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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 26,
2006 CHORDIANT SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)
Delaware |
93-1051328 |
(State or other jurisdiction of incorporation) |
(I.R.S. Employer Identification No.) |
000-29357
20400 Stevens Creek Boulevard, Suite 400
Cupertino, CA 95014
Registrant's telephone number, including area code: (408) 517-6100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into Material Definitive Agreement
Approval of Executive Bonus Plan
On January 26, 2006, the Board of Directors of Chordiant Software, Inc.
("Chordiant" or the "Company") approved a (i) 2006 Executive Bonus Plan and (ii)
a Special Profitability Bonus for the President, Worldwide Field Operations.
The Executive Bonus Plan covers the following executives: (President and Chief
Executive Officer, President Worldwide Field Operations, Chief Operating
Officer/Chief Financial Officer, Vice President Worldwide Engineering, Vice
President Vision and Architecture, Vice President Human Resources, Vice
President and Corporate Controller, Vice President Financial Planning and
Analysis, Vice President Management Information Systems). Bonuses under this
plan will be calculated and paid (if applicable) quarterly based on corporate
results as compared against three measures: contract value (bookings) (40%
weighting), expense management (40% weighting) and revenue (20% weighting).
Total bonuses paid in the fiscal year under the plan shall not exceed 200% of
the bonus opportunity for any one individual. Payment and earnings in any one
quarter will be limited to a maximum of 100% of the participant's targeted bonus
for that quarter. At the end of the fiscal year, the Company will calculate
performance in total for the plan year and evaluate attainment against full plan
year goals. Performance in excess of 100% of the total plan year goal will be
paid not later than 60 days after fiscal year end according to the acceleration
schedule for each measure.
The final decision to pay a bonus will remain the decision of the Board of
Directors ("Board") or the Compensation Committee ("Committee") if so delegated
by the Board. The Board may in its own discretion, determine to pay or not pay a
bonus based upon the factors listed above or other Company performance criteria
it deems appropriate. The factors listed above are guidelines to assist the
Board, or the Committee, as the case may be, in its judgment but the final
decision to pay or not pay is in the discretion the Board. In its discretion,
the Committee may recommend, and the Board has the authority to approve, a
payment of up to 50% of an executive's bonus opportunity to an individual(s)
without regard to the performance criteria set forth in this plan.
No bonus is earned until it is paid under this plan. Therefore, in the event the
employment of an executive eligible under this plan is terminated (either by the
Company or by the eligible executive, whether voluntarily or involuntarily)
before a bonus is paid, then the executive will not be deemed to have earned
that bonus, and will not be entitled to any portion of that bonus.
Special Profitability Bonus for President, Worldwide Field Operations
During FY 2006, Chordiant is dedicated toward achieving profitability. The
ability of the Company to complete license transactions that enhance
profitability is essential to the continued success of the Company. In line with
this objective, the President, Worldwide Field Operations will have the ability
to earn up to an additional $37,500 per quarter for those quarters in which the
Company achieves a pro-forma operating income profit after inclusion of this
profitability bonus as stated in the paragraph below. The term "pro-forma
operating income" refers to the pro forma financial statements made available
each quarter by the Company to its investors.
The President, Worldwide Field Sales Operations is eligible to receive 25% of
the quarter's first $150,000 of "pro-forma operating income" (after inclusion of
this profitability bonus). The maximum payment in any one quarter under this
plan will be $37,500 and the maximum payment in the fiscal year will be
$150,000.
The final decision to pay a bonus will remain the decision of the Board of
Directors or the Compensation Committee if so delegated by the Board. The Board
may in its own discretion, determine to pay or not pay a bonus based upon the
factors listed or other Company performance criteria it deems appropriate. The
factors listed above are guidelines to assist the Board, or the Compensation
Committee, as the case may be, in its judgment but the final decision to pay or
not pay is in the discretion the Board. In its discretion, the Committee may
recommend, and the Board has the authority to approve, a payment of up to 50% of
the bonus opportunity of the President, Worldwide Field Sales Operations without
regard to the performance criteria set forth in this plan.
Bonuses are generally calculated within thirty (30) days after the end of any
given quarter and are generally paid within forty-five (45) days after the end
of any given quarter, but not later than sixty (60) days following the end of
such quarter. Bonuses are then paid in the next regularly-scheduled paycheck.
No bonus is earned until it is paid under this plan. Therefore, in the event
that the employment of the President, Worldwide Field Sales Operations is
terminated (either by the Company or by the President, Worldwide Field Sales
Operations , whether voluntarily or involuntarily) before a bonus is paid, then
the President, Worldwide Field Sales Operations will not have earned that bonus,
and will not be entitled to any portion of that bonus.
CEO Offer Letter
On January 28, 2006, the Company extended an offer to Steven R. Springsteel,
which he accepted, to become the President and Chief Executive Officer of the
Company effective February 1, 2006. The offer was recommended by the
Compensation Committee and approved by the Board of Directors. The Company and
Mr. Springsteel executed an offer letter dated January 31, 2006 which provides
that Mr. Springsteel will be paid an annual base salary of $495,000. He will be
eligible for bonuses under Chordiant's 2006 Executive Bonus Plan for the 2006
fiscal year. His target bonus for the 2006 fiscal year is 80% of his base salary
on a pro-rated basis. Mr. Springsteel's target bonus for the Company's second
fiscal quarter will be pro-rated. Mr. Springsteel will receive a grant of an
option to purchase one million shares of the Company's common stock (the
"Option") on February 1, 2006. The Option will be subject to a four year vesting
schedule (1/48th per month).
Mr. Springsteel is eligible for all standard Company benefits, including four
weeks' paid vacation and medical and dental coverage, and a term life insurance
policy in the amount of $1,000,000 (with premiums paid by the Company.) For
purposes of Company benefits, he is given service credit for his prior tenure
with the Company.
In the event of the consummation of a Change in Control (as defined in the offer
letter), the Company will accelerate the vesting of any equity compensation that
he has been granted as of the effective date of the Change in Control such that
the equity compensation shall be fully vested for an additional twelve (12)
month period as of the effective date of the Change in Control. Notwithstanding
the foregoing, the Option will vest 100% as of the effective date of the Change
in Control.
Either Mr. Springsteel or the Company may terminate his employment relationship
at any time with or without Cause (as defined in the offer letter) on advance
notice. If the Company terminates his employment without Cause at any time, or
he resigns his employment for Good Reason (as defined in the offer letter) at
any time, then: (i) the Company will make severance payments to Mr. Springsteel
in the form of monthly payments in the amount of one hundred thousand dollars
($100,000) per month for ten (10) months following the termination date, and
(ii) the vesting of any equity compensation that he has been granted through the
last day of his employment will automatically accelerate such that the shares
subject to each grant that would have vested had he remained employed for one
year beyond the termination date will be fully vested for such additional one
year period as of the termination date. Such acceleration shall be in addition
to any accelerated vesting he previously received upon the consummation of a
Change of Control (if any). If he resigns without Good Reason or his employment
is terminated for Cause, all compensation and benefits will cease immediately,
and he will receive no further compensation or benefits from the Company. The
Company agreed to directly pay Mr. Springsteel's legal fees associated with
entering into the offer letter, up to $15,000, upon receiving invoices for such
services.
In the event that the payments and benefits provided for in the offer letter
(such payments and benefits hereinafter referred to as "Payments") constitute
"parachute payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), would be subject to the excise tax
imposed by Section 4999 of the Code (the "Excise Tax"), the Company is obligated
to pay such Excise Tax provided that the maximum amount of the Excise Tax Gross
- - Up Payment which the Company shall be obligated to pay shall be $1,500,000.
Mr. Springsteel has been a director of Chordiant since January 2004. From
November 1996 to October 2000, Mr. Springsteel served as the executive vice
president and chief financial officer of Chordiant.
A copy of the offer letter dated January 31, 2006 between Mr. Springsteel and
the Company is filed herewith as Exhibit 10.1. A copy of the form of Mr.
Springsteel's option agreement is filed herewith as Exhibit 10.2.
Separation terms relating to Mr. Stephen Kelly
The terms of Mr. Stephen Kelly's separation with the Company (which will be reflected in a written agreement) are:
1. Mr. Kelly will continue as an employee of the Company under the current terms of his employment arrangement ( the "Terms of Employment"), but not as an officer of the Company, for a period of ninety (90) days to ensure a smooth transition (the "Date of Termination").
2. Mr. Kelly will remain on the Board of Directors until the date of the Company's 2006 Annual Shareholders' Meeting unless there is a need for his resignation earlier due to the independence requirements of the Securities and Exchange Commission or The Nasdaq Stock Market.
3. Mr. Kelly will tender his written resignation on the Date of Termination effective the earlier of the date of the next Company's 2006 Annual Shareholders' Meeting or the date necessary for the Board to meet the independence requirements of the Securities and Exchange Commission or The Nasdaq Stock Market.
4. The Company will pay Mr. Kelly severance payments equal to Mr. Kelly's base salary of $400,000 for twelve months following the Date of Termination, subject to the standard payroll deductions and withholdings.
5. Mr. Kelly will sign a release in a form acceptable to the Company on the Date of Termination (the "Release Execution Date").
6. Mr. Kelly will be entitled to his bonus for the first two quarters of fiscal 2006, if earned, under the 2006 Executive Bonus Plan at the bonus range of 80% of his salary.
7. Mr. Kelly will be entitled to up to $5,000 for outplacement services upon receipt of the proper documentation of such services.
8. Mr. Kelly will be entitled to reimbursement for up to $2,000 in legal services for the review of the terms of his severance upon receipt of invoices for such services.
9. Mr. Kelly will vest 100% in the 125,000 share restricted stock grant provided that Mr. Kelly continues his employment through April 1, 2006.
10. Mr. Kelly will have one year from the time he resigns from the Board of Directors to exercise any outstanding and vested options.
11. Pursuant to Mr. Kelly's Terms of Employment, the Company will accelerate the vesting of 50% of the unvested options held by Mr. Kelly as of the Date of Termination which will be 20,139.
Other Compensation Actions
On February 1, 2006, the Board of Directors approved (i) base salary levels and
bonus levels for George de Urioste, Chief Operating Officer and Chief Financial
Officer, Robert Mullen, President, Worldwide Field Operations, and James St.
Jean, Vice President, Worldwide Engineering, (ii) the payment of a spot bonus
for the 2005 performance of George de Urioste, Chief Operating Officer and Chief
Financial Officer (iii) a policy relating to certain non-cash benefits for certain identified
officers as set forth below, (iv) granting options to purchase common stock of
the Company to George de Urioste, Chief Operating Officer and Chief Financial
Officer, and James St. Jean, Vice President, Worldwide Engineering, in the
amounts set forth opposite their names below and (v) a restricted stock grant to
Samuel Spadafora, the Chairman of the Board, in the amount set forth opposite
his name below.
