EXHIBIT 10.6
FORM OF RESTRICTED STOCK UNIT AGREEMENT
CALLIDUS SOFTWARE INC.
RESTRICTED STOCK UNIT AGREEMENT
[(New Employee)] or [(Existing Employee)]
     This Restricted Stock Unit Agreement (the “Agreement”), is made and entered
into between CALLIDUS SOFTWARE INC., a Delaware corporation (the “Company”) and
                     (“Recipient”) residing at the above address. This award is
granted under the Company’s 2003 Stock Incentive Plan (as amended, the “Plan”).
Terms used but not defined herein have the meaning set forth in the Plan.
     1. Notice of Grant
     Recipient has been granted restricted stock units representing shares of
Common Stock of the Company (the “RSUs”), subject to the terms and conditions of
this Agreement, as follows:

         
 
       
Grant Number
       
 
       
 
       
Grant Date
       
 
       
 
       
Total Number of RSUs Granted
       
 
       
 
       
First Vesting Date
       
 
       

     2. Vesting Schedule [New Employee — See Vesting Schedule for Existing
Employees below]
     (a) The RSUs shall become vested in nine (9) installments. The first
installment shall occur on the First Vesting Date set forth above and will be
equal to one-third (1/3rd) of the Total Number of RSUs Granted. Thereafter, the
remaining unvested RSUs will vest in equal quarterly installments of one-twelfth
(1/12th) of the Total Number of RSUs Granted on the last calendar day of the
applicable month of the quarter, commencing after the First Vesting Date,
subject at each vesting date to Recipient’s continuing to be a Service Provider
on each such date.
     For example, if the First Vesting Date was October 31st, then 1/3rd of the
Total Number of RSUs Granted would vest on that date and the remaining unvested
RSUs will vest in equal quarterly installments of 1/12th of the Total Number of
RSUs Granted on each January 31st, April 30th, July 31st, and the following
October 31st until the grant is fully vested.

 

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[End Vesting Schedule for New Employees]
[Vesting Schedule for Existing Employees]
     The RSUs shall become vested in 12 equal quarterly installments on the last
calendar day of the applicable month of the quarter, commencing on the First
Vesting Date (as set forth above), subject to Recipient’s continuing to be a
Service Provider on each such date.
     For example, if the First Vesting Date was October 31st, then 1/12th of the
RSU shares granted would vest on that date with the remaining quarterly
installments vesting 1/12th on each January 31st, April 30th, July 31st, and the
following October 31st until the award is fully vested.
[End Vesting Schedule for Existing Employees]
     (b) If Recipient’s service as a Service Provider terminates for any reason,
then all RSUs that have not vested on or before the date of termination of
employment shall automatically be forfeited and all of Recipient’s rights with
respect thereto shall cease immediately upon such termination.
     3. Conversion into Common Stock. Shares of Common Stock will be issued as
soon as practicable following vesting of the RSUs. As a condition to such
issuance, Recipient shall have satisfied his or her tax withholding obligations
as specified in this Agreement and shall have completed, signed and returned any
documents and taken any additional action that the Company deems appropriate to
enable it to accomplish the delivery of the shares of Common Stock. In no event
will the Company be obligated to issue a fractional share. Notwithstanding the
foregoing, (i) the Company shall not be obligated to deliver any shares of the
Common Stock during any period when the Company determines that the conversion
of a RSU or the delivery of shares hereunder would violate any federal, state or
other applicable laws and/or may issue shares subject to any restrictive legends
that, as determined by the Company’s counsel, is necessary to comply with
securities or other regulatory requirements, and (ii) the date on which shares
are issued may include a delay in order to provide the Company such time as it
determines appropriate to address tax withholding and other administrative
matters.
     4. Tax Treatment. Any withholding tax liabilities (whether as a result of
federal, state or other law and whether for the payment and satisfaction of any
income tax, social security tax, payroll tax, or payment on account of other tax
related to withholding obligations that arise by reason of the RSUs) incurred in
connection with the RSUs becoming vested and shares of Common Stock issued, or
otherwise incurred in connection with the RSUs, may be satisfied in any of the
following manners determined by the Company: (i) by the Company withholding a
number of shares of Common Stock that would otherwise be issued under the RSUs
that the Company determines have a fair market value approximately equal to the
minimum amount of taxes that the Company concludes it is required to withhold
under applicable law; (ii) by payment by Recipient to the Company in cash or by
check an amount equal to the minimum amount of taxes that

