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EXHIBIT 99.1
FORM OF WRITTEN COMPENSATION AGREEMENT
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SELECTICA, INC. 1996 STOCK PLAN
NOTICE OF STOCK OPTION GRANT
You have been granted the following option to purchase Common Stock of
Selectica, Inc. (the "Company"):
Name of Optionee:
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Total Number of Shares Granted:
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Type of Option:
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Exercise Price Per Share: $
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Date of Xxxxx:
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Date Exercisable: This option may be exercised, in whole
or in part, for 100% of the Shares
subject to this option at any time
after the Date of Grant.
Vesting Commencement Date:
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Vesting Schedule: The Right of Repurchase shall lapse
with respect to the first 25% of the
Shares subject to this option upon the
Optionee's completion of 12 months of
Service from the Vesting Commencement
Date and 1/48 of the Shares upon
attainment of the _____ day of each
month thereafter.
Term/Expiration Date:
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By your signature and the signature of the Company's representative below, you
and the Company agree that this option is granted under and governed by the
terms and conditions of the 1996 Stock Plan and the Stock Option Agreement, both
of which are attached to and made a part of this document.
OPTIONEE: SELECTICA, INC.
By:
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Title:
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Print Name
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THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
SELECTICA, INC. 1996 STOCK PLAN:
STOCK OPTION AGREEMENT
SECTION 1. GRANT OF OPTION.
(a) OPTION. On the terms and conditions set forth in the Notice of
Stock Option Grant and this Agreement, the Company grants to the Optionee on the
Date of Grant the option to purchase at the Exercise Price the number of Shares
set forth in the Notice of Stock Option Grant. The Exercise Price is agreed to
be at least 100% of the Fair Market Value per Share on the Date of Grant (110%
of Fair Market Value if Section 3(b) of the Plan applies). This option is
intended to be an ISO or a Nonstatutory Option, as provided in the Notice of
Stock Option Grant.
(b) STOCK PLAN. This option is granted pursuant to the Plan, a
copy of which the Optionee acknowledges having received. The provisions of the
Plan are incorporated into this Agreement by this reference.
SECTION 2. RIGHT TO EXERCISE.
(a) EXERCISABILITY. Subject to Subsections (b) and (c) below and
the other conditions set forth in this Agreement, all or part of this option may
be exercised prior to its expiration at the time or times set forth in the
Notice of Stock Option Grant. Shares purchased by exercising this option may be
subject to the Right of Repurchase under Section 7.
(b) $100,000 LIMITATION. If this Option is designated as an ISO in
the Notice of Stock Option Grant, then the Optionee's right to exercise this
option shall be deferred to the extent (and only to the extent) that this option
otherwise would not be treated as an ISO by reason of the $100,000 annual
limitation under Section 422(d) of the Code, except that:
(i) The Optionee's right to exercise this option shall in
any event become exercisable at least as rapidly as 20% per year over the
five-year period commencing on the Date of Grant, unless the Optionee is
an officer of the Company, an Outside Director or a Consultant; and
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(ii) The Optionee's right to exercise this option shall no
longer be deferred in the event that (A) a Change in Control occurs, (B)
this option is not assumed by the surviving corporation or its parent and
(C) the surviving corporation or its parent does not substitute its own
option for this option.
(c) SHAREHOLDER APPROVAL. Any other provision of this Agreement
notwithstanding, no portion of this option shall be exercisable at any time
prior to the approval of the Plan by the Company's shareholders.
SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION.
Except as otherwise provided in this Agreement, this option and the
rights and privileges conferred hereby shall not be sold, pledged or otherwise
transferred (whether by operation of law or otherwise) and shall not be subject
to sale under execution, attachment, levy or similar process.
SECTION 4. EXERCISE PROCEDURES.
(a) NOTICE OF EXERCISE. The Optionee or the Optionee's
representative may exercise this option by giving written notice to the Company
pursuant to Section 13(c). The notice shall specify the election to exercise
this option, the number of Shares for which it is being exercised and the form
of payment. The notice shall be signed by the person exercising this option. In
the event that this option is being exercised by the representative of the
Optionee, the notice shall be accompanied by proof (satisfactory to the Company)
of the representative's right to exercise this option. The Optionee or the
Optionee's representative shall deliver to the Company, at the time of giving
the notice, payment in a form permissible under Section 5 for the full amount of
the Purchase Price.