Officer | 2006 Fiscal Year Salary | 2006 Fiscal Year Bonus Opportunity | Spot Bonus | Option Grants or Restricted Stock Grant |
George de Urioste | $350,000 | 60% of Salary | $125,000 | Option for 200,000 shares of the Company's Common Stock vesting 1/48th monthly over 4 years |
James St. Jean | $240,000 | 60% of Salary | N/A | Option for 50,000 shares of the Company's Common Stock vesting 1/48th monthly over 4 years |
Samuel Spadafora | No change | No change | N/A | 125,000 restricted shares 20,000 shares vesting April 1, 2006, July 1, 2006, October 1, 2006, January 1, 2007, April 1, 2007 and 25,000 shares vesting October 1, 2007 |
Non-Cash Benefits
Chordiant provides certain benefits to its officers to enhance the continuity
and retention of its management team. These benefits are:
1. Executive physical at the Palo Alto Medical Clinic (west coast) or Massachusetts General Hospital (east coast). Benefit is to be as prescribed by the attending physician and limited to $2000 annually per person.
2. Tax advice and/or financial planning assistance to $1000 per person per year.
3. A life insurance policy payable in the amount of $1,000,000 to the executive's designated beneficiary with the premium paid by Chordiant.
Participating Executives are the Chairman of the Board, President and Chief Executive Officer, the Chief Operating Officer and Chief Financial Officer, the President, Worldwide Field Operations, Vice President Worldwide Engineering, and Vice President and General Counsel.
Item 5.03 Amendment of By-laws.
On February 1, 2006, the Board of Directors of Chordiant Software, Inc. amended
the Company's Bylaws to authorize the Chief Executive Officer to appoint
employees as Vice Presidents without the consent of the Board of Directors or
any Committee of the Board of Directors provided that such Vice Presidents do
not report directly to the CEO and provided further that such Vice Presidents
are not required to file reports under Section 16 of the Securities and Exchange
Act of 1934.
Prior to the amendment, only the Board of Directors could appoint Vice
Presidents.
A copy of the Amended and Restated Bylaws is filed herewith as Exhibit 3.2 and
incorporated herein by reference.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
(b) Effective February 1, 2006, Stephen Kelly resigned as the Company's Chief
Executive Officer. Subsequent to his resignation, Mr. Kelly will continue to be
employed by the Company for a period of ninety (90) days to ensure a smooth
transition. The Board of Directors made it a requirement that the Company's
Chief Executive Officer be located at the Company's Corporate Headquarters in
Cupertino, California and Mr. Kelly decided to continue to work and reside in
Europe. Pursuant to the terms of separation set forth in Item 1.01 above, which
terms are incorporated herein by reference, Mr. Kelly will remain on the Board
of Directors of the Company until the earlier of the Company's 2006 Annual
Shareholders' Meeting or such time as it becomes necessary for purposes of the
independence requirements under the rules and regulations of the Securities and
Exchange Commission and The Nasdaq Stock Market.
(c) Effective February 1, 2006, Steven R. Springsteel was appointed the
President and Chief Executive Officer of Chordiant, pursuant to the terms of an
offer letter described in Item 1.01 above which are incorporated herein by this
reference. Mr. Springsteel, age 48, has been a director of Chordiant since
January 2004. Since January 2003 through September 30, 2005, he has served as
senior vice president of finance and administration and chief financial officer
of Verity, Inc., a publicly traded provider of intellectual capital management
software, and from September 2005 through December 2005, its president and chief
financial officer, at which point Verity was sold. From November 2001 to January
2003, Mr. Springsteel served as the chief operating officer and chief financial
officer of Sagent Technology, Inc., a publicly traded business intelligence
software company, whose assets were acquired by Group 1 Software, Inc. in 2003.
From October 2000 to November 2001, Mr. Springsteel served as the chief
operating officer and chief financial officer of NOCpulse, a software company
(subsequently sold to Red Hat). From November 1996 to October 2000, Mr.
Springsteel served as the executive vice president and chief financial officer
of Chordiant. Mr. Springsteel holds a BA in Business Administration from
Cleveland State University.
Mr. Springsteel will continue to serve as a member of the Board of Directors. He
resigned from the Audit Committee on January 28, 2006.
Committee Appointments
On January 28, 2006, the Board of Directors made the following appointments: (a)
appointed David Weymouth, the Chairman of the Audit Committee and appointed
William Raduchel to the Audit Committee and designated Mr. Raduchel the
financial expert. David Springett remains a member of the Audit Committee.
Item 9.01 Financial Statements and Exhibits.
Exhibits
3.2 Form of Bylaws of the Company
10.1 Offer Letter dated January 31, 2006 between Steven R. Springsteel and
Chordiant Software, Inc.
10.2 Form of Option Agreement
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Chordiant Software, Inc.
Date: February 1, 2006 |
By: /s/ George de Urioste George de Urioste Chief Operating Officer and Chief Financial Officer |
EXHIBIT 3.2
Form of Bylaws
AMENDED AND RESTATED BYLAWS
OF
CHORDIANT SOFTWARE, INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the corporation in the
State of Delaware shall be in the City of Wilmington, County of New Castle.
Section 2. Other Offices. The corporation shall also have and maintain an office
or principal place of business at such place as may be fixed by the Board of
Directors, and may also have offices at such other places, both within and
without the State of Delaware as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The Board of Directors may adopt a corporate seal.
The corporate seal shall consist of a die bearing the name of the corporation
and the inscription, "Corporate Seal-Delaware." Said seal may be used by causing
it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place Of Meetings. Meetings of the stockholders of the
corporation may be held at such place, either within or without the State of
Delaware, as may be determined from time to time by the Board of Directors. The
Board of Directors may, in its sole discretion, determine that the meeting shall
not be held at any place, but may instead be held solely by means of remote
communication as provided under the Delaware General Corporation Law ("DGCL").
Section 5. Annual Meetings.
(a) The annual meeting of the stockholders of the corporation, for the
purpose of election of directors and for such other business as may lawfully
come before it, shall be held on such date and at such time as may be designated
from time to time by the Board of Directors. Nominations of persons for election
to the Board of Directors of the corporation and the proposal of business to be
considered by the stockholders may be made at an annual meeting of stockholders:
(i) pursuant to the corporation's notice of meeting of stockholders; (ii) by or
at the direction of the Board of Directors; or (iii) by any stockholder of the
corporation who was a stockholder of record at the time of giving the
stockholder's notice provided for in the following paragraph, who is entitled to
vote at the meeting and who complied with the notice procedures set forth in
Section 5.
(b) At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. For
nominations or other business to be properly brought before an annual meeting by
a stockholder pursuant to clause (iii) of Section 5(a) of these Bylaws, (i) the
stockholder must have given timely notice thereof in writing to the Secretary of
the corporation, (ii) such other business must be a proper matter for
stockholder action under DGCL, (iii) if the stockholder, or the beneficial owner
on whose behalf any such proposal or nomination is made, has provided the
corporation with a Solicitation Notice (as defined in clause (iii) of the last
sentence of this Section 5(b)), such stockholder or beneficial owner must, in
the case of a proposal, have delivered a proxy statement and form of proxy to
holders of at least the percentage of the corporation's voting shares required
under applicable law to carry any such proposal, or, in the case of a nomination
or nominations, have delivered a proxy statement and form of proxy to holders of
a percentage of the corporation's voting shares reasonably believed by such
stockholder or beneficial owner to be sufficient to elect the nominee or
nominees proposed to be nominated by such stockholder, and must, in either case,
have included in such materials the Solicitation Notice, and (iv) if no
Solicitation Notice relating thereto has been timely provided pursuant to this
section, the stockholder or beneficial owner proposing such business or
nomination must not have solicited a number of proxies sufficient to have
required the delivery of such a Solicitation Notice under this Section 5. To be
timely, a stockholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the one hundred twentieth (120th) day nor earlier than the close of
business on the one hundred eightieth (180th) day prior to the first anniversary
of the preceding year's annual meeting; provided, however, that in the event
that the date of the annual meeting is advanced more than thirty (30) days prior
to or delayed by more than thirty (30) days after the anniversary of the
preceding year's annual meeting, notice by the stockholder to be timely must be
so delivered not earlier than the close of business on the one hundred eightieth
(180th) day prior to such annual meeting and not later than the close of
business on the later of the one hundred twentieth (120th) day prior to such
annual meeting or the tenth (10th) day following the day on which public
announcement of the date of such meeting is first made. In no event shall the
public announcement of an adjournment of an annual meeting commence a new time
period for the giving of a stockholder's notice as described above. Such
stockholder's notice shall set forth: (A) as to each person whom the stockholder
proposed to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors in an election contest, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "1934 Act") and Rule 14a-4(d) thereunder (including
such person's written consent to being named in the proxy statement as a nominee
and to serving as a director if elected); (B) as to any other business that the
stockholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (C) as to the stockholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination or proposal is made (i) the name and
address of such stockholder, as they appear on the corporation's books, and of
such beneficial owner, (ii) the class and number of shares of the corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner, and (iii) whether either such stockholder or beneficial owner
intends to deliver a proxy statement and form of proxy to holders of, in the
case of the proposal, at least the percentage of the corporation's voting shares
required under applicable law to carry the proposal or, in the case of a
nomination or nominations, a sufficient number of holders of the corporation's
voting shares to elect such nominee or nominees (an affirmative statement of
such intent, a "Solicitation Notice").
(c) Notwithstanding anything in the third sentence of Section 5(b) of these
Bylaws to the contrary, in the event that the number of directors to be elected
to the Board of Directors of the Corporation is increased and there is no public
announcement naming all of the nominees for director or specifying the size of
the increased Board of Directors made by the corporation at least one hundred
(100) days prior to the first anniversary of the preceding year's annual
meeting, a stockholder's notice required by this Section 5 shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the corporation not later than the close of
business on the tenth (10th) day following the day on which such public
announcement is first made by the corporation.
(d) Except as set forth in Section 18 of these Bylaws, only such persons who are
nominated in accordance with the procedures set forth in this Section 5 shall be
eligible to serve as directors and only such business shall be conducted at a
meeting of stockholders as shall have been brought before the meeting in
accordance with the procedures set forth in this Section 5. Except as otherwise
provided by law, the Chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought before the
meeting was made, or proposed, as the case may be, in accordance with the
procedures set forth in these Bylaws and, if any proposed nomination or business
is not in compliance with these Bylaws, to declare that such defective proposal
or nomination shall not be presented for stockholder action at the meeting and
shall be disregarded.
