Exhibit 10.1
ART TECHNOLOGY GROUP, INC.
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
     1.      Purpose. The purpose of this Amended and Restated 1996 Stock Option
Plan (the “Plan”) of Art Technology Group, Inc., a Delaware corporation (the
“Company”), is to advance the interests of the Company’s stockholders by
enhancing the Company’s ability to attract, retain and motivate persons who are
expected to make important contributions to the Company and by providing such
persons with equity ownership opportunities and performance-based incentives
that are intended to better align their interests with those of the Company’s
stockholders. Except where the context otherwise requires, the term “Company”
shall include any of the Company’s present or future parent or subsidiary
corporations as defined in Section 424(e) or (f) of the Internal Revenue Code of
1986, as amended, and any regulations promulgated thereunder (the “Code”) and
any other business venture (including any joint venture or limited liability
company) in which the Company has a controlling interest, as determined by the
Board of Directors of the Company (the “Board”).
     2.      Eligibility. All of the Company’s employees, officers, directors,
consultants and advisors are eligible to receive options, stock appreciation
rights, restricted stock and other stock-based awards (each, an “Award”) under
the Plan. Each person who receives an Award under the Plan is deemed a
“Participant.”
     3.      Administration and Delegation.
             (a)      Administration by Board. The Plan will be administered by
the Board. The Board shall have authority to grant Awards and to adopt, amend
and repeal such administrative rules, guidelines and practices relating to the
Plan as it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect
(including the interpretation and implementation of Section 11(g)) and it shall
be the sole and final judge of such expediency. All decisions by the Board shall
be made in the Board’s sole discretion and shall be final and binding on all
persons having or claiming any interest in the Plan or in any Award. No director
or person acting pursuant to the authority delegated by the Board shall be
liable for any action or determination relating to or under the Plan made in
good faith.
             (b)      Appointment of Committees. To the extent permitted by
applicable law, the Board may delegate any or all of its powers under the Plan
to one or more committees or subcommittees of the Board (a “Committee”). All
references in the Plan to the “Board” shall mean the Board or a Committee of the
Board or the officers referred to in Section 3(c) to the extent that the Board’s
powers or authority under the Plan have been delegated to such Committee or
officers.
             (c)      Delegation to Officers. To the extent permitted by
applicable law, the Board may delegate to one or more officers of the Company
the power to grant Awards to employees or officers of the Company or any of its
present or future subsidiary corporations and

 

--------------------------------------------------------------------------------

 

to exercise such other powers under the Plan as the Board may determine,
provided that the Board shall fix the terms of the Awards to be granted by such
officers (including the exercise price of such Awards, which may include a
formula by which the exercise price will be determined) and the maximum number
of shares subject to Awards that the officers may grant; provided further that
no officer shall be authorized to grant Awards to any “executive officer” of the
Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) or to any “officer” of the Company (as defined by
Rule 16a-1 under the Exchange Act).
     4.      Stock Available for Awards.
             (a)      Number of Shares. Subject to adjustment under Section 9,
Awards may be made under the Plan for up to 25,600,000 shares of common stock,
$0.01 par value per share, of the Company (the “Common Stock”). If any Award
expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part (including as the result of shares
of Common Stock subject to such Award being repurchased by the Company at the
original issuance price pursuant to a contractual repurchase right) or results
in any Common Stock not being issued, the unused Common Stock covered by such
Award shall again be available for the grant of Awards under the Plan, subject,
however, in the case of Incentive Stock Options (as hereinafter defined), to any
limitations under the Code. Shares issued under the Plan may consist in whole or
in part of authorized but unissued shares or treasury shares. Solely for the
purpose of applying this limitation (and not for purposes of Section 4(b)
below), each Option (each as hereinafter defined) granted under this Plan shall
reduce the number of shares available for grant by one share for every one share
granted, each SAR (each as hereinafter defined) granted under this Plan shall
reduce the number of shares available for grant by one share for every one share
underlying the SAR, and each Award authorized under this Plan after April 5,
2007, other than an Option or SAR, shall reduce the number of shares available
by 1.24 shares for every one share granted.
             (b)      Section 162(m) Per-Participant Limit. Subject to
adjustment under Section 9, the maximum number of shares of Common Stock with
respect to which Awards may be granted to any Participant under the Plan shall
be 1,000,000 per calendar year. For purposes of the foregoing limit, the
combination of an Option in tandem with an SAR shall be treated as a single
Award. The per-Participant limit described in this Section 4(b) shall be
construed and applied consistently with Section 162(m) of the Code or any
successor provision thereto, and the regulations thereunder (“Section 162(m)”).
     5.      Stock Options.
             (a)      General. The Board may grant options to purchase Common
Stock (each, an “Option”) and determine the number of shares of Common Stock to
be covered by each Option, the exercise price of each Option and the conditions
and limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option that is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a “Nonstatutory Stock
Option.”