(b) ISSUANCE OF SHARES. After receiving a proper notice of
exercise, the Company shall cause to be issued a certificate or certificates for
the Shares as to which this option has been exercised, registered in the name of
the person exercising this option (or in the names of such person and his or her
spouse as community property or as joint tenants with right of survivorship).
The Company shall cause such certificate or certificates to be deposited in
escrow or delivered to or upon the order of the person exercising this option.
(c) WITHHOLDING TAXES. In the event that the Company determines
that it is required to withhold any tax as a result of the exercise of this
option, the Optionee, as a condition to the exercise of this option, shall make
arrangements satisfactory to the Company to enable it to satisfy all withholding
requirements. The Optionee shall also make arrangements satisfactory to the
Company to enable it to satisfy any withholding requirements that may arise in
connection with the vesting or disposition of Shares purchased by exercising
this option.
SECTION 5. PAYMENT FOR STOCK.
(a) CASH. All or part of the Purchase Price may be paid in cash or
cash equivalents.
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(b) SURRENDER OF STOCK. All or part of the Purchase Price may be
paid by the surrender of Shares in good form for transfer. Such Shares must have
a fair market value (as determined by the Board of Directors) on the date of
exercise of this option which, together with any amount paid in another form
permissible under this Section 5, is equal to the Purchase Price. The Optionee
shall not surrender Shares in payment of the Exercise Price if such surrender
would cause the Company to recognize compensation expense with respect to the
option for financial reporting purposes.
(c) EXERCISE/SALE. If Stock is publicly traded, all or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company.
(d) EXERCISE/PLEDGE. If Stock is publicly traded, all or part of
the Purchase Price and any withholding taxes may be paid by the delivery (on a
form prescribed by the Company) of an irrevocable direction to pledge Shares to
a securities broker or lender approved by the Company, as security for a loan,
and to deliver all or part of the loan proceeds to the Company.
SECTION 6. TERM AND EXPIRATION.
(a) BASIC TERM. This option shall in any event expire on the
expiration date set forth in the Notice of Stock Option Grant, which date is 10
years after the Date of Grant (five years after the Date of Grant if this option
is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of
the Plan applies).
(b) TERMINATION OF SERVICE (EXCEPT BY DEATH). If the Optionee's
Service terminates for any reason other than death, then this option shall
expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection
(a) above;
(ii) The date three months after the termination of the
Optionee's Service for any reason other than Disability; or
(iii) The date six months after the termination of the
Optionee's Service by reason of Disability.
The Optionee may exercise all or part of this option at any time before its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable before the Optionee's Service terminated. When the
Optionee's Service terminates, this option shall expire immediately with respect
to the number of Shares for which this option is not yet exercisable and with
respect to any Restricted Shares. In the event that the Optionee dies after
termination of Service but before the expiration of this option, all or part of
this option may be exercised (prior to expiration) by the executors or
administrators of the Optionee's estate or by any person who has acquired this
option directly from the Optionee by beneficiary designation, bequest or
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inheritance, but only to the extent that this option had become exercisable
before the Optionee's Service terminated.
(c) DEATH OF THE OPTIONEE. If the Optionee dies while in Service,
then this option shall expire on the earlier of the following dates:
(i) The expiration date determined pursuant to Subsection
(a) above; or
(ii) The date 12 months after the Optionee's death.
All or part of this option may be exercised at any time before its expiration
under the preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired this option directly from
the Optionee by beneficiary designation, bequest or inheritance, but only to the
extent that this option had become exercisable before the Optionee's death. When
the Optionee dies, this option shall expire immediately with respect to the
number of Shares for which this option is not yet exercisable and with respect
to any Restricted Shares.
(d) LEAVES OF ABSENCE. For any purpose under this Agreement,
Service shall be deemed to continue while the Optionee is on a bona fide leave
of absence, if such leave was approved by the Company in writing and if
continued crediting of Service for such purpose is required by the terms of such
leave or by applicable law (as determined by the Company).