(e) Notwithstanding the foregoing provisions of this Section 5, to include
information with respect to a stockholder proposal in the proxy statement and
form of proxy for a stockholders' meeting, stockholders must provide notice as
required by the regulations promulgated under the 1934 Act. Nothing in these
Bylaws shall be deemed to affect any rights of stockholders to request inclusion
of proposals in the corporation proxy statement pursuant to Rule 14a-8 under the
1934 Act.
(f) For purposes of this Section 5, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the 1934 Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the corporation may be called, for
any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the
Chief Executive Officer, or (iii) the Board of Directors pursuant to a
resolution adopted by a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships
at the time any such resolution is presented to the Board of Directors for
adoption).
(b) If a special meeting is properly called by any person or persons other than
the Chairman of the Board of Directors, the Chief Executive Officer, or the
Board of Directors pursuant to a resolution adopted by a majority of the total
number of authorized directors, the request shall be in writing, specifying the
general nature of the business proposed to be transacted, and shall be delivered
personally or sent by certified or registered mail, return receipt requested, to
the Secretary of the corporation. No business may be transacted at such special
meeting otherwise than specified in such notice. The Board of Directors shall
determine the time and place of such special meeting, which shall be held not
less than thirty-five (35) nor more than one hundred twenty (120) days after the
date of the receipt of the request. Upon determination of the time and place of
the meeting, the officer receiving the request shall cause notice to be given to
the stockholders entitled to vote, in accordance with the provisions of Section
7 of these Bylaws. Nothing contained in this paragraph (b) shall be construed as
limiting, fixing, or affecting the time when a meeting of stockholders called by
action of the Board of Directors may be held.
(c) Nominations of persons for election to the Board of Directors may be made at
a special meeting of stockholders at which directors are to be elected pursuant
to the corporation's notice of meeting (i) by or at the direction of the Board
of Directors or (ii) by any stockholder of the corporation who is a stockholder
of record at the time of giving notice provided for in these Bylaws who shall be
entitled to vote at the meeting and who complies with the notice procedures set
forth in this Section 6(c). In the event the corporation calls a special meeting
of stockholders for the purpose of electing one or more directors to the Board
of Directors, any such stockholder may nominate a person or persons (as the case
may be), for election to such position(s) as specified in the corporation's
notice of meeting, if the stockholder's notice required by Section 5(b) of these
Bylaws shall be delivered to the Secretary at the principal executive offices of
the corporation not earlier than the close of business on the one hundred
twentieth (120th) day prior to such special meeting and not later than the close
of business on the later of the ninetieth (90th) day prior to such meeting or
the tenth (10th) day following the day on which public announcement is first
made of the date of the special meeting and of the nominees proposed by the
Board of Directors to be elected at such meeting. In no event shall the public
announcement of an adjournment of a special meeting commence a new time period
for the giving of a stockholder's notice as described above.
Section 7. Notice Of Meetings. Except as otherwise provided by law,
notice, given in writing or by electronic transmission, of each meeting of
stockholders shall be given not less than ten (10) nor more than sixty (60) days
before the date of the meeting to each stockholder entitled to vote at such
meeting, such notice to specify the place, if any, date and hour, in the case of
special meetings, the purpose or purposes of the meeting, and the means of
remote communications, if any, by which stockholders and proxy holders may be
deemed to be present in person and vote at any such meeting. If mailed, notice
is given when deposited in the United States mail, postage prepaid, directed to
the stockholder at such stockholder's address as it appears on the records of
the corporation. Notice of the time, place, if any, and purpose of any meeting
of stockholders may be waived in writing, signed by the person entitled to
notice thereof, or by electronic transmission by such person, either before or
after such meeting, and will be waived by any stockholder by his attendance
thereat in person, by remote communication, if applicable, or by proxy, except
when the stockholder attends a meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Any stockholder so waiving notice of
such meeting shall be bound by the proceedings of any such meeting in all
respects as if due notice thereof had been given.
Section 8. Quorum. At all meetings of stockholders, except where
otherwise provided by statute or by the Certificate of Incorporation, or by
these Bylaws, the presence, in person, by remote communication, if applicable,
or by proxy duly authorized, of the holders of a majority of the outstanding
shares of stock entitled to vote shall constitute a quorum for the transaction
of business. In the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting or by vote
of the holders of a majority of the shares represented thereat, but no other
business shall be transacted at such meeting. The stockholders present at a duly
called or convened meeting, at which a quorum is present, may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. Except as otherwise provided by
statute or by applicable stock exchange or Nasdaq rules, or by the Certificate
of Incorporation or these Bylaws, in all matters other than the election of
directors, the affirmative vote of the majority of shares present in person, by
remote communication, if applicable, or represented by proxy at the meeting and
entitled to vote generally on the subject matter shall be the act of the
stockholders. Except as otherwise provided by statute, the Certificate of
Incorporation or these Bylaws, directors shall be elected by a plurality of the
votes of the shares present in person, by remote communication, if applicable,
or represented by proxy at the meeting and entitled to vote generally on the
election of directors. Where a separate vote by a class or classes or series is
required, except where otherwise provided by the statute or by the Certificate
of Incorporation or these Bylaws, a majority of the outstanding shares of such
class or classes or series, present in person, by remote communication, if
applicable, or represented by proxy duly authorized, shall constitute a quorum
entitled to take action with respect to that vote on that matter. Except where
otherwise provided by statute or by the Certificate of Incorporation or these
Bylaws, the affirmative vote of the majority (plurality, in the case of the
election of directors) of shares of such class or classes or series present in
person, by remote communication, if applicable, or represented by proxy at the
meeting shall be the act of such class or classes or series.
Section 9. Adjournment And Notice Of Adjourned Meetings. Any meeting of
stockholders, whether annual or special, may be adjourned from time to time
either by the chairman of the meeting or by the vote of a majority of the shares
present in person, by remote communication, if applicable, or represented by
proxy at the meeting. When a meeting is adjourned to another time or place, if
any, notice need not be given of the adjourned meeting if the time and place, if
any, thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting, the corporation may transact any business which might
have been transacted at the original meeting. If the adjournment is for more
than thirty (30) days or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 10. Voting Rights. For the purpose of determining those
stockholders entitled to vote at any meeting of the stockholders, except as
otherwise provided by law, only persons in whose names shares stand on the stock
records of the corporation on the record date, as provided in Section 12 of
these Bylaws, shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote shall have the right to do so either in person, by
remote communication, if applicable, or by an agent or agents authorized by a
proxy granted in accordance with Delaware law. An agent so appointed need not be
a stockholder. No proxy shall be voted after three (3) years from its date of
creation unless the proxy provides for a longer period.
Section 11. Joint Owners Of Stock. If shares or other securities having
voting power stand of record in the names of two (2) or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by the entirety, or otherwise, or if two (2) or more persons have the same
fiduciary relationship respecting the same shares, unless the Secretary is given
written notice to the contrary and is furnished with a copy of the instrument or
order appointing them or creating the relationship wherein it is so provided,
their acts with respect to voting shall have the following effect: (a) if only
one (1) votes, his act binds all; (b) if more than one (1) votes, the act of the
majority so voting binds all; (c) if more than one (1) votes, but the vote is
evenly split on any particular matter, each faction may vote the securities in
question proportionally, or may apply to the Delaware Court of Chancery for
relief as provided in the DGCL, Section 217(b). If the instrument filed with the
Secretary shows that any such tenancy is held in unequal interests, a majority
or even-split for the purpose of subsection (c) shall be a majority or
even-split in interest.
Section 12. List Of Stockholders. The Secretary shall prepare and make,
at least ten (10) days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at said meeting, arranged in alphabetical
order, showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, at the
option of the corporation either (a) on a reasonably accessible electronic
network, provided that the information required to gain access to such list is
provided with the notice of the meeting, or (b) during ordinary business hours,
at the principal place of business of the corporation. In the event that the
corporation determines to make the list available on an electronic network, the
corporation may take reasonable steps to ensure that such information is
available only to stockholders of the corporation. The list shall be open to
examination of any stockholder during the time of the meeting as provided by
law.
Section 13. Action Without Meeting.
(a) No action shall be taken by the stockholders except at an annual or special
meeting of stockholders called in accordance with these Bylaws, and no action
shall be taken by the stockholders by written consent or by electronic
transmission.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the Board of Directors,
or, if a Chairman has not been appointed or is absent, the President, or, if the
President is absent, a chairman of the meeting chosen by a majority in interest
of the stockholders entitled to vote, present in person or by proxy, shall act
as chairman. The Secretary, or, in his absence, an Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.
(b) The Board of Directors of the corporation shall be entitled to make such
rules or regulations for the conduct of meetings of stockholders as it shall
deem necessary, appropriate or convenient. Subject to such rules and regulations
of the Board of Directors, if any, the chairman of the meeting shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing an agenda or order of business for the meeting,
rules and procedures for maintaining order at the meeting and the safety of
those present, limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted proxies and
such other persons as the chairman shall permit, restrictions on entry to the
meeting after the time fixed for the commencement thereof, limitations on the
time allotted to questions or comments by participants and regulation of the
opening and closing of the polls for balloting on matters which are to be voted
on by ballot. The date and time of the opening and closing of the polls for each
matter upon which the stockholders will vote at the meeting shall be announced
at the meeting. Unless and to the extent determined by the Board of Directors or
the chairman of the meeting, meetings of stockholders shall not be required to
be held in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number And Term Of Office. The authorized number of directors
of the corporation shall be fixed by the Board of Directors from time to time.
Directors need not be stockholders unless so required by the Certificate of
Incorporation. If for any cause, the directors shall not have been elected at an
annual meeting, they may be elected as soon thereafter as convenient at a
special meeting of the stockholders called for that purpose in the manner
provided in these Bylaws.
Section 16. Powers. The powers of the corporation shall be exercised, its
business conducted and its property controlled by the Board of Directors, except
as may be otherwise provided by statute or by the Certificate of Incorporation.
Section 17. Classes of Directors. Subject to the rights of the holders of
any series of Preferred Stock to elect additional directors under specified
circumstances, the directors shall be divided into three classes designated as
Class I, Class II and Class III, respectively. At the first annual meeting of
stockholders following the initial classification of the Board of Directors, the
term of office of the Class I directors shall expire and Class I directors shall
be elected for a full term of three years. At the second annual meeting of
stockholders following such initial classification, the term of office of the
Class II directors shall expire and Class II directors shall be elected for a
full term of three years. At the third annual meeting of stockholders following
such initial classification, the term of office of the Class III directors shall
expire and Class III directors shall be elected for a full term of three years.
At each succeeding annual meeting of stockholders, directors shall be elected
for a full term of three years to succeed the directors of the class whose terms
expire at such annual meeting.
Notwithstanding the foregoing provisions of this section, each director shall
serve until his successor is duly elected and qualified or until his earlier
death, resignation or removal. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
Section 18. Vacancies.