-2-

--------------------------------------------------------------------------------

 

             (b)      Incentive Stock Options. An Option that the Board intends
to be an “incentive stock option” as defined in Section 422 of the Code (an
“Incentive Stock Option”) shall only be granted to employees of Art Technology
Group, Inc., any of Art Technology Group, Inc.’s present or future parent or
subsidiary corporations as defined in Section 424(e) or (f) of the Code, and any
other entities the employees of which are eligible to receive Incentive Stock
Options under the Code, and shall be subject to and shall be construed
consistently with the requirements of Section 422 of the Code. The Company shall
have no liability to a Participant, or any other party, if an Option (or any
part thereof) that is intended to be an Incentive Stock Option is not an
Incentive Stock Option or for any action taken by the Board pursuant to
Section 10(f), including the conversion of an Incentive Stock Option to a
Nonstatutory Stock Option.
             (c)      Exercise Price. The Board shall establish the exercise
price of each Option and specify such exercise price in the applicable option
agreement, provided, however, that the exercise price of any Option shall not be
less than the fair market value per share of the Common Stock as of the date of
option grant.
             (d)      Duration of Options. Each Option shall be exercisable at
such times and subject to such terms and conditions as the Board may specify in
the applicable option agreement, provided, however, that no Option shall be
exercisable more than ten (10) years after the date the Option is granted.
             (e)      Exercise of Options. Options may be exercised by delivery
to the Company of a written notice of exercise signed by the proper person or by
any other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.
             (f)      Payment Upon Exercise. Common Stock purchased upon the
exercise of an Option granted under the Plan shall be paid for as follows:
                      (1)      in cash or by check, payable to the order of the
Company;
                      (2)      except as the Board may otherwise provide in an
option agreement, by (A) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required tax withholding or
(B) delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price and any required
tax withholding or (C) with the consent of the Board, by reducing the number of
shares of Common Stock otherwise issuable to the optionee upon exercise of the
Option by a number of shares of Common Stock having a fair market value equal to
such aggregate exercise price;
                      (3)      when the Common Stock is registered under the
Securities Exchange Act of 1934 (the “Exchange Act”), by delivery of shares of
Common Stock owned by the Participant valued at their fair market value as
determined by (or in a manner approved by) the Board (“Fair Market Value”),
provided (A) such method of payment is then permitted under applicable law,
(B) such Common Stock, if acquired directly from the Company, was owned by

-3-

--------------------------------------------------------------------------------

 

the Participant at least six months prior to such delivery and (C) such Common
Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other
similar requirements;
                      (4)      to the extent permitted by applicable law and by
the Board, by (A) delivery of a promissory note of the Participant to the
Company on terms determined by the Board, with the understanding that no loans
shall be made to directors or executive officers, or (B) payment of such other
lawful consideration as the Board may determine; or
                      (5)      by any combination of the above permitted forms
of payment.
             (g)      Substitute Options. In connection with a merger or
consolidation of an entity with the Company or the acquisition by the Company of
property or stock of an entity, the Board may grant Options in substitution for
any options or other stock or stock-based awards granted by such entity or an
affiliate thereof. Substitute Options may be granted on such terms as the Board
deems appropriate in the circumstances, notwithstanding any limitations on
Options contained in the other sections of this Section 5 or in Section 2.
             (h)      No Repricing of Options. Notwithstanding anything to the
contrary in the Plan, the Company shall not engage in any repricing of Options
or SARs granted under this Plan without further stockholder approval. For this
purpose, the term “repricing” shall mean any of the following or other action
that has the same effect: (i) lowering the exercise price of an Option or an SAR
after it is granted, (ii) any other actions that is treated as a repricing under
generally accepted accounting principles, or (iii) canceling an Option or an SAR
at a time when its exercise price exceeds the fair market value of the
underlying stock in exchange for another Option, SAR, restricted stock, or other
equity of the Company, unless the cancellation and exchange occurs in connection
with a merger, acquisition, spin-off, or similar corporate transaction
(including any adjustment described in Section 9).
     6.      Stock Appreciation Rights.
             (a)      Nature. A Stock Appreciation Right (“SAR”) is an Award
entitling the holder on exercise to receive an amount in cash or Common Stock or
a combination thereof (such form to be determined by the Board) determined in
whole or in part by reference to appreciation, from and after the date of grant,
in the fair market value of a share of Common Stock, provided, however, that the
exercise price of any SAR shall not be less than the fair market value per share
of the Common Stock as of the date of the SAR Award. The date as of which such
appreciation or other measure is determined shall be the exercise date unless
another date is specified by the Board in the SAR Award.
             (b)      Grants. SARs may be granted in tandem with, or
independently of, Options granted under the Plan.
                      (1)      Tandem Awards. When SARs are expressly granted in
tandem with Options: (A) the SAR will be exercisable only at such time or times,
and to the extent, that the related Option is exercisable and will be
exercisable in accordance with the procedure required for exercise of the
related Option; (B) the SAR will terminate and no longer be exercisable upon the
termination or exercise of the related Option, except that a SAR granted with
respect to less than the full number of shares covered by an Option will not be
reduced until