(e) NOTICE CONCERNING ISO TREATMENT. If this option is designated
as an ISO in the Notice of Stock Option Grant, it ceases to qualify for
favorable tax treatment as an ISO to the extent it is exercised (i) more than
three months after the date the Optionee ceases to be an Employee for any reason
other than death or permanent disability (as defined in Section 22(e)(3) of the
Code), (ii) more than 12 months after the date the Optionee ceases to be an
Employee by reason of such permanent disability or (iii) after the Optionee has
been on a leave of absence for more than 90 days, unless the Optionee's
reemployment rights are guaranteed by statute or by contract.
SECTION 7. RIGHT OF REPURCHASE.
(a) SCOPE OF REPURCHASE RIGHT. Except as otherwise provided in the
Notice of Stock Option Grant and Subsection (c) below, Shares acquired under
this Agreement initially shall be Restricted Shares and shall be subject to a
right (but not an obligation) of repurchase by the Company. The Optionee shall
not transfer, assign, encumber or otherwise dispose of any Restricted Shares.
(b) CONDITION PRECEDENT TO EXERCISE. The Right of Repurchase shall
be exercisable only during the 60-day period next following the later of:
(i) The date when the Optionee's Service terminates for any
reason, with or without cause, including (without limitation) death or
disability; or
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(ii) The date when this option was exercised by the Optionee,
the executors or administrators of the Optionee's estate or any person who
has acquired this option directly from the Optionee by bequest,
inheritance or beneficiary designation.
(c) LAPSE OF REPURCHASE RIGHT. The Right of Repurchase shall lapse
with respect to the Shares subject to this option in accordance with the vesting
schedule set forth in the Notice of Stock Option Grant. In addition, the Right
of Repurchase shall lapse and all of the remaining Restricted Shares shall
become vested if (i) the Company is subject to a Change in Control before the
Optionee's Service terminates and (ii) the Right of Repurchase is not assigned
to the entity that employs the Optionee immediately after the Change in Control
or to its parent or subsidiary.
(d) REPURCHASE COST. If the Company exercises the Right of
Repurchase, it shall pay the Optionee an amount equal to the Exercise Price for
each of the Restricted Shares being repurchased.
(e) EXERCISE OF REPURCHASE RIGHT. The Right of Repurchase shall be
exercisable only by written notice delivered to the Optionee prior to the
expiration of the 60-day period specified in Subsection (b) above. The notice
shall set forth the date on which the repurchase is to be effected. Such date
shall not be more than 30 days after the date of the notice. The certificate(s)
representing the Restricted Shares to be repurchased shall, prior to the close
of business on the date specified for the repurchase, be delivered to the
Company properly endorsed for transfer. The Company shall, concurrently with the
receipt of such certificate(s), pay to the Optionee the purchase price
determined according to Subsection (d) above. Payment shall be made in cash or
cash equivalents or by canceling indebtedness incurred in the purchase of the
Restricted Shares. The Right of Repurchase shall terminate with respect to any
Restricted Shares for which it has not been timely exercised pursuant to this
Subsection (e).
(f) ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event of
the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities or other property (including money
paid other than as an ordinary cash dividend) which are by reason of such
transaction distributed with respect to any Restricted Shares or into which such
Restricted Shares thereby become convertible shall immediately be subject to the
Right of Repurchase. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the number and/or class of the
Restricted Shares. Appropriate adjustments shall also, after each such
transaction, be made to the price per share to be paid upon the exercise of the
Right of Repurchase in order to reflect any change in the Company's outstanding
securities effected without receipt of consideration therefor; provided,
however, that the aggregate purchase price payable for the Restricted Shares
shall remain the same.
(g) TERMINATION OF RIGHTS AS SHAREHOLDER. If the Company makes
available, at the time and place and in the amount and form provided in this
Agreement, the
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consideration for the Restricted Shares to be repurchased in accordance with
this Section 7, then after such time the person from whom such Restricted Shares
are to be repurchased shall no longer have any rights as a holder of such
Restricted Shares (other than the right to receive payment of such consideration
in accordance with this Agreement). Such Restricted Shares shall be deemed to
have been repurchased in accordance with the applicable provisions hereof,
whether or not the certificate(s) therefor have been delivered as required by
this Agreement.