(a) Unless otherwise provided in the Certificate of Incorporation and subject to
the rights of the holders of any series of Preferred Stock or as otherwise
provided by applicable law, any vacancies on the Board of Directors resulting
from death, resignation, disqualification, removal or other causes and any newly
created directorships resulting from any increase in the number of directors
shall, unless the Board of Directors determines by resolution that any such
vacancies or newly created directorships shall be filled by stockholders, be
filled only by the affirmative vote of a majority of the directors then in
office, even though less than a quorum of the Board of Directors. Except (i) as
otherwise provided by applicable law, or (ii) as may be otherwise determined by
resolution of the Board of Directors, and (iii) subject to the rights of holders
of any series of Preferred Stock, any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
director for which the vacancy was created or occurred and until such director's
successor shall have been elected and qualified. A vacancy in the Board of
Directors shall be deemed to exist under this Section 18 in the case of the
death, removal or resignation of any director.
Section 19. Resignation. Any director may resign at any time by
delivering his or her notice in writing or by electronic transmission to the
Secretary, such resignation to specify whether it will be effective at a
particular time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed effective at
the pleasure of the Board of Directors. When one or more directors shall resign
from the Board of Directors, effective at a future date, a majority of the
directors then in office, including those who have so resigned, shall have power
to fill such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each Director so chosen
shall hold office for the unexpired portion of the term of the Director whose
place shall be vacated and until his successor shall have been duly elected and
qualified.
Section 20. Removal.
(a) Subject to the rights of any series of Preferred Stock to elect additional
directors under specified circumstances, neither the Board of Directors nor any
individual director may be removed without cause.
(b) Subject to any limitation imposed by law, any individual director or
directors may be removed with cause by the affirmative vote of the holders of a
majority of the voting power of all then outstanding shares of capital stock of
the corporation entitled to vote generally at an election of directors.
Section 21. Meetings.
(a) Regular Meetings. Unless otherwise restricted by the Certificate of
Incorporation, regular meetings of the Board of Directors may be held at any
time or date and at any place within or without the State of Delaware which has
been designated by the Board of Directors and publicized among all directors,
either orally or in writing, by telephone, including a voice-messaging system or
other system designed to record and communicate messages, facsimile, telegraph
or telex, or by electronic mail or other electronic means. No further notice
shall be required for regular meetings of the Board of Directors.
(b) Special Meetings. Unless otherwise restricted by the Certificate of
Incorporation, special meetings of the Board of Directors may be held at any
time and place within or without the State of Delaware whenever called by the
Chairman of the Board, the Chief Executive Officer, or any two (2) directors.
(c) Meetings by Electronic Communications Equipment. Any member of the Board of
Directors, or of any committee thereof, may participate in a meeting by means of
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting by such means shall constitute presence in person at such meeting.
(d) Notice of Special Meetings. Notice of the time and place of all special
meetings of the Board of Directors shall be orally or in writing, by telephone,
including a voice messaging system or other system or technology designed to
record and communicate messages, facsimile, telegraph or telex, or by electronic
mail or other electronic means, during normal business hours, at least
twenty-four (24) hours before the date and time of the meeting. If notice is
sent by US mail, it shall be sent by first class mail, charges prepaid, at least
three (3) days before the date of the meeting. Notice of any meeting may be
waived in writing, or by electronic transmission, at any time before or after
the meeting and will be waived by any director by attendance thereat, except
when the director attends the meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
(e) Waiver of Notice. The transaction of all business at any meeting of the
Board of Directors, or any committee thereof, however called or noticed, or
wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice, if a quorum be present and if, either before or after
the meeting, each of the directors not present who did not receive notice shall
sign a written waiver of notice or shall waive notice by electronic
transmission. All such waivers shall be filed with the corporate records or made
a part of the minutes of the meeting.
Section 22. Quorum And Voting.
(a) Unless the Certificate of Incorporation requires a greater number and except
with respect to questions relating to indemnification arising under Section 44
for which a quorum shall be one-third of the exact number of directors fixed
from time to time, a quorum of the Board of Directors shall consist of a
majority of the exact number of directors fixed from time to time by the Board
of Directors in accordance with the Certificate of Incorporation; provided,
however, at any meeting whether a quorum be present or otherwise, a majority of
the directors present may adjourn from time to time until the time fixed for the
next regular meeting of the Board of Directors, without notice other than by
announcement at the meeting.
(b) At each meeting of the Board of Directors at which a quorum is present, all
questions and business shall be determined by the affirmative vote of a majority
of the directors present, unless a different vote be required by law, the
Certificate of Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing or by electronic
transmission, and such writing or writings or transmission or transmissions are
filed with the minutes of proceedings of the Board of Directors or committee.
Such filing shall be in paper form if the minutes are maintained in paper form
and shall be in electronic form if the minutes are maintained in electronic
form.
Section 24. Fees And Compensation. Directors shall be entitled to such
compensation for their services as may be approved by the Board of Directors,
including, if so approved, by resolution of the Board of Directors, a fixed sum
and expenses of attendance, if any, for attendance at each regular or special
meeting of the Board of Directors and at any meeting of a committee of the Board
of Directors. Nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise and receiving compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of
Directors may appoint an Executive Committee to consist of one (1) or more
members of the Board of Directors. The Executive Committee, to the extent
permitted by law and provided in the resolution of the Board of Directors shall
have and may exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers which may require it;
but no such committee shall have the power or authority in reference to (i)
approving or adopting, or recommending to the stockholders, any action or matter
expressly required by the DGCL to be submitted to stockholders for approval, or
(ii) adopting, amending or repealing any bylaw of the corporation.
(b) Other Committees. The Board of Directors may, from time to time, appoint
such other committees as may be permitted by law. Such other committees
appointed by the Board of Directors shall consist of one (1) or more members of
the Board of Directors and shall have such powers and perform such duties as may
be prescribed by the resolution or resolutions creating such committees, but in
no event shall any such committee have the powers denied to the Executive
Committee in these Bylaws.
(c) Term. The Board of Directors,
subject to any requirements of any outstanding series of Preferred Stock and the
provisions of subsections (a) or (b) of this Bylaw, may at any time increase or
decrease the number of members of a committee or terminate the existence of a
committee. The membership of a committee member shall terminate on the date of
his death or voluntary resignation from the committee or from the Board of
Directors. The Board of Directors may at any time for any reason remove any
individual committee member and the Board of Directors may fill any committee
vacancy created by death, resignation, removal or increase in the number of
members of the committee. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee, and, in addition, in the
absence or disqualification of any member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise provide, regular
meetings of the Executive Committee or any other committee appointed pursuant to
this Section 25 shall be held at such times and places as are determined by the
Board of Directors, or by any such committee, and when notice thereof has been
given to each member of such committee, no further notice of such regular
meetings need be given thereafter. Special meetings of any such committee may be
held at any place which has been determined from time to time by such committee,
and may be called by any Director who is a member of such committee, upon notice
to the members of such committee of the time and place of such special meeting
given in the manner provided for the giving of notice to members of the Board of
Directors of the time and place of special meetings of the Board of Directors.
Notice of any special meeting of any committee may be waived in writing at any
time before or after the meeting and will be waived by any director by
attendance thereat, except when the director attends such special meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Unless otherwise provided by the Board of Directors in the resolutions
authorizing the creation of the committee, a majority of the authorized number
of members of any such committee shall constitute a quorum for the transaction
of business, and the act of a majority of those present at any meeting at which
a quorum is present shall be the act of such committee.
Section 26. Lead Independent Director. The Chairman of the Board of
Directors, or if the Chairman is not an independent director, one of the
independent directors, may be designated by the Board of Directors as lead
independent director to serve until replaced by the Board of Directors ("Lead
Independent Director"). The Lead Independent Director will, with the Chairman of
the Board of Directors, establish the agenda for regular Board meetings and
serve as chairman of Board of Directors meetings in the absence of the Chairman
of the Board of Directors; establish the agenda for meetings of the independent
directors; coordinate with the committee chairs regarding meeting agendas and
informational requirements; preside over meetings of the independent directors;
preside over any portions of meetings of the Board of Directors at which the
evaluation or compensation of the Chief Executive Officer is presented or
discussed; preside over any portions of meetings of the Board of Directors at
which the performance of the Board of Directors is presented or discussed; and
coordinate the activities of the other independent directors and perform such
other duties as may be established or delegated by the Chairman of the Board of
Directors.
Section 27. Organization. At every meeting of the directors, the Chairman
of the Board of Directors, or, if a Chairman has not been appointed or is
absent, the Lead Independent Director, or if the Lead Independent Directors is
absent, the Chief Executive Officer, or if the Chief Executive Officer is
absent, the President (if a director), or if the President is absent, the most
senior Vice President (if a director), or, in the absence of any such person, a
chairman of the meeting chosen by a majority of the directors present, shall
preside over the meeting. The Secretary, or in his absence, any Assistant
Secretary or other officer or director directed to do so by the Chairman, shall
act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 28. Officers Designated. The officers of the corporation shall
include, if and when designated by the Board of Directors, the Chairman of the
Board of Directors, the Chief Executive Officer, the President, one or more Vice
Presidents, the Secretary, the Chief Financial Officer and the Treasurer. The
Board of Directors may also appoint one or more Assistant Secretaries, Assistant
Treasurers and such other officers and agents with such powers and duties as it
shall deem necessary. The Board of Directors may assign such additional titles
to one or more of the officers as it shall deem appropriate. Any one person may
hold any number of offices of the corporation at any one time unless
specifically prohibited therefrom by law. The salaries and other compensation of
the officers of the corporation shall be fixed by or in the manner designated by
the Board of Directors. The Chief Executive Officer may appoint Vice Presidents
without the consent of the Board of Directors or any Committee of the Board of
Directors provided that such Vice Presidents do not report directly to the CEO
and provided further that such Vice Presidents are not required to file reports
under Section 16 of the Securities and Exchange Act of 1934.
Section 29. Tenure And Duties Of Officers.
(a) General. All officers shall hold office at the pleasure of the Board of
Directors and until their successors shall have been duly elected and qualified,
unless sooner removed. Any officer elected or appointed by the Board of
Directors may be removed at any time by the Board of Directors. If the office of
any officer becomes vacant for any reason, the vacancy may be filled by the
Board of Directors.
(b) Duties of Chairman of the Board of Directors. The Chairman of the Board of
Directors, when present, shall preside at all meetings of the stockholders and
the Board of Directors. The Chairman of the Board of Directors shall perform
other duties commonly incident to the office and shall also perform such other
duties and have such other powers, as the Board of Directors shall designate
from time to time.
