the "Exchange Ratio") in effect for the Merger is 1.66 of a share of Kana
common stock ("Kana Stock") for each outstanding share of Silknet common stock
("Silknet Stock").
WHEREAS, the purpose of this Agreement is to evidence the assumption by
Xxxx of the outstanding options held by Optionee at the time of the consummation
of the Merger (the "Effective Time") and to reflect certain adjustments to those
options which have become necessary in connection with their assumption by Xxxx
in the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Silknet Stock subject to the options held by
Optionee immediately prior to the Effective Time (the "Silknet Options") and the
exercise price payable per share are set forth below. Kana hereby assumes, as of
the Effective Time, all the duties and obligations of Silknet under each of the
Silknet Options. In connection with such assumption, the number of shares of
Kana Stock purchasable under each Silknet Option hereby assumed and the exercise
price payable thereunder have been adjusted to reflect the Exchange Ratio.
Accordingly, the number of shares of Kana Stock subject to each Silknet Option
hereby assumed shall be as specified for that option below, and the adjusted
exercise price payable per share of Kana Stock under the assumed Silknet Option
shall also be as indicated for that option below.
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SILKNET STOCK OPTIONS KANA ASSUMED OPTIONS
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# of Shares of # of Shares
Silknet Exercise Price of Xxxx Xxxxxxxx Exercise
Common Stock per Share Common Stock Price per Share
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Silknet Shares $Silknet Price (Kana Shares) $(Kana Price)
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2. The intent of the foregoing adjustments to each assumed Silknet Option
is to assure that the spread between the aggregate fair market value of the
shares of Kana Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this Agreement will not, immediately
after the consummation of the Merger, be greater than the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the Silknet Stock subject to the Silknet Option and the aggregate exercise price
in effect at such time under the Option Agreement. Such adjustments are also
intended to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the Silknet Option immediately prior to the Merger.
3. Each Silknet Option shall continue to have a maximum term of ten (10)
years from the date of grant, subject to earlier termination (as provided in the
applicable Option Agreement) following Optionee's cessation of service or
employment.
4. The following provisions shall govern each Silknet Option hereby assumed
by Xxxx:
(a) Unless the context otherwise requires, all references in each
Option Agreement and the applicable Plan (to the extent incorporated into
such Option Agreement) shall be adjusted as follows: (i) all references to
the "Company" shall mean Kana, (ii) all references to "Stock," "Common
Stock" or "Shares" shall mean shares of Kana Stock, (iii) all references to
the "Board" shall
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mean the Board of Directors of Kana and (iv) all references to the
"Committee" shall mean the Compensation Committee of the Kana Board of
Directors.
(b) Except as modified by this Agreement, the grant date and the
expiration date of each assumed Silknet Option and all other provisions
which govern either the exercise or the termination of the assumed Silknet
Option shall remain the same as set forth in the Option Agreement
applicable to that option, and the provisions of the applicable Plan and
the Option Agreement shall accordingly govern and control Optionee's rights
under this Agreement to purchase Kana Stock under the assumed Silknet
Option.
(c) Each Silknet Option assumed by Kana which were originally
designated as Incentive Stock Options shall remain Incentive Stock Options
to the maximum extent allowed by law.
(d) Each Silknet Option hereby assumed by Kana shall continue to vest
and become exercisable in accordance with the same installment vesting
schedule in effect for that option under the applicable Option Agreement
immediately prior to the Effective Time, except that: (i) Optionee shall,
for purposes of such vesting schedule, be immediately credited with an
additional twelve (12) months of service as of the Effective Time so that
the vesting of each installment under the assumed Silknet Option shall be
accelerated by twelve (12) months and (ii) the number of shares subject to
each such installment shall be adjusted to reflect the Exchange Ratio.
(e) For purposes of applying any and all provisions of the Option
Agreement and the applicable Plan relating to Optionee's status as an
employee or a consultant of Silknet, Optionee shall be deemed to continue
in such status as an employee or a consultant for so long as Optionee
renders services as an employee or a consultant to Kana or any present or
future majority-owned Kana subsidiary. Accordingly, the provisions of the
Option Agreement governing the termination of the assumed Silknet Options
upon Optionee's cessation of service as an employee or a consultant of
Silknet shall hereafter be applied on the basis of Optionee's cessation of
employee or consultant status with Kana and its subsidiaries, and each
assumed Silknet Option shall accordingly terminate, within the designated
time period in effect under the Option Agreement for that option, following
such cessation of employee or consultant status.
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(f) The adjusted exercise price payable for the Kana Stock subject to
each assumed Silknet Option shall be payable in any of the forms authorized
under the Option Agreement applicable to that option. For purposes of
determining the holding period of any shares of Kana Stock delivered in
payment of such adjusted exercise price, the period for which such shares
were held as Silknet Stock prior to the Merger shall be taken into account.
(g) In order to exercise each assumed Silknet Option, Optionee must
deliver to Kana a written notice of exercise in which the number of shares
of Kana Stock to be purchased thereunder must be indicated. The exercise
notice must be accompanied by payment of the adjusted exercise price
payable for the purchased shares of Kana Stock and should be delivered to
Kana at the following address:
Kana Communications, Inc.
000 Xxx Xxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxxxxxx Xxx
5. Except to the extent specifically modified by this Option Assumption
Agreement, all of the terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this Stock
Option Assumption Agreement.
IN WITNESS WHEREOF, Kana Communications, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 6th day of February, 2000.
KANA COMMUNICATIONS, INC.
By:
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Xxxxx Xxxxx, VP, General Counsel
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Silknet Options hereby assumed by Kana are as set
forth in the Option Agreement, the applicable Plans and such Stock Option
Assumption Agreement.
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(FIRST NAME) (LAST NAME), OPTIONEE
DATED: __________________, 2000
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