-4-

--------------------------------------------------------------------------------

 

the number of shares as to which the related Option has been exercised or has
terminated exceeds the number of shares not covered by the SAR; (C) the Option
will terminate and no longer be exercisable upon the exercise of the related
SAR; and (D) the SAR will be transferable only with the related Option.
                      (2)      Independent SARs. A SAR not expressly granted in
tandem with an Option will become exercisable at such time or times, and on such
conditions, as the Board may specify in the SAR Award.
             (c)      Exercise. A SAR may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person or other
form of notice (including electronic notice) approved by the Board, together
with any other documents required by the Board.
             (d)      Duration of SARs. No SAR shall be exercisable more than
ten (10) years after the date the SAR is granted.
     7.      Restricted Stock.
             (a)      Grants. The Board may grant Awards entitling recipients to
acquire shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares at their issue price or other stated or
formula price (or to require forfeiture of such shares if issued at no cost)
from the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a
“Restricted Stock Award”).
             (b)      Terms and Conditions. The Board shall determine the terms
and conditions of a Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any.
             (c)      Stock Certificates. Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or the Designated Beneficiary of such
Participant. For these purposes, a “Designated Beneficiary” of a Participant
shall be (1) a beneficiary designated by such Participant, in a manner
determined by the Board, to receive amounts due or exercise rights of such
Participant in the event of such Participant’s death or (2) in the absence of
such a designation, the Participant’s estate.
             (d)      Deferred Delivery of Shares. The Board may, at the time
any Restricted Stock Award is granted, provide that, at the time Common Stock
would otherwise be delivered pursuant to the Award, the Participant shall
instead receive an instrument evidencing the right to future delivery of Common
Stock at such time or times, and on such conditions, as the Board shall specify.
The Board may at any time accelerate the time at which delivery of all or any
part of the Common Stock shall take place.

-5-

--------------------------------------------------------------------------------

 

     8.      Other Stock-Based Awards. Other Awards of shares of Common Stock,
and other Awards that are valued in whole or in part by reference to, or are
otherwise based on, shares of Common Stock or other property, may be granted
under the Plan to Participants (“Other Stock Unit Awards”), including Awards
entitling recipients to receive shares of Common Stock to be delivered in the
future. Such Other Stock Unit Awards shall also be available as a form of
payment in the settlement of other Awards granted under the Plan or as payment
in lieu of compensation to which a Participant is otherwise entitled. Other
Stock Unit Awards may be paid in shares of Common Stock or cash, as the Board
shall determine. Subject to the provisions of the Plan, the Board shall
determine the conditions of each Other Stock Unit Awards, including any purchase
price applicable thereto. At the time any Award is granted, the Board may
provide that, at the time Common Stock would otherwise be delivered pursuant to
the Award, the Participant will instead receive an instrument evidencing the
Participant’s right to future delivery of the Common Stock.
     9.      Adjustments for Changes in Common Stock and Certain Other Events.
             (a)      Changes in Capitalization. In the event of any stock
split, reverse stock split, stock dividend, recapitalization, combination of
shares, reclassification of shares, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than an ordinary cash dividend, (1) the number and class of securities available
under the Plan, (2) the sub-limit set forth in Section 4(b), (3) the number and
class of securities and exercise price per share of each outstanding Option,
(4) the repurchase price per share subject to each outstanding Restricted Stock
Award and (5) the share- and per-share-related provisions of each outstanding
SAR and Other Stock Unit Award, shall be appropriately adjusted by the Company
(or substituted Awards may be made, if applicable) to the extent determined by
the Board.
             (b)      Reorganization Events.
                      (1)      Definition. A “Reorganization Event” shall mean:
(A) any merger or consolidation of the Company with or into another entity as a
result of which all of the Common Stock of the Company is converted into or
exchanged for the right to receive cash, securities or other property, (B) any
exchange of all of the Common Stock of the Company for cash, securities or other
property pursuant to a share exchange transaction or (C) any liquidation or
dissolution of the Company.
                      (2)      Consequences of a Reorganization Event on Awards
Other than Restricted Stock Awards. In connection with a Reorganization Event,
the Board shall have the authority to take, in its discretion, any of the
following actions as to all or any outstanding Awards on such terms as the Board
determines:
                      (A)      provide that Awards shall be assumed, or
substantially equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof);
                      (B)      upon written notice to a Participant, provide
that the Participant’s unexercised Options or other unexercised Awards shall
become exercisable