(c) Duties of Chief Executive Officer. The Chief Executive Officer shall preside
at all meetings of the stockholders and at all meetings of the Board of
Directors, unless the Chairman of the Board of Directors has been appointed and
is present or a Lead Independent Director has been appointed and is present.
Unless some other officer has been appointed Chief Executive Officer of the
corporation, the President shall be the chief executive officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and officers of the
corporation. To the extent that a Chief Executive Officer has been appointed,
all references in these Bylaws to the President shall be deemed references to
the Chief Executive Officer. The Chief Executive Officer shall perform other
duties commonly incident to the office and shall also perform such other duties
and have such other powers, as the Board of Directors shall designate from time
to time.
(d) Duties of President. The President shall preside at all meetings of the
stockholders and at all meetings of the Board of Directors, unless the Chairman
of the Board of Directors, the Lead Independent Director, or the Chief Executive
Officer has been appointed and is present. Unless some other officer has been
appointed Chief Executive Officer of the corporation, the President shall be the
chief executive officer of the corporation and shall, subject to the control of
the Board of Directors, have general supervision, direction and control of the
business and officers of the corporation. The President shall perform other
duties commonly incident to the office and shall also perform such other duties
and have such other powers, as the Board of Directors shall designate from time
to time.
(e) Duties of Vice Presidents. The Vice Presidents may assume and perform the
duties of the President in the absence or disability of the President or
whenever the office of President is vacant. The Vice Presidents shall perform
other duties commonly incident to their office and shall also perform such other
duties and have such other powers as the Board of Directors or the President
shall designate from time to time.
(f) Duties of Secretary. The Secretary shall attend all meetings of the
stockholders and of the Board of Directors and shall record all acts and
proceedings thereof in the minute book of the corporation. The Secretary shall
give notice in conformity with these Bylaws of all meetings of the stockholders
and of all meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties provided for in
these Bylaws and other duties commonly incident to the office and shall also
perform such other duties and have such other powers, as the Board of Directors
shall designate from time to time. The Chairman of the Board, or in his or her
absence, the Lead Director, or in his or her absence, the Chief Executive
Officer, may direct any Assistant Secretary or other officer to assume and
perform the duties of the Secretary in the absence or disability of the
Secretary, and each Assistant Secretary shall perform other duties commonly
incident to the office and shall also perform such other duties and have such
other powers as the Board of Directors or the Chief Executive Officer shall
designate from time to time.
(g) Duties of Chief Financial Officer. The Chief Financial Officer shall keep or
cause to be kept the books of account of the corporation in a thorough and
proper manner and shall render statements of the financial affairs of the
corporation in such form and as often as required by the Board of Directors or
the President. The Chief Financial Officer, subject to the order of the Board of
Directors, shall have the custody of all funds and securities of the
corporation. The Chief Financial Officer shall perform other duties commonly
incident to the office and shall also perform such other duties and have such
other powers as the Board of Directors or the President shall designate from
time to time. The President may direct the Vice President of Finance, Treasurer
or any Assistant Treasurer, or the Controller or any Assistant Controller to
assume and perform the duties of the Chief Financial Officer in the absence or
disability of the Chief Financial Officer, and each Vice President of Finance,
Treasurer and Assistant Treasurer and each Controller and Assistant Controller
shall perform other duties commonly incident to the office and shall also
perform such other duties and have such other powers as the Board of Directors
or the President shall designate from time to time.
Section 30. Delegation Of Authority. The Board of Directors may from time
to time delegate the powers or duties of any officer to any other officer or
agent, notwithstanding any provision hereof.
Section 31. Resignations. Any officer may resign at any time by giving
notice in writing or by electronic transmission to the Board of Directors or to
the President or to the Secretary. Any such resignation shall be effective when
received by the person or persons to whom such notice is given, unless a later
time is specified therein, in which event the resignation shall become effective
at such later time. Unless otherwise specified in such notice, the acceptance of
any such resignation shall not be necessary to make it effective. Any
resignation shall be without prejudice to the rights, if any, of the corporation
under any contract with the resigning officer.
Section 32. Removal. Any officer may be removed from office at any time,
either with or without cause, by the affirmative vote of a majority of the
directors in office at the time, or by the unanimous written consent of the
directors in office at the time, or by any committee or by the Chief Executive
Officer or by other superior officers upon whom such power of removal may have
been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE
CORPORATION
Section 33. Execution Of Corporate Instruments. The Board of Directors
may, in its discretion, determine the method and designate the signatory officer
or officers, or other person or persons, to execute on behalf of the corporation
any corporate instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts on behalf of
the corporation, except where otherwise provided by law or these Bylaws, and
such execution or signature shall be binding upon the corporation.
All checks and drafts drawn on banks or other depositaries on funds to the
credit of the corporation or in special accounts of the corporation shall be
signed by such person or persons as the Board of Directors shall authorize so to
do.
Unless authorized or ratified by the Board of Directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
Section 34. Voting Of Securities Owned By The Corporation. All stock and
other securities of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such authorization,
by the Chairman of the Board of Directors, the Chief Executive Officer, the
President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 35. Form And Execution Of Certificates. Certificates for the
shares of stock of the corporation shall be in such form as is consistent with
the Certificate of Incorporation and applicable law. Every holder of stock in
the corporation shall be entitled to have a certificate signed by or in the name
of the corporation by the Chairman of the Board of Directors, or the President
or any Vice President and by the Treasurer or Assistant Treasurer or the
Secretary or Assistant Secretary, certifying the number of shares owned by him
in the corporation. Any or all of the signatures on the certificate may be
facsimiles. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue. Each certificate shall state
upon the face or back thereof, in full or in summary, all of the powers,
designations, preferences, and rights, and the limitations or restrictions of
the shares authorized to be issued or shall, except as otherwise required by
law, set forth on the face or back a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional, or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a reasonable time after
the issuance or transfer of uncertificated stock, the corporation shall send to
the registered owner thereof a written notice containing the information
required to be set forth or stated on certificates pursuant to this section or
otherwise required by law or with respect to this section a statement that the
corporation will furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Section 36. Lost Certificates. A new certificate or certificates shall be
issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a condition
precedent to the issuance of a new certificate or certificates, the owner of
such lost, stolen, or destroyed certificate or certificates, or the owner's
legal representative, to agree to indemnify the corporation in such manner as it
shall require or to give the corporation a surety bond in such form and amount
as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen,
or destroyed.
Section 37. Transfers.
(a) Transfers of record of shares of stock of the corporation shall be made only
upon its books by the holders thereof, in person or by attorney duly authorized,
and upon the surrender of a properly endorsed certificate or certificates for a
like number of shares.
(b) The corporation shall have power to enter into and perform any agreement
with any number of stockholders of any one or more classes of stock of the
corporation to restrict the transfer of shares of stock of the corporation of
any one or more classes owned by such stockholders in any manner not prohibited
by the DGCL.
Section 38. Fixing Record Dates.
(a) In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
the Board of Directors may fix, in advance, a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall, subject to
applicable law, not be more than sixty (60) nor less than ten (10) days before
the date of such meeting. If no record date is fixed by the Board of Directors,
the record date for determining stockholders entitled to notice of or to vote at
a meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is waived, at the close
of business on the day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
(b) In order that the corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
or the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty (60) days prior to
such action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
Section 39. Registered Stockholders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 40. Execution Of Other Securities. All bonds, debentures and
other corporate securities of the corporation, other than stock certificates
(covered in Section 34), may be signed by the Chairman of the Board of
Directors, the President or any Vice President, or such other person as may be
authorized by the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the signature of
the Secretary or an Assistant Secretary, or the Chief Financial Officer or
Treasurer or an Assistant Treasurer; provided, however, that where any such
bond, debenture or other corporate security shall be authenticated by the manual
signature, or where permissible facsimile signature, of a trustee under an
indenture pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and attesting the
corporate seal on such bond, debenture or other corporate security may be the
imprinted facsimile of the signatures of such persons. Interest coupons
appertaining to any such bond, debenture or other corporate security,
authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an
Assistant Treasurer of the corporation or such other person as may be authorized
by the Board of Directors, or bear imprinted thereon the facsimile signature of
such person. In case any officer who shall have signed or attested any bond,
debenture or other corporate security, or whose facsimile signature shall appear
thereon or on any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or attested
shall have been delivered, such bond, debenture or other corporate security
nevertheless may be adopted by the corporation and issued and delivered as
though the person who signed the same or whose facsimile signature shall have
been used thereon had not ceased to be such officer of the corporation.
ARTICLE IX
DIVIDENDS
Section 41. Declaration Of Dividends. Dividends upon the capital stock of
the corporation, subject to the provisions of the Certificate of Incorporation
and applicable law, if any, may be declared by the Board of Directors pursuant
to law at any regular or special meeting. Dividends may be paid in cash, in
property, or in shares of the capital stock, subject to the provisions of the
Certificate of Incorporation and applicable law.
Section 42. Dividend Reserve. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the Board of Directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the Board of Directors shall think conducive to the
interests of the corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 43. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 44. Indemnification Of Directors, Executive Officers, Other Officers,
Employees And Other Agents.
(a) Directors and Officers. The corporation shall indemnify its directors and
officers to the fullest extent not prohibited by the DGCL or any other
applicable law; provided, however, that the corporation may modify the extent of
such indemnification by individual contracts with its directors and officers;
and, provided, further, that the corporation shall not be required to indemnify
any director or officer in connection with any proceeding (or part thereof)
initiated by such person unless (i) such indemnification is expressly required
to be made by law, (ii) the proceeding was authorized by the Board of Directors
of the corporation, (iii) such indemnification is provided by the corporation,
in its sole discretion, pursuant to the powers vested in the corporation under
the DGCL or any other applicable law or (iv) such indemnification is required to
be made under subsection (d).
(b) Employees and Other Agents. The corporation shall have power to indemnify
its employees and other agents as set forth in the DGCL or any other applicable
law. The Board of Directors shall have the power to delegate the determination
of whether indemnification shall be given to any such person except executive
officers to such officers or other persons as the Board of Directors shall
determine.
(c) Expenses. The corporation shall advance and pay to any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer, of
the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, prior to the final disposition of the proceeding, promptly
following request therefor, all expenses incurred by any director or officer in
connection with such proceeding. Notwithstanding the foregoing, if the DGCL
requires, an advancement of expenses incurred by a director or officer in his or
her capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to the
corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of
such indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal (hereinafter a "final adjudication") that such indemnitee is not entitled
to be indemnified for such expenses under this Section 44 or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph
(e) of this Section 44, no advance shall be made by the corporation to an
officer of the corporation (except by reason of the fact that such officer is or
was a director of the corporation in which event this paragraph shall not apply)
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made (i) by a
majority vote of directors who were not parties to the proceeding, even if not a
quorum, or (ii) by a committee of such directors designated by a majority vote
of such directors, even though less than a quorum, or (iii) if there are no such
directors, or such directors so direct, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation.