(h) ESCROW. Upon issuance, the certificates for Restricted Shares
issued under this option shall be deposited in escrow with the Company to be
held in accordance with the provisions of this Agreement. Any new, substituted
or additional securities or other property described in Subsection (f) above
shall immediately be delivered to the Company to be held in escrow, but only to
the extent the Shares are at the time Restricted Shares. All regular cash
dividends on the Shares (or other securities at the time held in escrow) shall
be paid directly to the Optionee or Transferee and shall not be held in escrow.
The Shares, together with any other assets or securities held in escrow
hereunder, shall be (i) surrendered to the Company for repurchase and
cancellation upon the Company's exercise of its Right of Repurchase or Right of
First Refusal or (ii) released to the Optionee or Transferee upon the Optionee's
request to the extent the Shares are no longer Restricted Shares (but not more
frequently than once every six months). In any event, all Shares which have
vested (and any other vested assets and securities attributable thereto) shall
be released within 60 days after the earlier to occur of (i) the Optionee's
cessation of Service or (ii) the lapse of the Right of First Refusal.
SECTION 8. RIGHT OF FIRST REFUSAL.
(a) RIGHT OF FIRST REFUSAL. In the event that the Optionee or a
Transferee proposes to sell, pledge or otherwise transfer to a third party any
Shares acquired under this Agreement, or any interest in such Shares, the
Company shall have the Right of First Refusal with respect to all (and not less
than all) of such Shares. If the Optionee or Transferee desires to transfer
Shares acquired under this Agreement, the Optionee or Transferee shall give a
written Transfer Notice to the Company describing fully the proposed transfer,
including the number of Shares proposed to be transferred, the proposed transfer
price, the name and address of the proposed new Transferee and proof
satisfactory to the Company that the proposed sale or transfer will not violate
any applicable federal or state securities laws. The Transfer Notice shall be
signed both by the Optionee or Transferee and by the proposed new Transferee and
must constitute a binding commitment of both parties to the transfer of the
Shares. The Company shall have the right to purchase all, and not less than all,
of the Shares on the terms of the proposal described in the Transfer Notice
(subject, however, to any change in such terms permitted under Subsection (b)
below) by delivery of a notice of exercise of the Right of First Refusal within
30 days after the date when the Transfer Notice was received by the Company. The
Company's rights under this Subsection (a) shall be freely assignable, in whole
or in part.
(b) TRANSFER OF SHARES. If the Company fails to exercise its Right
of First Refusal within 30 days after the date when it received the Transfer
Notice, the Optionee or Transferee may, not later than 90 days following receipt
of the Transfer Notice by the Company, conclude a transfer of the Shares subject
to the Transfer Notice on the terms and conditions
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described in the Transfer Notice, provided that any such sale is made in
compliance with applicable federal and state securities laws and not in
violation of any other contractual restrictions to which the Optionee is bound.
Any proposed transfer on terms and conditions different from those described in
the Transfer Notice, as well as any subsequent proposed transfer by the Optionee
or Transferee, shall again be subject to the Right of First Refusal and shall
require compliance with the procedure described in Subsection (a) above. If the
Company exercises its Right of First Refusal, the parties shall consummate the
sale of the Shares on the terms set forth in the Transfer Notice within 60 days
after the date when the Company received the Transfer Notice (or within such
longer period as may have been specified in the Transfer Notice); provided,
however, that in the event the Transfer Notice provided that payment for the
Shares was to be made in a form other than cash or cash equivalents paid at the
time of transfer, the Company shall have the option of paying for the Shares
with cash or cash equivalents equal to the present value of the consideration
described in the Transfer Notice.
(c) ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event of
the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities or other property (including money
paid other than as an ordinary cash dividend) which are by reason of such
transaction distributed with respect to any Shares subject to this Section 8 or
into which such Shares thereby become convertible shall immediately be subject
to this Section 8. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the number and/or class of the Shares
subject to this Section 8.
(d) TERMINATION OF RIGHT OF FIRST REFUSAL. Any other provision of
this Section 8 notwithstanding, in the event that the Stock is readily tradable
on an established securities market when the Optionee or Transferee desires to
transfer Shares, the Company shall have no Right of First Refusal, and the
Optionee or Transferee shall have no obligation to comply with the procedures
prescribed by Subsections (a) and (b) above.