-6-

--------------------------------------------------------------------------------

 

in full and will terminate immediately prior to the consummation of such
Reorganization Event unless exercised by the Participant within a specified
period following the date of such notice;
                      (C)      provide that outstanding Awards shall become
realizable or deliverable, or restrictions applicable to an Award shall lapse,
in whole or in part prior to or upon such Reorganization Event;
                      (D)      in the event of a Reorganization Event under the
terms of which holders of Common Stock will receive upon consummation thereof a
cash payment for each share surrendered in the Reorganization Event (the
“Acquisition Price”), make or provide for a cash payment to a Participant equal
to (i) the Acquisition Price times the number of shares of Common Stock subject
to the Participant’s Options or other Awards (to the extent the exercise price
does not exceed the Acquisition Price) minus (ii) the aggregate exercise price
of all such outstanding Options or other Awards, in exchange for the termination
of such Options or other Awards;
                      (E)      provide that, in connection with a liquidation or
dissolution of the Company, Awards shall convert into the right to receive
liquidation proceeds (if applicable, net of the exercise price thereof); and
                      (F)      any combination of the foregoing.
     For purposes of clause (A) above, an Option shall be considered assumed if,
following consummation of the Reorganization Event, the Option confers the right
to purchase, for each share of Common Stock subject to the Option immediately
prior to the consummation of the Reorganization Event, the consideration
(whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock
held immediately prior to the consummation of the Reorganization Event (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares of Common Stock);
provided that if the consideration received as a result of the Reorganization
Event is not solely common stock of the acquiring or succeeding corporation (or
an affiliate thereof), the Company may, with the consent of the acquiring or
succeeding corporation, provide for the consideration to be received upon the
exercise of Options to consist solely of common stock of the acquiring or
succeeding corporation (or an affiliate thereof) equivalent in fair market value
to the per share consideration received by holders of outstanding shares of
Common Stock as a result of the Reorganization Event.
     To the extent all or any portion of an Option becomes exercisable solely as
a result of clause (B) above, the Board may provide that upon exercise of such
Option the Participant shall receive shares subject to a right of repurchase by
the Company or its successor at the Option exercise price; such repurchase right
(i) shall lapse at the same rate as the Option would have become exercisable
under its terms and (ii) shall not apply to any shares subject to the Option
that were exercisable under its terms without regard to clause (B) above.
                      (3)      Consequences of a Reorganization Event on
Restricted Stock Awards. Upon the occurrence of a Reorganization Event other
than a liquidation or dissolution

-7-

--------------------------------------------------------------------------------

 