(d) Enforcement. Without the necessity of entering into an express contract, all
rights to indemnification and advances to directors and officers under this
Bylaw shall be deemed to be contractual rights and be effective to the same
extent and as if provided for in a contract between the corporation and the
director or officer. Any right to indemnification or advances granted by this
Section 44 to a director or officer shall be enforceable by or on behalf of the
person holding such right in any court of competent jurisdiction if (i) the
claim for indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request therefor.
The claimant in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting the claim. In
connection with any claim for indemnification, the corporation shall be entitled
to raise as a defense to any such action that the claimant has not met the
standards of conduct that make it permissible under the DGCL or any other
applicable law for the corporation to indemnify the claimant for the amount
claimed. In connection with any claim by an officer of the corporation (except
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such officer is or was a director of
the corporation) for advances, the corporation shall be entitled to raise a
defense as to any such action clear and convincing evidence that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation, or with respect to any
criminal action or proceeding that such person acted without reasonable cause to
believe that his conduct was lawful. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the DGCL or
any other applicable law, nor an actual determination by the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that claimant has not
met the applicable standard of conduct. In any suit brought by a director or
officer to enforce a right to indemnification or to an advancement of expenses
hereunder, the burden of proving that the director or officer is not entitled to
be indemnified, or to such advancement of expenses, under this Section 44 or
otherwise shall be on the corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any person by this Bylaw
shall not be exclusive of any other right which such person may have or
hereafter acquire under any applicable statute, provision of the Certificate of
Incorporation, Bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of its directors,
officers, employees or agents respecting indemnification and advances, to the
fullest extent not prohibited by the DGCL, or by any other applicable law.
(f) Survival of Rights. The rights conferred on any person by this Bylaw shall
continue as to a person who has ceased to be a director officer, employee or
other agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(g) Insurance. To the fullest extent permitted by the DGCL or any other
applicable law, the corporation, upon approval by the Board of Directors, may
purchase insurance on behalf of any person required or permitted to be
indemnified pursuant to this Section 44.
(h) Amendments. Any repeal or modification of this Section 44 shall only be
prospective and shall not affect the rights under this Bylaw in effect at the
time of the alleged occurrence of any action or omission to act that is the
cause of any proceeding against any agent of the corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the corporation shall
nevertheless indemnify each director and officer to the full extent not
prohibited by any applicable portion of this Section 44 that shall not have been
invalidated, or by any other applicable law. If this Section 44 shall be invalid
due to the application of the indemnification provisions of another
jurisdiction, then the corporation shall indemnify each director and officer to
the full extent under any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the following
definitions shall apply:
(1) The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
(2) The term "expenses" shall be broadly construed and shall
include, without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses of any
nature or kind incurred in connection with any proceeding.
(3) The term the "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Section 44 with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(4) References to a "director," "executive officer," "officer,"
"employee," or "agent" of the corporation shall include,
without limitation, situations where such person is serving at the request of
the corporation as, respectively, a director, executive officer, officer,
employee, trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
(5) References to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this Section 44.
ARTICLE XII
NOTICES
Section 45. Notices.
(a) Notice To Stockholders. Written notice to stockholders of stockholder
meetings shall be given as provided in Section 7 herein. Without limiting the
manner by which notice may otherwise be given effectively to stockholders under
any agreement or contract with such stockholder, and except as otherwise
required by law, written notice to stockholders for purposes other than
stockholder meetings may be sent by US mail or nationally recognized overnight
courier, or by facsimile, telegraph or telex or by electronic mail or other
electronic means.
(b) Notice To Directors. Any notice required to be given to any director may be
given by the method stated in subsection (a), as otherwise provided in these
Bylaws, or by overnight delivery service, facsimile, telex or telegram, except
that such notice other than one which is delivered personally shall be sent to
such address as such director shall have filed in writing with the Secretary,
or, in the absence of such filing, to the last known post office address of such
director.
(c) Affidavit Of Mailing. An affidavit of mailing, executed by a duly authorized
and competent employee of the corporation or its transfer agent appointed with
respect to the class of stock affected, or other agent, specifying the name and
address or the names and addresses of the stockholder or stockholders, or
director or directors, to whom any such notice or notices was or were given, and
the time and method of giving the same, shall in the absence of fraud, be prima
facie evidence of the facts therein contained.
(d) Methods of Notice. It shall not be necessary that the same method of giving
notice be employed in respect of all recipients of notice, but one permissible
method may be employed in respect of any one or more, and any other permissible
method or methods may be employed in respect of any other or others.
(e) Notice To Person With Whom Communication Is Unlawful. Whenever notice is
required to be given, under any provision of law or of the Certificate of
Incorporation or Bylaws of the corporation, to any person with whom
communication is unlawful, the giving of such notice to such person shall not be
required and there shall be no duty to apply to any governmental authority or
agency for a license or permit to give such notice to such person. Any action or
meeting which shall be taken or held without notice to any such person with whom
communication is unlawful shall have the same force and effect as if such notice
had been duly given. In the event that the action taken by the corporation is
such as to require the filing of a certificate under any provision of the DGCL,
the certificate shall state, if such is the fact and if notice is required, that
notice was given to all persons entitled to receive notice except such persons
with whom communication is unlawful.
(f) Notice to Stockholders Sharing an Address. Except as otherwise prohibited
under DGCL, any notice given under the provisions of DGCL, the Certificate of
Incorporation or the Bylaws shall be effective if given by a single written
notice to stockholders who share an address if consented to by the stockholders
at that address to whom such notice is given. Such consent shall have been
deemed to have been given if such stockholder fails to object in writing to the
corporation within 60 days of having been given notice by the corporation of its
intention to send the single notice. Any consent shall be revocable by the
stockholder by written notice to the corporation.
ARTICLE XIII
AMENDMENTS
Section 46. Amendments. Subject to the limitation set forth in Section
44(h) of these Bylaws or the provisions of the Certificate of Incorporation the
Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws
of the corporation. The stockholders also shall have power to adopt, amend or
repeal the Bylaws of the corporation; provided, however, that, in addition to
any vote of the holders of any class or series of stock of the corporation
required by law or by the Certificate of Incorporation, the affirmative vote of
the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting
power of all of the then-outstanding shares of the capital stock of the
corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to adopt, amend or repeal any
provision of the Bylaws of the corporation.
EXHIBIT 10.1
January 31, 2006
Mr. Steven R. Springsteel
20400 Steven Creek Boulevard, Suite 400
Cupertino, CA 95014
Dear Steve:
This letter sets forth the terms and conditions of your employment with
Chordiant Software, Inc. (the "Company" or "Chordiant") as its President and
Chief Executive Officer reporting directly to the Board of Directors (the
"Board"). Upon execution by the parties, this letter agreement shall be deemed
effective February 1, 2006.
1. As President and Chief Executive Officer of Chordiant, you will perform the duties customarily associated with this position and such duties commensurate with your position as may be assigned to you by the Board.
2. Your annual base salary will be $495,000, less standard payroll deductions and withholdings, paid on the Company's regular payroll dates. The Compensation Committee of the Board will review your base salary in the last calendar quarter of 2006, however the Board is not obligated to increase your base salary at that time.
3. You will be eligible for bonuses under Chordiant's 2006 Executive Bonus Plan (prorated for the second quarter of 2006. Your target bonus for the 2006 fiscal year is 80% of your prorated base salary. Except as otherwise set forth in this paragraph concerning your eligibility for participation, bonuses will be earned, calculated and paid under the terms and conditions set forth in the 2006 Executive Bonus Plan.
4. Subject to approval by the Board, upon acceptance of this offer, you will be granted an option ("Initial Option") for one million shares (1,000,000) of common stock of the Company under the Company's 2005 Equity Incentive Plan. The Initial Option will be subject to a four year vesting schedule (1/48 per month), and shall be governed in all respects by the terms and conditions specified in the applicable plan documents and option agreement between you and the Company. Notwithstanding the foregoing, the terms of this offer letter relating to vesting in the event of a Change of Control (as defined below), a resignation for Good Reason (as defined below), or termination without Cause (as defined below) shall govern in the event of a conflict between this offer letter and any applicable plan documents, option agreements or restricted share agreements.
5. You will be eligible for all standard Company benefits, including four weeks' paid vacation and medical and dental coverage as well as the following non-standard benefit: a term life insurance policy in the amount of $1,000,000 (with premiums paid by the Company.) For purposes of Company benefits, you will be given service credit for your prior tenure with the Company. The Company reserves the right to modify your compensation and benefits from time to time, as it deems necessary.
6. As a condition of your employment, you will be expected to abide by the Company's written policies and procedures, and to sign and comply with the Company's standard form of Proprietary Information and Inventions Agreement. The Company is committed to maintaining a high standard of business conduct and ethics. As a condition of your employment, you will be expected to: (i) fully comply with the Company's Code of Business Conduct and Ethics, (ii) perform your duties in compliance with law, (iii) report to the Board of Directors in candor and absolute truthfulness, and (iv) assist in the development and implementation of effective internal control over financial reporting.
7. In the event of the consummation of a Change in Control (as defined herein), the Company will accelerate the vesting of any equity compensation that you have been granted (other than the Initial Option) as of the effective date of the Change in Control such that the equity compensation shall be fully vested for such additional twelve (12) month period as of the effective date of the Change in Control. In the case of the Initial Option, the Initial Option shall become fully vested as of the effective date of the Change of Control. As a condition to receiving such additional vesting, you agree that you shall provide the Company with a full and effective release and waiver of any claims or rights against the Company or related parties in the form attached as Exhibit A. Following such Change in Control, you shall continue to vest in the remaining award in accordance with the original vesting schedule (after giving effect to the foregoing acceleration) at the same rate as immediately prior to the Change in Control provided that you continue to remain employed with the Company as of each vesting date.
For purposes of this offer letter, a Change in Control shall mean: (i) a dissolution, liquidation or sale of all or substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation; (iii) a reverse merger in which the Company is the surviving corporation but the shares of the Company's common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; or (iv) the acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or any affiliate of the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of directors.
8. Either you or the Company may terminate your employment relationship at any time with or without Cause. If the Company terminates your employment without Cause (as defined herein) at any time, or you resign your employment for Good Reason (as defined herein) at any time, then: (i) the Company will make severance payments to you in the form of monthly payments in the amount of one hundred thousand dollars ($100,000) for ten (10) months following the termination date, payable on the Company's ordinary payroll dates, subject to standard payroll deductions and withholdings; provided, however, that the Company shall defer or accelerate such payments as required to avoid the imposition of additional taxes under Internal Revenue Code Section 409A; and (ii) the vesting of any equity compensation that you have been granted through the last day of your employment will automatically accelerate such that the shares subject to each grant that would have vested had you remained employed for one year beyond the termination date will be fully vested for such additional one year period as of the termination date. Such acceleration shall be in addition to any accelerated vesting you previously received upon the consummation of a Change of Control but in no event the amount of equity compensation in which you shall vest shall exceed the amount of the original grant. As a condition to receiving any of these severance benefits, you agree that you shall provide the Company with a full and effective release and waiver of any claims or rights against the Company or related parties in the form attached as Exhibit A.