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the Company concludes it is required to withhold under applicable law (which
amount shall be due within one business day of the day the tax event arises
unless otherwise determined by the Company); or (iii) by the sale of a number of
shares of Common Stock that are issued under the RSUs, which the Company
determines is sufficient to generate an amount that meets the tax withholding
obligations plus additional shares to account for rounding and market
fluctuations, and payment of such tax withholding to the Company, provided that
such shares may be sold as part of a block trade with other participants of the
Plan. Recipient hereby authorizes the Company to withhold such tax withholding
amount from any amounts owing to Recipient to the Company and to take any action
necessary in accordance with this paragraph.
     Notwithstanding the foregoing, Recipient acknowledges and agrees that he is
responsible for all taxes that arise in connection with the RSUs becoming vested
and shares of Common Stock being issued or otherwise incurred in connection with
the RSUs, regardless of any action the Company takes pursuant to this Section.
     5. Restrictions on Transfer. Recipient may not sell, transfer, pledge or
otherwise dispose of any of the RSUs, and Recipient may not sell, transfer,
pledge or otherwise of any of the shares of Common Stock issuable hereunder
until after the applicable shares have been issued on the schedule set forth
above. Recipient further agrees not to sell, transfer or otherwise dispose of
any shares at a time when applicable laws or Company policies prohibit a sale,
transfer or other disposition. Recipient agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop transfer” instructions to its transfer agent. The Company
shall not be required (i) to transfer on its books any RSUs or shares that have
been sold or otherwise transferred in violation of any of the provisions of this
Agreement or (ii) to treat as owner of such shares or to accord the right to
vote or pay dividends to any purchaser or other transferee to whom such shares
shall have been so transferred.
     6. Stock Certificates. Certificates evidencing the shares of Common Stock
issuable upon vesting of the RSUs shall be issued by the Company and registered
in the name of Recipient on the stock transfer books of the Company. Unless
otherwise determined by the Administrator, such certificates shall remain in the
physical custody of the Company or its designee at all times until the
applicable shares have become vested and non-forfeitable. At the election of the
Company, such shares may be in electronic form and such issuance may be effected
by crediting shares in an account established on your half with a brokerage firm
or other custodian, as determined by the Company.
     7. Stockholder Rights. Recipient will have rights of a stockholder only
after shares of Common Stock have been issued to Recipient following vesting of
the RSUs and satisfaction of all other conditions to the issuance of those
shares as set forth in this Agreement. RSUs shall not entitle Recipient to any
rights of a stockholder of Common Stock, except as otherwise determined by the
Board.
     8. No Employment or Retention Rights. The RSUs and this Agreement do not
give Recipient the right to be retained by the Company or a subsidiary of the
Company in any capacity. The Company and its subsidiaries reserve the right to
terminate Recipient’s

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service at any time, with or without cause. The grant of RSUs to an individual
in any one year, or at any time, does not obligate the Company or any subsidiary
to make a grant in any future year or in any given amount and should not create
an expectation that the Company or any subsidiary might make a grant in any
future year or in any given amount. Neither this Agreement nor any RSU is an
employment or service contract. RSUs are not part of your contract (if any) with
the Company, your normal or expected compensation, or other remuneration for any
purposes, including for purposes of computing severance pay or other termination
compensation or indemnity.
     9. Adjustments. In the event of a stock split, a stock dividend or a
similar change in Company stock, the number of shares covered by this Agreement
shall be adjusted pursuant to the Plan.
     10. Applicable Law. This Agreement will be interpreted and enforced under
the laws of the State of California (without regard to their choice-of-law
provisions).
     11. Data Privacy.
     (a) You explicitly and unambiguously consent to the collection, use and
transfer, in electronic or other form, of your personal data as described in
this document by the Company for the exclusive purpose of implementing,
administering and managing your participation in the Plan.
     (b) You hereby understand that the Company holds certain personal
information about you, including, but not limited to, your name, home address
and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all RSUs or any other entitlement
to shares of stock awarded, canceled, exercised, vested, unvested or outstanding
in your favor, for the purpose of implementing, administering and managing the
Plan (“Data”). You hereby understand that Data may be transferred to any third
parties assisting in the implementation, administration and management of the
Plan, that these recipients may be located in your country or elsewhere, and
that the recipient’s country may have different data privacy laws and
protections than your country. You hereby understand that you may request a list
with the names and addresses of any potential recipients of the Data by
contacting your local human resources representative. You authorize the
recipients to receive, possess, use, retain and transfer the Data, in electronic
or other form, for the purposes of implementing, administering and managing your
participation in the Plan, including any requisite transfer of such Data as may
be required to a broker or other third party with whom you may elect to deposit
any shares of Common Stock acquired under your RSUs. You hereby understand that
Data will be held only as long as is necessary to implement, administer and
manage your participation in the Plan. You hereby understand that you may, at
any time, view Data, request additional information about the storage and
processing of Data, require any necessary amendments to Data or refuse or
withdraw the consents herein, in any case without cost, by contacting in writing
your local human

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resources representative. You hereby understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you hereby understand that you may contact the human resources
representative responsible for your country at the local or regional level.
     12. The Plan and Other Agreements. The Plan is incorporated in this
Agreement by reference. The Plan and this Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Recipient with respect to the subject matter hereof, and may not be materially
modified adversely to the Recipient’s interest except by means of a writing
signed by the Company and Recipient.
     Recipient hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under this Agreement. Recipient further agrees to notify the Company upon any
change in the residence address indicated below.

         
RECIPIENT:
  CALLIDUS SOFTWARE INC.    
 
       
 
       
Signature
  By:    
 
       
 
       
Print Name
  Title    
 
       
 
       
 
       
 
       
Residence Address
       

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