of the Company, the repurchase and other rights of the Company under each
outstanding Restricted Stock Award shall inure to the benefit of the Company’s
successor and shall apply to the cash, securities or other property that the
Common Stock was converted into or exchanged for pursuant to such Reorganization
Event in the same manner and to the same extent as they applied to the Common
Stock subject to such Restricted Stock Award. Upon the occurrence of a
Reorganization Event involving the liquidation or dissolution of the Company,
except to the extent specifically provided to the contrary in the instrument
evidencing any Restricted Stock Award or any other agreement between a
Participant and the Company, all restrictions and conditions on all Restricted
Stock Awards then outstanding shall automatically be deemed terminated or
satisfied.
     10.     General Provisions Applicable to Awards.
             (a)      Transferability of Awards. Awards shall not be sold,
assigned, transferred, pledged or otherwise encumbered by the person to whom
they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution or, other than in the case of an Incentive
Stock Option, pursuant to a qualified domestic relations order, and, during the
life of the Participant, shall be exercisable only by the Participant.
References to a Participant, to the extent relevant in the context, shall
include references to authorized transferees.
             (b)      Documentation. Each Award shall be evidenced in such form
(written, electronic or otherwise) as the Board shall determine. Each Award may
contain terms and conditions in addition to those set forth in the Plan.
             (c)      Board Discretion. Except as otherwise provided by the
Plan, each Award may be made alone or in addition or in relation to any other
Award. The terms of each Award need not be identical, and the Board need not
treat Participants uniformly.
             (d)      Termination of Status. The Board shall determine the
effect on an Award of the disability, death, retirement, authorized leave of
absence or other change in the employment or other status of a Participant and
the extent to which, and the period during which, the Participant, or the
Participant’s legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award.
             (e)      Withholding. Each Participant shall pay to the Company, or
make provision satisfactory to the Company for payment of, any taxes required by
law to be withheld in connection with an Award to such Participant. Except as
the Board may otherwise provide in an Award, for so long as the Common Stock is
registered under the Exchange Act, Participants may satisfy such tax obligations
in whole or in part by delivery of shares of Common Stock, including shares
retained from the Award creating the tax obligation, valued at their Fair Market
Value; provided that the total tax withholding where stock is being used to
satisfy such tax obligations cannot exceed the Company’s minimum statutory
withholding obligations (based on minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes, that are applicable to
such supplemental taxable income). Shares surrendered to satisfy tax withholding
requirements cannot be subject to any repurchase, forfeiture, unfulfilled
vesting or

-8-

--------------------------------------------------------------------------------

 

other similar requirements. The Company may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to a
Participant.
             (f)      Amendment of Award. The Board may amend, modify or
terminate any outstanding Award, including changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant’s consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
             (g)     Conditions on Delivery of Stock. The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove restrictions from shares previously delivered under the Plan until
(1) all conditions of the Award have been met or removed to the satisfaction of
the Company, (2) in the opinion of the Company’s counsel, all other legal
matters in connection with the issuance and delivery of such shares have been
satisfied, including any applicable securities laws and any applicable stock
exchange or stock market rules and regulations, and (3) the Participant has
executed and delivered to the Company such representations or agreements as the
Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.
             (h)     Acceleration. The Board may at any time provide that any
Award shall become immediately exercisable in full or in part, free of some or
all restrictions or conditions, or otherwise realizable in full or in part, as
the case may be.
             (i)     Performance Conditions.
                      (1)      This Section 10(i) shall be administered by a
Committee approved by the Board, all of the members of which are “outside
directors” as defined by Section 162(m) (the “Section 162(m) Committee”).
                      (2)      Notwithstanding any other provision of the Plan,
if the Section 162(m) Committee determines at the time a Restricted Stock Award
or Other Stock Unit Award is granted to a Participant who is then an officer,
that such Participant is, or is likely to be as of the end of the tax year in
which the Company would claim a tax deduction in connection with such Award, a
Covered Employee (as defined in Section 162(m)), then the Section 162(m)
Committee may provide that this Section 10(i) is applicable to such Award.
                      (3)      If a Restricted Stock Award or Other Stock Unit
Award is subject to this Section 10(i), than the lapsing of restrictions thereon
and the distribution of cash or Shares pursuant thereto, as applicable, shall be
subject to the achievement of one or more objective performance goals
established by the Section 162(m) Committee, which:
                      (A)      shall be set by the Section 162(m) Committee
within the time period prescribed by, and shall otherwise comply with the
requirements of, Section 162(m);
                      (B)      shall be based on the attainment of specified
levels of one or any combination of the following: (i) earnings per share;
(ii) return on average equity or average assets with respect to a pre-determined
peer group; (iii) earnings; (iv) earnings

-9-

--------------------------------------------------------------------------------

 

growth; (v) revenues; (vi) expenses; (vii) stock price; (viii) market share;
(ix) return on sales, assets, equity or investment; (x) regulatory compliance;
(xi) improvement of financial ratings; (xii) achievement of balance sheet or
income statement objectives; (xiii) total shareholder return; (xiv) net
operating profit after tax; (xv)pre-tax or after-tax income; (xvi) cash flow; or
(xvii) such other objective goals as are established by the Board;
                      (C)      may be absolute in their terms or measured
against or in relationship to other companies comparably, similarly or otherwise
situated;
                      (D)      may be adjusted to exclude any one or more of
(i) extraordinary items, (ii) gains or losses on the dispositions of
discontinued operations, (iii) the cumulative effects of changes in accounting
principles, (iv) the writedown of any asset and (v) charges for restructuring
and rationalization programs; and
                      (E)      may vary by Participant and may be different for
different Awards.
                      (4)      Notwithstanding any provision of the Plan, with
respect to any Restricted Stock Award or Other Stock Unit Award that is subject
to this Section 10(i), the Section 162(m) Committee:
                      (A)      may adjust downwards, but not upwards, the cash
or number of Shares payable pursuant to such Award; and
                      (B)      may not waive the achievement of the applicable
performance goals except in the case of the death or disability of the
Participant.
                      (5)      The Section 162(m) Committee shall have the power
to impose such other restrictions on Awards subject to this Section 10(i) as it
may deem necessary or appropriate to ensure that such Awards satisfy all
requirements for “performance-based compensation” within the meaning of Section
162(m)(4)(C) of the Code, or any successor provision thereto.
     11.     Miscellaneous.
             (a)     No Right To Employment or Other Status. No person shall
have any claim or right to be granted an Award, and the grant of an Award shall
not be construed as giving a Participant the right to continued employment or
any other relationship with the Company. The Company expressly reserves the
right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as expressly
provided in the applicable Award.
             (b)     No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise

-10-

--------------------------------------------------------------------------------

 

price of and the number of shares subject to such Option are adjusted as of the
date of the distribution of the dividend (rather than as of the record date for
such dividend), then an optionee who exercises an Option between the record date
and the distribution date for such stock dividend shall be entitled to receive,
on the distribution date, the stock dividend with respect to the shares of
Common Stock acquired upon such Option exercise, notwithstanding the fact that
such shares were not outstanding as of the close of business on the record date
for such stock dividend.
             (c)     Effective Date and Term of Plan. The Plan shall become
effective on the date on which it is adopted by the Board, but no Award may be
granted unless and until the Plan has been approved by the Company’s
stockholders. No Awards shall be granted under the Plan after December 31, 2013,
but Awards previously granted may extend beyond that date.
             (d)     Amendment of Plan. The Board may amend, suspend or
terminate the Plan or any portion thereof at any time, provided that, to the
extent determined by the Board, no amendment requiring stockholder approval
under any applicable legal, regulatory or listing requirement shall become
effective until such stockholder approval is obtained. No Award shall be made
that is conditioned upon stockholder approval of any amendment to the Plan.
             (e)     Provisions for Foreign Participants. The Board may modify
Awards or Options granted to Participants who are foreign nationals or employed
outside the United States or establish subplans or procedures under the Plan to
recognize differences in laws, rules, regulations or customs of such foreign
jurisdictions with respect to tax, securities, currency, employee benefit or
other matters.
             (f)     Governing Law. The provisions of the Plan and all Awards
made hereunder shall be governed by and interpreted in accordance with the laws
of the State of Delaware, without regard to any applicable conflicts of law.
             (g)     Effect of Amendment. All Awards to Participants outstanding
as of the date of any amendment of the Plan shall continue in full force and
effect without modification by such amendment; provided that each reference in
any such Awards to a section of the Plan as in effect prior to any amendment
shall be deemed to refer to the corresponding section of the Plan as amended
unless the reference to such corresponding section would have an adverse impact
on the Participant holding the applicable Award.
             (h)     Construction. The headings of the Sections of the Plan are
included only for convenience and shall not affect the meaning or interpretation
of the Plan. Except as otherwise expressly provided, references herein to
Sections shall mean such Sections of the Plan. The word “including” as used in
the Plan shall not be construed so as to exclude any other thing not referred to
or described.

-11-

--------------------------------------------------------------------------------

 