If you resign without Good Reason or your employment is terminated for Cause, all compensation and benefits will cease immediately, and you will receive no further compensation or benefits from the Company, including (without limitation) the items listed in the preceding paragraph.
For purposes of this offer letter, "Cause" shall mean: (i) conviction of, or plea of nolo contendere to, a felony; (ii) participation in a fraud against the Company; (iii) participation in an act of dishonesty against the Company intended to result in your substantial personal enrichment; (iv) willful material breach of the Company's written policies; (v) intentional significant damage to the Company's property; (vi) material breach of this offer letter or your Proprietary Information and Inventions Agreement; or (vii) conduct by you that, in the good faith and reasonable determination of the Board, demonstrates gross unfitness to serve provided that in such event, the Company shall provide notice to you describing the nature of the gross unfitness and you shall thereafter have ten (10) days to cure such gross unfitness if such gross unfitness is capable of being cured. The Company may not terminate your employment for Cause unless and until you receive a copy of a resolution duly adopted by the affirmative vote of at least a majority of the Board of Directors of the Company ("Board") finding that in the good faith opinion of the Board, you were guilty of the conduct constituting "Cause" and specifying the particulars thereof in detail. The Company shall provide you with reasonable notice of the Board vote and an opportunity for you, together with your counsel, to be heard before the Board vote. Physical disability will not constitute Cause.
For purposes of this letter offer letter, "Good Reason" shall mean that any one of the following events occurs during your employment with the Company without your consent: (i) any reduction in your annual base salary and bonus opportunity, except to the extent that the annual base salaries and bonus opportunities of all other executive officers of the Company are similarly reduced; (ii) any material reduction in your benefits and incentives, or any action by the Company that would materially and adversely affect your participation in, or reduce your benefits under any such plans, except to the extent that such benefits and incentives of all other executive officers of the Company are similarly reduced; (iii) any material change in your position or responsibilities (including a change in your title without your consent or your ceasing to report to the Board) that represents an adverse change from your position or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith that is remedied by the Company promptly after you give notice thereof; (iv) the Company's requiring you to relocate to any place outside of a twenty-five (25) mile driving distance of your current work site, except for reasonably required travel on the business of the Company or its affiliates or unless you accept such relocation opportunity; (v) any failure to pay you any compensation or benefits to which you are entitled within fifteen (15) days of the date due; or (vi) the Board's failure to re-nominate you as a member of the Board of Directors upon the expiration of your Board term. You may terminate your employment for Good Reason so long as you tender your resignation to the Company within thirty (30) days after the occurrence of the event that forms the basis for the resignation for Good Reason; provided, however, that first you shall provide written notice to the Company describing the nature of the event that you believe forms the basis for your resignation for Good Reason, and the Company shall thereafter have ten (10) days to cure such event.
9. The Company agrees to directly pay your legal fees associated with entering into this offer letter, up to $15,000, upon receiving invoices for such services.
10. In the event that the payments and benefits provided for in this offer letter (such payments and benefits hereinafter referred to as "Payments") constitute "parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), and the aggregate value of such Payments, as determined in accordance with Section 280G of the Code and the Treasury Regulations thereunder is less than the product obtained by multiplying 3.59 by your "base amount" within the meaning of Code Section 280G(b)(3), then such Payments shall be reduced to the extent necessary (but only to that extent) so that no portion of such Payments will be subject to the Excise Tax. Alternatively, in the event that the Payments constitute "parachute payments" within the meaning of Section 280G of the Code, the Payments would be subject to the Excise Tax, and the aggregate value of the Payments, as determined in accordance with Section 280G of the Code and the Treasury Regulations thereunder is equal to or greater than the product obtained by multiplying 3.59 by your "base amount" within the meaning of Code Section 280G(b)(3), then you shall receive (i) a payment from the Company sufficient to pay such excise tax plus any interest or penalties incurred by you with respect to such excise tax, plus (ii) an additional payment from the Company sufficient to pay the excise tax and federal and state income and employment taxes arising from the payments made by the Company to you pursuant to this sentence (together, the "Excise Tax Gross-Up Payment"). Notwithstanding anything to the contrary set forth herein, the maximum amount of the Excise Tax Gross - Up Payment which the Company shall be obligated to pay shall be $1,500,000.
For purposes of determining whether any of the Payments will be subject to the Excise Tax and the amount of such Excise Tax: (i) any other payments or benefits received or to be received by you in connection with transactions contemplated by a Change in Control, including your termination of employment (whether pursuant to the terms of this offer letter or any other plan, arrangement or agreement with the Company), shall be treated as "parachute payments" within the meaning of Section 280G of the Code or any similar or successor provision, and all "excess parachute payments" within the meaning of Section 280G or any similar or successor provision shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company such other payments or benefits (in whole or in part) do not constitute parachute payments, or such parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G (or any similar or successor provision of the Code) in excess of the base amount within the meaning of Section 280G (or any similar or successor provision of the Code), or such Payments are otherwise not subject to the Excise Tax; (ii) the amount of the Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Payments or (b) the amount of the excess parachute payments within the meaning of Section 280G; (iii) the value of any non-cash benefits or any deferred payment or benefit and any related determinations shall be made by the accounting firm that is the Company's outside tax accountants at the time of such determination, which firm must be reasonably acceptable to you (the "Accounting Firm") in accordance with the principles of Section 280G of the Code.
For purposes of determining the amount of the Excise Tax Gross-Up Payment, you shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Excise Tax Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the date the Excise Tax Gross-Up Payment is to be made, net of the permissible reduction in federal income taxes which could be obtained from deduction of such state and local taxes.
In the event that the Excise Tax is subsequently determined to be less than the amount taken into account under this paragraph 10, you shall repay to the Company (promptly following the time at which the amount of such reduction in Excise Tax is finally determined the portion of the Excise Tax Gross-Up Payment attributable to such reduction (plus the portion of the Excise Tax Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Excise Tax Gross-Up Payment being repaid by you if such repayment results in a reduction in Excise Tax and/or a federal, state or local income tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code.
In the event that the Excise Tax is subsequently determined to exceed the amount taken into account under this paragraph 10 (including by reason of any payment the existence or amount of which cannot be determined at the time of the Excise Tax Gross-Up Payment), the Company shall make an additional Excise Tax Gross-Up Payment in respect of such excess (plus any interest payable with respect to such excess at the rate provided in Section 1274(b)(2)(B) of the Code) promptly following the time at which the amount of such excess is finally determined in accordance with the principles set forth in this paragraph 10.
All determinations required to be made under this paragraph 10 shall be made by the Accounting Firm. The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and you. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm's determinations must be made with substantial authority (within the meaning of Section 6662 of the Code).
11. This offer letter, together with any applicable restricted share and other equity compensation agreements, and your Proprietary Information and Inventions Agreement, constitute the complete, final and exclusive embodiment of the entire agreement between you and Chordiant with respect to the terms and conditions of your employment. In entering into this offer letter, neither party is relying upon any promise or representation, written or oral, other than those expressly contained herein, and this offer letter supersedes any other such promises, representations or agreements. It may not be amended or modified except in a written agreement signed by you and a duly authorized Company officer. As required by law, this offer of employment is subject to proof of your right to work in the United States.
If you agree to the terms as described above, please sign below and return this letter to me.
Very truly yours,
/s/ Sam Spadafora
Sam Spadafora
Chairman of the Board of Directors
Chordiant Software, Inc.
Agreed and Accepted:
By: /s/ Steven R. Springsteel____________________
Steven R. Springsteel
Date: _January 31, 2006________________________Exhibit A
RELEASE AGREEMENT FOR EMPLOYEES 40
YEARS OF AGE OR OLDER
In exchange for the severance or change in control
benefits I am receiving to which I would not otherwise be entitled, I hereby
release, acquit and forever discharge the Company, and its officers, directors,
agents, servants, employees, attorneys, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys' fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising out of or in any
way related to agreements, events, acts or conduct at any time prior to and
including the execution date of this Release Agreement, including but not
limited to: all such claims and demands directly or indirectly arising out of or
in any way connected with my employment with the Company or the termination of
that employment; claims or demands related to salary, bonuses, commissions,
stock, stock options, or any other ownership interests in the Company, vacation
pay, fringe benefits, expense reimbursements, severance pay, or any other form
of compensation; claims pursuant to any federal, state or local law, statute, or
cause of action including, but not limited to, the federal Civil Rights Act of
1964, as amended; the federal Americans with Disabilities Act of 1990; the
federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"); the
California Fair Employment and Housing Act, as amended; tort law; contract law;
wrongful discharge; discrimination; harassment; fraud; defamation; emotional
distress; and breach of the implied covenant of good faith and fair dealing.
Notwithstanding the previous sentence, the parties agree that I will continue to
be covered by the terms and conditions of the Indemnity Agreement entered into
between me and the Company (the "Indemnity Agreement"), if any, and the terms of
the Company's D&O insurance policy for claims against me that arise out of
matters or events that occurred prior to my termination (or, if applicable, a
Change of Control). This release does not extend to any severance benefits due
me under the offer letter to which this is attached as Exhibit A or any rights
to indemnification I may have under the Indemnity Agreement or the Company's D&O
insurance policy.
I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this Release; (b) I have been advised hereby
that I have the right to consult with an attorney prior to executing this
Release; (c) I have twenty-one (21) days to consider this Release (although I
may choose to voluntarily execute this release earlier); (d) I have seven (7)
days following my execution of this Release to revoke my agreement to it; and
(e) this Release will not be effective until the date upon which the revocation
period has expired, which will be the eighth day after this Release is executed
by me.
I UNDERSTAND THAT THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS. In giving this release, which includes claims which may be unknown to me
at present, I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any unknown or
unsuspected claims I may have against the Company.
DATED: AGREED:
[Employee's Name]
Dated:_________________ |
Agreed:__________________________ [Employee's Name] |
EXHIBIT 10.2
FORM OF STOCK OPTION AGREEMENT
CHORDIANT SOFTWARE, INC.
2005 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)
Pursuant to your Stock Option Grant Notice ("Grant Notice") and this Stock
Option Agreement, Chordiant Software, Inc. (the "Company") has granted you an
option under its 2005 Equity Incentive Plan (the "Plan") to purchase the number
of shares of the Company's Common Stock indicated in your Grant Notice at the
exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.