(e) PERMITTED TRANSFERS. This Section 8 shall not apply to (i) a
transfer by beneficiary designation, will or intestate succession or (ii) a
transfer to the Optionee's spouse or children or to a trust established by the
Optionee for the benefit of the Optionee or the Optionee's spouse or children,
provided in either case that the Transferee agrees in writing on a form
prescribed by the Company to be bound by this Agreement.
(f) TERMINATION OF RIGHTS AS SHAREHOLDER. If the Company makes
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Shares to be purchased in accordance with
this Section 8, then after such time the person from whom such Shares are to be
purchased shall no longer have any rights as a holder of such Shares (other than
the right to receive payment of such consideration in accordance with this
Agreement). Such Shares shall be deemed to have been purchased in accordance
with the applicable provisions hereof, whether or not the certificate(s)
therefor have been delivered as required by this Agreement.
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SECTION 9. LEGALITY OF INITIAL ISSUANCE.
No Shares shall be issued upon the exercise of this option unless
and until the Company has determined that:
(a) It and the Optionee have taken any actions required to
register the Shares under the Securities Act or to perfect an exemption from the
registration requirements thereof;
(b) Any applicable listing requirement of any stock exchange on
which Stock is listed has been satisfied; and
(c) Any other applicable provision of state or federal law has
been satisfied.
SECTION 10. NO REGISTRATION RIGHTS.
The Company may, but shall not be obligated to, register or qualify
the sale of Shares under the Securities Act or any other applicable law. The
Company shall not be obligated to take any affirmative action in order to cause
the sale of Shares under this Agreement to comply with any law.
SECTION 11. RESTRICTIONS ON TRANSFER.
(a) MARKET STAND-OFF AND OTHER RESTRICTIONS. Regardless of whether
the offering and sale of Shares under the Plan have been registered under the
Securities Act or have been registered or qualified under the securities laws of
any state, the Company at its discretion may impose restrictions upon the sale,
pledge or other transfer of such Shares (including the placement of appropriate
legends on stock certificates or the imposition of stop-transfer instructions)
if, in the judgment of the Company and its counsel, such restrictions are
necessary or desirable in order to achieve compliance with the Securities Act,
the securities laws of any state or any other law or with requirements imposed
by an agreement between the Company and its underwriters. In no event, however,
shall restrictions imposed pursuant to such agreement remain in effect for more
than 180 days.
(b) INVESTMENT INTENT AT GRANT. The Optionee represents and agrees
that the Shares to be acquired upon exercising this option will be acquired for
investment, and not with a view to the sale or distribution thereof.
(c) INVESTMENT INTENT AT EXERCISE. In the event that the sale of
Shares under the Plan is not registered under the Securities Act but an
exemption is available which requires an investment representation or other
representation, the Optionee shall represent and agree at the time of exercise
that the Shares being acquired upon exercising this option are being acquired
for investment, and not with a view to the sale or distribution thereof, and
shall make such other representations as are deemed necessary or appropriate by
the Company and its counsel.
(d) LEGENDS. All certificates evidencing Shares purchased under
this Agreement shall bear the following legend:
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"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN
INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY
CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE
SHARES AND CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE
WITH THE COMPANY. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN
REQUEST XXXXXXX A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF
WITHOUT CHARGE."
All certificates evidencing Shares purchased under this Agreement in an
unregistered transaction shall bear the following legend (and such other
restrictive legends as are required or deemed advisable under the provisions of
any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY
AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
(e) REMOVAL OF LEGENDS. If, in the opinion of the Company and its
counsel, any legend placed on a stock certificate representing Shares sold under
this Agreement is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the same
number of Shares but without such legend.
(f) ADMINISTRATION. Any determination by the Company and its
counsel in connection with any of the matters set forth in this Section 11 shall
be conclusive and binding on the Optionee and all other persons.
SECTION 12. ADJUSTMENT OF SHARES.
In the event of any transaction described in Section 8 of the Plan,
the terms of this option (including, without limitation, the number and kind of
Shares subject to this option and the Exercise Price) shall be adjusted as set
forth in Section 8 of the Plan.
SECTION 13. MISCELLANEOUS PROVISIONS.