Appendix A
FORM OF RESTRICTED STOCK UNIT AGREEMENT
(Time Based)
     AGREEMENT made as of the ___day of ___, 200_(the “Grant Date”), by and
between Art Technology Group, Inc., a Delaware Corporation (the “Company”), and
___(“you” or the “Grantee”).
W I T N E S S E T H:
     WHEREAS, the Board of Directors of the Company (the “Board”) and the
shareholders of the Company have approved the Company’s Amended and Restated
1996 Stock Option Plan (the “Plan”); and
     WHEREAS, the Compensation Committee of the Board (the “Committee”) (which
is authorized to administer the Plan) has decided to grant you an award of
restricted stock units as described herein pursuant to the Plan (the “Restricted
Stock Units”); and
     WHEREAS, the Restricted Stock Units are to be evidenced by an Agreement in
such form and containing such terms and conditions, as the Committee shall
determine;
     NOW, THEREFORE, it is mutually agreed as follows:
     1.      Grant. The Company hereby grants to you, on the terms and
conditions set forth herein, an aggregate of ___Restricted Stock Units subject
to, and in accordance with, the terms set forth in this Agreement.
     2.      Plan Controls. This Restricted Stock Unit award is and shall be
subject in every respect to the provisions of the Company’s Amended and Restated
1996 Stock Option Plan, as amended from time to time, which is incorporated
herein by reference and made a part hereof. The Grantee hereby accepts this
award subject to all the terms and provisions of the Plan and agrees that (a) in
the event of any conflict between the terms hereof and those of the Plan, the
latter shall prevail, and (b) all decisions under and interpretations of the
Plan by the Board or the Committee shall be final, binding and conclusive upon
the Holder and his or her heirs and legal representatives.
     3.      Vesting. The Restricted Stock Units shall be unvested as of the
Grant Date, and shall vest as follows, provided that you are employed by the
Company on each vesting date: (i) 25% of the Restricted Stock Unit award shall
vest upon the thirteenth month anniversary of the grant date (the “First Vesting
Date”) and (ii) an additional 25% shall vest upon each of the following one year
anniversaries of the First Vesting Date, so that the Restricted Stock Unit award
shall be fully vested after four years and one month; provided, however, that in
the event of a Change in Control, as defined at Exhibit A to Appendix B hereto,
an additional 25% of the unvested Restricted Stock Units shall vest.
     4.      Payment. Upon each vesting date, you shall receive one share of
Company Common Stock for each vested Restricted Stock Unit; provided, however,
that the number of

-12-

--------------------------------------------------------------------------------

 

shares you receive may be reduced by the number of shares sufficient to satisfy
the minimum tax withholding obligations as set forth in Section 5 below.
     5.      Withholding. Upon the settlement of Restricted Stock Units pursuant
to Section 4 above, the Company, in its discretion, shall either: (i) withhold
from issuance a number of shares sufficient to satisfy the minimum tax Federal,
state, local and/or payroll taxes of any kind required by law to be withheld
with regard to such settlement (“Minimum Withholding Obligation”); or
(ii) require that the Grantee satisfy such Minimum Withholding Obligation (1) by
a check payable to the Company, (2) with the consent of the Company by providing
irrevocable instructions to a broker to sell a number of shares equal in value
to the Minimum Withholding Obligation and pay the proceeds from such sale to the
Company, or (3) by such other means as may be agreed to by the Company.
     6.      Nontransferability. Unless the Committee specifically determines
otherwise, the Restricted Stock Units are personal to the Grantee and shall not
be transferable or assignable, other than by will or the laws of descent and
distribution, and any such purported transfer or assignment shall be null and
void.
     7.      Termination of Employment. Upon your termination of employment, for
any reason or no reason, with or without cause, all unvested Restricted Stock
Units shall immediately terminate and be of no further force or effect.
     Please indicate your understanding and acceptance of the foregoing by
signing and returning a copy of this Agreement.

            ART TECHNOLOGY GROUP, INC.
      By:                        

     I confirm my understanding of the foregoing and accept the Restricted Stock
Unit award described above subject to the terms and conditions described herein.
I hereby acknowledge receipt of a copy of the Plan, and agree that the terms of
this Restricted Stock Unit award shall be governed by the Plan.

     
 
   
 
   
[NAME OF GRANTEE]
   

-13-

--------------------------------------------------------------------------------

 

Exhibit A
“Change in Control” means an event or occurrence set forth in any one or more of
subsections (a) through (d) below (including an event or occurrence that
constitutes a Change in Control under one of such subsections but is
specifically exempted from another such subsection):
     (a) the acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended) (a “Person”) of beneficial ownership of any capital stock of Art
Technology Group, Inc. (“ATG”), after such acquisition, such Person beneficially
owns (within the meaning of Rule 13d-3 promulgated under such Act) 50% or more
of either (i) the then-outstanding shares of Common Stock (the “Outstanding
Common Stock”) or (ii) the combined voting power of the then-outstanding
securities of ATG entitled to vote generally in the election of directors (the
“Outstanding Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change in
Control:
(i) any acquisition directly from ATG (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for Common Stock or voting securities of ATG, unless the
Person exercising, converting or exchanging such security acquired such security
directly from ATG or an underwriter or agent of ATG);
(ii) any acquisition by ATG;
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by ATG or any corporation controlled by ATG, or
(iv) any acquisition by any corporation pursuant to a transaction that complies
with clauses (i) and (ii) of subsection (c) below;
     (b) the occurrence of a change in the composition of the Board of Directors
of ATG (the “Board”) such that the Continuing Directors do not constitute a
majority of the Board (or, if applicable, the Board of Directors of a successor
corporation to ATG), where the term “Continuing Director” means at any date a
member of the Board:
(i) who was a member of the Board on the effective date of this Policy or
(ii) who was nominated or elected subsequent to such date by at least a majority
of the directors who were Continuing Directors at the time of such nomination or
election or whose election to the Board was recommended or endorsed by at least
a majority of the directors who were Continuing Directors at the time of such
nomination or election; provided, however, that there shall be excluded from
this clause (ii) any individual whose initial assumption of office occurred as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents, by or on behalf of a person other than the Board;