The details of your option are as follows:
12. VESTING. Subject to the limitations contained herein, your option will vest
as provided in your Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.
13. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock
subject to your option and your exercise price per share referenced in your
Grant Notice may be adjusted from time to time for Capitalization Adjustments.
14. METHOD OF PAYMENT. Payment of the exercise price is due in full upon
exercise of all or any part of your option. You may elect to make payment of the
exercise price in cash or by check or in any other manner permitted by your
Grant Notice, which may include one or more of the following:
(a) In the Company's sole discretion at the time your option is exercised and
provided that at the time of exercise the Common Stock is publicly traded and
quoted regularly in The Wall Street Journal, pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board that, prior to
the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.
(b) Provided that at the time of exercise the Common Stock is publicly traded
and quoted regularly in The Wall Street Journal, by delivery of already-owned
shares of Common Stock either that you have held for the period required to
avoid a charge to the Company's reported earnings (generally six (6) months) or
that you did not acquire, directly or indirectly from the Company, that are
owned free and clear of any liens, claims, encumbrances or security interests,
and that are valued at Fair Market Value on the date of exercise. "Delivery" for
these purposes, in the sole discretion of the Company at the time you exercise
your option, shall include delivery to the Company of your attestation of
ownership of such shares of Common Stock in a form approved by the Company.
Notwithstanding the foregoing, you may not exercise your option by tender to the
Company of Common Stock to the extent such tender would violate the provisions
of any law, regulation or agreement restricting the redemption of the Company's
stock.
(c) Provided that at the time of exercise the Company has adopted FAS 123, as
revised, and has established a procedure for such exercise, by a "net exercise"
arrangement pursuant to which the Company will reduce the number of shares of
Common Stock issued upon exercise of your option by the largest whole number of
shares with a Fair Market Value that does not exceed the aggregate exercise
price; provided, however, the Company shall accept a cash or other payment from
you to the extent of any remaining balance of the aggregate exercise price not
satisfied by such holding back of whole shares; provided, however, shares of
Common Stock will no longer be outstanding under your option and will not be
exercisable thereafter to the extent that (1) shares are used to pay the
exercise price pursuant to the "net exercise," (2) shares are delivered to you
as a result of such exercise, and (3) shares are withheld by the Company to
satisfy tax withholding obligations.
15. WHOLE SHARES. You may exercise your option only for whole shares of Common
Stock.
16. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common
Stock issuable upon such exercise are then registered under the Securities Act
or, if such shares of Common Stock are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may
not exercise your option if the Company determines that such exercise would not
be in material compliance with such laws and regulations.
17. TERM. You may not exercise your option before the commencement of its term
or after its term expires. The term of your option commences on the Date of
Grant and expires upon the earliest of the following:
immediately upon the termination of your Continuous Service for Cause;
(a) three (3) months after the termination of your Continuous Service for any
reason other than Cause, Disability or death, provided that if during any part
of such three- (3-) month period you may not exercise your option solely because
of the condition set forth in the preceding paragraph relating to "Securities
Law Compliance," your option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period
of three (3) months after the termination of your Continuous Service;
(b) twelve (12) months after the termination of your Continuous Service due to
your Disability;
(c) eighteen (18) months after your death if you die either during your
Continuous Service or within three (3) months after your Continuous Service
terminates for any reason other than Cause;
(d) the Expiration Date indicated in your Grant Notice; or
(e) the day before the tenth (10th) anniversary of the Date of Grant.
If your option is an Incentive Stock Option, note that, to obtain the federal
income tax advantages associated with an Incentive Stock Option, the Code
requires that at all times beginning on the date of grant of your option and
ending on the day three (3) months before the date of your option's exercise,
you must be an employee of the Company or an Affiliate, except in the event of
your death or Disability. The Company has provided for extended exercisability
of your option under certain circumstances for your benefit but cannot guarantee
that your option will necessarily be treated as an Incentive Stock Option if you
continue to provide services to the Company or an Affiliate as a Consultant or
Director after your employment terminates or if you otherwise exercise your
option more than three (3) months after the date your employment terminates.
18. EXERCISE.
(a) You may exercise the vested portion of your option (and the unvested portion
of your option if your Grant Notice so permits) during its term by delivering a
Notice of Exercise (in a form designated by the Company) together with the
exercise price to the Secretary of the Company, or to such other person as the
Company may designate, during regular business hours, together with such
additional documents as the Company may then require.
(b) By exercising your option you agree that, as a condition to any exercise of
your option, the Company may require you to enter into an arrangement providing
for the payment by you to the Company of any tax withholding obligation of the
Company arising by reason of (1) the exercise of your option, (2) the lapse of
any substantial risk of forfeiture to which the shares of Common Stock are
subject at the time of exercise, or (3) the disposition of shares of Common
Stock acquired upon such exercise.
(c) If your option is an Incentive Stock Option, by exercising your option you
agree that you will notify the Company in writing within fifteen (15) days after
the date of any disposition of any of the shares of the Common Stock issued upon
exercise of your option that occurs within two (2) years after the date of your
option grant or within one (1) year after such shares of Common Stock are
transferred upon exercise of your option.
19. TRANSFERABILITY. Your option is not transferable, except by will or by the
laws of descent and distribution, and is exercisable during your life only by
you. Notwithstanding the foregoing, by delivering written notice to the Company,
in a form satisfactory to the Company, you may designate a third party who, in
the event of your death, shall thereafter be entitled to exercise your option.
20. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or of the Company or an Affiliate to continue your employment.
In addition, nothing in your option shall obligate the Company or an Affiliate,
their respective stockholders, Boards of Directors, Officers or Employees to
continue any relationship that you might have as a Director or Consultant for
the Company or an Affiliate.
21. WITHHOLDING OBLIGATIONS.
(a) At the time you exercise your option, in whole or in part, or at any time
thereafter as requested by the Company, you hereby authorize withholding from
payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a "cashless exercise" pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or
an Affiliate, if any, which arise in connection with the exercise of your
option.
(b) Upon your request and subject to approval by the Company, in its sole
discretion, and compliance with any applicable legal conditions or restrictions,
the Company may withhold from fully vested shares of Common Stock otherwise
issuable to you upon the exercise of your option a number of whole shares of
Common Stock having a Fair Market Value, determined by the Company as of the
date of exercise, not in excess of the minimum amount of tax required to be
withheld by law (or such lower amount as may be necessary to avoid variable
award accounting). If the date of determination of any tax withholding
obligation is deferred to a date later than the date of exercise of your option,
share withholding pursuant to the preceding sentence shall not be permitted
unless you make a proper and timely election under Section 83(b) of the Code,
covering the aggregate number of shares of Common Stock acquired upon such
exercise with respect to which such determination is otherwise deferred, to
accelerate the determination of such tax withholding obligation to the date of
exercise of your option. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection
with such share withholding procedure shall be your sole responsibility.
(c) You may not exercise your option unless the tax withholding obligations of
the Company and/or any Affiliate are satisfied. Accordingly, you may not be able
to exercise your option when desired even though your option is vested, and the
Company shall have no obligation to issue a certificate for such shares of
Common Stock or release such shares of Common Stock from any escrow provided for
herein unless such obligations are satisfied.
22. NOTICES. Any notices provided for in your option or the Plan shall be given
in writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by mail by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.
23. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is
further subject to all interpretations, amendments, rules and regulations, which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of your option and those of the
Plan, the provisions of the Plan shall control.
* * [NOTE: THIS IS THE END OF THE DOCUMENT] * *
NOTICE OF EXERCISE
CHORDIANT SOFTWARE, INC. 20400 Stevens Creek Boulevard Suite 400 Cupertino, California 95014 |
Date of Exercise: _______________ |
Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the
number of shares for the price set forth below.
Type of option (check one): | Incentive [ ] | Nonstatutory [ ] |
Stock option dated: | _____________________ | |
Number of shares as to which option is exercised: | _____________________ | |
Certificates to be issued in name of: | _____________________ | |
Total exercise price: | $____________________ | |
Cash payment delivered herewith: | $____________________ | |
Value of _____ shares of Chordiant Software, Inc. common stock delivered herewith1: |
$____________________ |
By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the 2005 Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the shares of Common Stock issued upon exercise of this option that occurs within two (2) years after the date of grant of this option or within one (1) year after such shares of Common Stock are issued upon exercise of this option.
Very truly yours,
1 Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, must have been owned for the minimum period required in the option, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate.
CHORDIANT SOFTWARE, INC.
STOCK OPTION GRANT NOTICE
(2005 EQUITY INCENTIVE PLAN)
Chordiant Software, Inc. (the "Company"), pursuant to its 2005 Equity
Incentive Plan (the "Plan"), hereby grants to Optionholder an option to
purchase the number of shares of the Company's Common Stock set forth below.
This option is subject to all of the terms and conditions as set forth herein
and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of
which are attached hereto and incorporated herein in their entirety.
Optionholder: | _____________________________________________ | |
Date of Grant: | _____________________________________________ | |
Vesting Commencement Date: | _____________________________________________ | |
Number of Shares Subject to Option: | _____________________________________________ | |
Exercise Price (Per Share): | _____________________________________________ | |
Total Exercise Price: | _____________________________________________ | |
Expiration Date: | _____________________________________________ |
Type of Grant: | Incentive Stock Option2 | Nonstatutory Stock Option |
[DRAFTING NOTE: Options that are exercisable by non-exempt employees (those subject to wage overtime rules) within six months after the date of grant may affect the calculations of overtime wages. Therefore, options granted to non-exempt employees should not be exercisable for at least six months from the grant date; provided, that the employees may exercise if their employment is terminated due to a change in control, their death or retirement.]
Exercise Schedule: |
Same as Vesting Schedule |
|
Vesting Schedule: |
[1/4th of the shares vest one year after the Vesting Commencement Date.1/48th of the shares vest monthly thereafter over the next three years.] |
|
Payment: |
By one or a combination of the following items (described in the Stock Option Agreement): [ ] By cash or check [ ] Pursuant to a Registration T Program if the Shares are publicly traded [ ] By delivery of already-owned shares if the Shares are publicly traded |
Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and understands and agrees
to, this Stock Option Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Stock
Option Grant Notice, the Stock Option Agreement and the Plan set forth the
entire understanding between Optionholder and the Company regarding the
acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted
and delivered to Optionholder under the Plan, and (ii) the following agreements
only:
OTHER AGREEMENTS: ___________________________________________________________
2 If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first Exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.
Chordiant Software, Inc. | Optionholder: | |
Signature |
______________________________ Signature |
|
Title:_________________________ | Date:__________________________ | |
Date:_________________________ |
ATTACHMENTS: Stock Option Agreement, 2005 Equity Incentive Plan, and Notice of Exercise