(a) RIGHTS AS A SHAREHOLDER. Neither the Optionee nor the
Optionee's representative shall have any rights as a shareholder with respect to
any Shares subject to this option until the Optionee or the Optionee's
representative becomes entitled to receive such Shares by filing a notice of
exercise and paying the Purchase Price pursuant to Sections 4 and 5.
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(b) NO RETENTION RIGHTS. Nothing in this option or in the Plan
shall confer upon the Optionee any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Company (or any Parent or Subsidiary employing or retaining the
Optionee) or of the Optionee, which rights are hereby expressly reserved by
each, to terminate his or her Service at any time and for any reason, with or
without cause.
(c) NOTICE. Any notice required by the terms of this Agreement
shall be given in writing and shall be deemed effective upon personal delivery
or upon deposit with the United States Postal Service, by registered or
certified mail, with postage and fees prepaid. Notice shall be addressed to the
Company at its principal executive office and to the Optionee at the address
that he or she most recently provided to the Company.
(d) ENTIRE AGREEMENT. The Notice of Stock Option Grant, this
Agreement and the Plan constitute the entire contract between the parties hereto
with regard to the subject matter hereof. They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.
(e) CHOICE OF LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, as such laws
are applied to contracts entered into and performed in such State.
SECTION 14. DEFINITIONS.
(a) "AGREEMENT" shall mean this Stock Option Agreement.
(b) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time or, if a Committee has been appointed,
such Committee.
(c) "CHANGE IN CONTROL" shall have the meaning given to such term
in the Plan.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "COMMITTEE" shall mean a committee of the Board of Directors,
as described in Section 2 of the Plan.
(f) "COMPANY" shall mean Selectica, Inc., a California
corporation.
(g) "CONSULTANT" shall mean an individual who performs bona fide
services for the Company, a Parent or a Subsidiary as a consultant or advisor,
excluding Employees and Outside Directors.
(h) "DATE OF GRANT" shall mean the date specified in the Notice of
Stock Option Grant, which date shall be the later of (i) the date on which the
Board of Directors resolved to grant this option or (ii) the first day of the
Optionee's Service.
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(i) "DISABILITY" shall mean that the Optionee is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment.
(j) "EMPLOYEE" shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.
(k) "EXERCISE PRICE" shall mean the amount for which one Share may
be purchased upon exercise of this option, as specified in the Notice of Stock
Option Grant.
(l) "FAIR MARKET VALUE" shall mean the fair market value of a
Share, as determined by the Board of Directors in good faith. Such determination
shall be conclusive and binding on all persons.
(m) "ISO" shall mean an employee incentive stock option described
in Section 422(b) of the Code.
(n) "NONSTATUTORY OPTION" shall mean a stock option not described
in Sections 422(b) or 423(b) of the Code.
(o) "NOTICE OF STOCK OPTION GRANT" shall mean the document so
entitled to which this Agreement is attached.
(p) "OPTIONEE" shall mean the individual named in the Notice of
Stock Option Grant.
(q) "OUTSIDE DIRECTOR" shall mean a member of the Board of
Directors who is not an Employee.
(r) "PARENT" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(s) "PLAN" shall mean the Selectica, Inc. 1996 Stock Plan, as in
effect on the Date of Grant.
(t) "PURCHASE PRICE" shall mean the Exercise Price multiplied by
the number of Shares with respect to which this option is being exercised.
(u) "RESTRICTED SHARE" shall mean a Share that is subject to the
Right of Repurchase.
(v) "RIGHT OF FIRST REFUSAL" shall mean the Company's right of
first refusal described in Section 8.
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(w) "RIGHT OF REPURCHASE" shall mean the Company's right of
repurchase described in Section 7.
(x) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
(y) "SERVICE" shall mean service as an Employee, Outside Director
or Consultant.
(z) "SHARE" shall mean one share of Stock, as adjusted in
accordance with Section 8 of the Plan (if applicable).
(aa) "STOCK" shall mean the Common Stock of the Company.
(bb) "SUBSIDIARY" shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(cc) "TRANSFEREE" shall mean any person to whom the Optionee has
directly or indirectly transferred any Share acquired under this Agreement.
(dd) "TRANSFER NOTICE" shall mean the notice of a proposed transfer
of Shares described in Section 8.
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