-14-

--------------------------------------------------------------------------------

 

     (c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving ATG or a sale or other
disposition of all or substantially all of the assets of ATG in one or a series
of transactions (a “Business Combination”), unless, immediately following such
Business Combination, each of the following two conditions is satisfied:
(i) all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include a
corporation that as a result of such transaction owns ATG or substantially all
of ATG’s assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Common Stock
and Outstanding Voting Securities, respectively; and
(ii) no Person (excluding the Acquiring Corporation or any employee benefit plan
(or related trust) maintained or sponsored by ATG or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 30% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination); or
(d) approval by the stockholders of ATG of a complete liquidation or dissolution
of ATG.

-15-

--------------------------------------------------------------------------------

 

Appendix B
FORM OF RESTRICTED STOCK AGREEMENT
     AGREEMENT made as of the             of           , 200     (the “Grant
Date”), by and between Art Technology Group, Inc., a Delaware Corporation (the
“Company”), and (“you” or the “Grantee”).
W I T N E S S E T H :
     WHEREAS, the Board of Directors of the Company (the “Board”) and the
shareholders of the Company have approved the Company’s Amended and Restated
1996 Stock Option Plan (the “Plan”); and
     WHEREAS, the Board of Directors (the “Board”) at the recommendation of the
Compensation Committee of the Board, granted you an award of restricted stock as
described herein pursuant to the Plan (the “Restricted Stock”); and
     WHEREAS, the Restricted Stock is to be evidenced by an Agreement in such
form and containing such terms and conditions, as the Committee shall determine;
     NOW, THEREFORE, it is mutually agreed as follows:
     1. Grant. The Company hereby grant to you on            (the “Grant Date”),
on the terms and conditions set forth herein, an aggregate of
               shares of Restricted Stock, subject to and in accordance with,
the terms set forth in this Agreement.
     2. Plan Controls, This Restricted Stock award is and shall be subject in
every respect to the provisions of the Plan, as amended from time to time, which
is incorporated herein by reference and made a part hereof. The Grantee hereby
accepts this award subject to all the terms and provisions of the Plan and
agrees that (a) in the event of any conflict between the terms hereof and those
of the Plan, the latter shall prevail, and (b) all decisions under and
interpretations of the Plan by the Board or the Committee shall be final,
binding and conclusive upon the Holder and his or her heirs and legal
representatives.
     3. Vesting. The Restricted Stock shall vest as follows:
                              .
     4. Payment. Upon the vesting date, you shall receive one share of Company
Common Stock for each share of Restricted Stock; provided, however, that the
number of shares you receive may be reduced by the number of shares sufficient
to satisfy the minimum tax withholding obligations as set forth in Section 5
below.
     5. Withholding. Upon the settlement of Restricted Stock pursuant to
Section 4 above, the Company, in its discretion, shall either: (i) withhold from
issuance a number of shares sufficient to satisfy the minimum tax Federal,
state, local and/or payroll taxes of any kind required by law to be withheld
with regard to such settlement

-16-

--------------------------------------------------------------------------------

 

(“Minimum Withholding Obligation”); or (ii) require that the Grantee satisfy
such Minimum Withholding Obligation (1) by a check payable to the Company,
(2) with the consent of the Company by providing irrevocable instructions to a
broker to sell a number of shares equal in value to the Minimum Withholding
Obligation and pay the proceeds from such sale to the Company, or (3) by such
other means as may be agreed to by the Company.
     6. Nontransferability. Unless the Committee specifically determines
otherwise, the shares of Restricted Stock are personal to the Grantee and shall
not be transferable or assignable, other than by will or the laws of descent and
distribution, and any such purported transfer or assignment shall be null and
void.
     Please indicate your understanding and acceptance of the foregoing by
signing and returning a copy of this Agreement.

            ART TECHNOLOGY GROUP, INC.
           

           
 
    By:                        

     I confirm my understanding of the foregoing and accept the Restricted Stock
award described above subject to the terms and conditions described herein. I
hereby acknowledge receipt of a copy of the Plan, and agree that the terms of
this Restricted Stock Unit award shall be governed by the Plan.
[NAME]

-17-