Exhibit 10.7

TIBCO SOFTWARE INC.

1998 DIRECTOR OPTION PLAN

DIRECTOR OPTION AGREEMENT

 

I. NOTICE OF STOCK OPTION GRANT

Optionee Name:

You have been granted an option to purchase Common Stock of TIBCO Software Inc.,
subject to the terms and conditions of the 1998 Director Option Plan and this
Option Agreement, as follows:

 

Grant Number

     ______

Date of Grant

     ______

Vesting Commencement Date

     ______

Exercise Price per Share

     ______

Total Number of Shares Granted

     ______

Total Exercise Price

     ______

Type of Option

     ______

Term/Expiration Date

     ______

Vesting Schedule:

This Option may be exercised, in whole or in part, in accordance with the
following schedule:

1. 1/3 of the Shares subject to the Option shall vest on the earlier of (i) the
first annual meeting of stockholders of TIBCO Software Inc. that occurs after
the Vesting Commencement Date; or (ii) the first anniversary of the Vesting
Commencement Date, subject, in either case, to the Optionee continuing to be a
Director on such date.

2. 1/3 of the Shares subject to the Option shall vest on the earlier of (i) the
second annual meeting of stockholders of TIBCO Software Inc. that occurs after
the Vesting Commencement Date; or (ii) the second anniversary of the Vesting
Commencement Date, subject, in either case, to the Optionee continuing to be a
Director on such date.

3. 1/3 of the Shares subject to the Option shall vest on the earlier of (i) the
third annual meeting of stockholders of TIBCO Software Inc. that occurs after
the Vesting Commencement Date; or (ii) the third anniversary of the Vesting
Commencement Date, subject, in either case, to the Optionee continuing to be a
Director on such date.

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

II. AGREEMENT

TIBCO Software Inc. (the “Company”) has granted to                          (the
“Optionee”), an option to purchase a total of                          shares of
the Company’s Common Stock (the “Optioned Stock”), at the price determined as
provided herein, and in all respects subject to the terms, definitions and
provisions of the Company’s 1998 Director Option Plan (the “Plan”) adopted by
the Company and which is incorporated herein by reference. The terms defined in
the Plan shall have the same defined meanings herein.

1. Nature of the Option. This Option is a non-statutory option and is not
intended to qualify for any special tax benefits to the Optionee.

2. Exercise Price. The exercise price is $             for each Share of Common
Stock.

3. Exercise of Option. This Option shall be exercisable during its term in
accordance with the provisions of Section 9 of the Plan as follows:

(i) Right to Exercise.

(a) This Option shall become exercisable in accordance with the Vesting Schedule
set out in the Notice of Stock Option Grant.

(b) This Option may not be exercised for a fraction of a share.

(c) In the event of Optionee’s death, disability or other termination of service
as a Director, the exercisability of the Option is governed by Section 9 of the
Plan.

(ii) Method of Exercise. This Option shall be exercisable by written notice
which shall state the election to exercise the Option and the number of Shares
in respect of which the Option is being exercised. Such written notice, in the
form attached hereto as Exhibit A, shall be signed by the Optionee and shall be
delivered in person or by certified mail to Shareholder Services. The written
notice shall be accompanied by payment of the exercise price.

4. Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

(i) cash; or

(ii) check; or

(iii) to the extent permitted by the Administrator, surrender of other Shares
which (a) in the case of Shares acquired upon exercise of an option, have been
owned by the Optionee for more than six (6) months on the date of surrender, and
(b) have a Fair Market Value on the date of surrender equal to the aggregate
Exercise Price of the Exercised Shares; or

 

2

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

(iv) to the extent permitted by the Administrator, delivery of a properly
executed exercise notice together with such other documentation as the Company
and the broker, if applicable, shall require to effect an exercise of the Option
and delivery to the Company of the aggregate sale proceeds required to pay the
Exercise Price (i.e., a “cashless exercise*,” also referred to as a “same day
sale”).

5. Restrictions on Exercise. This Option may not be exercised if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulations, or if such issuance would not comply
with the requirements of any stock exchange upon which the Shares may then be
listed. As a condition to the exercise of this Option, the Company may require
Optionee to make any representation and warranty to the Company as may be
required by any applicable law or regulation.

6. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by the Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

7. Term of Option. This Option may not be exercised more than seven (7) years
from the date of grant of this Option, and may be exercised during such period
only in accordance with the Plan and the terms of this Option.

8. Taxation Upon Exercise of Option. Optionee understands that, upon exercise of
this Option, he or she will recognize income for tax purposes in an amount equal
to the excess of the then Fair Market Value of the Shares purchased over the
exercise price paid for such Shares. Since the Optionee is subject to
Section 16(b) of the Securities Exchange Act of 1934, as amended, under certain
limited circumstances the measurement and timing of such income (and the
commencement of any capital gain holding period) may be deferred, and the
Optionee is advised to contact a tax advisor concerning the application of
Section 83 in general and the availability of a Section 83(b) election in
particular in connection with the exercise of the Option. Upon a resale of such
Shares by the Optionee, any difference between the sale price and the Fair
Market Value of the Shares on the date of exercise of the Option, to the extent
not included in income as described above, will be treated as capital gain or
loss.

9. Lock-Up Period. Optionee hereby agrees that, if so requested by the Company
or any representative of the underwriters (the “Managing Underwriter”) in
connection with any registration of the offering of any securities of the
Company under

 

* Under a “cashless exercise” program, an optionee exercising a stock option
requests that the exercise price and any required tax withholding be paid by his
or her broker. The broker sends that amount to the company and sends the
remaining proceeds from the sale of the shares purchased upon the option
exercise (less any commissions and fees) directly to the optionee.

 

3

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

the Securities Act of 1933, as amended (the “Securities Act”), Optionee shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period (or such other period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company) (the
“Market Standoff Period”) following the effective date of a registration
statement of the Company filed under the Securities Act. Such restriction shall
apply to the registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

DATE OF GRANT:

 

TIBCO Software Inc.,

a Delaware corporation

By    

Name:

 

Title:

 

Optionee acknowledges receipt of a copy of the Plan, a copy of which is attached
hereto, and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board upon any questions arising
under the Plan.

Dated:                             

   Optionee Name:

 

4