Exhibit 10.3

eGAIN CORPORATION

AMENDED AND RESTATED 2005 MANAGEMENT STOCK OPTION PLAN

(Initially Adopted by the Board of Directors on May 27, 2005)

Table of Contents

 

 

  

Page

SECTION 1. ESTABLISHMENT AND PURPOSE.

  

1

 

 

 

SECTION 2. DEFINITIONS.

  

1

 

 

 

 

 

(a)

  

“Affiliate”

  

1

 

 

 

 

 

 

 

 

 

(b)

  

“Award”

  

1

 

 

 

 

 

 

 

 

 

(c)

  

“Board of Directors”

  

1

 

 

 

 

 

 

 

 

 

(d)

  

“Change in Control”

  

1

 

 

 

 

 

 

 

 

 

(e)

  

“Code”

  

2

 

 

 

 

 

 

 

 

 

(f)

  

“Committee”

  

2

 

 

 

 

 

 

 

 

 

(g)

  

“Company”

  

2

 

 

 

 

 

 

 

 

 

(h)

  

“Exchange Act”

  

2

 

 

 

 

 

 

 

 

 

(i)

  

“Exercise Price”

  

2

 

 

 

 

 

 

 

 

 

(j)

  

“Fair Market Value”

  

2

 

 

 

 

 

 

 

 

 

(k)

  

“Nonstatutory Option” or “NSO”

  

2

 

 

 

 

 

 

 

 

 

(l)

  

“Officer”

  

2

 

 

 

 

 

 

 

 

 

(m)

  

“Option”

  

2

 

 

 

 

 

 

 

 

 

(n)

  

“Optionee”

  

2

 

 

 

 

 

 

 

 

 

(o)

  

“Parent”

  

2

 

 

 

 

 

 

 

 

 

(p)

  

“Participant”

  

2

 

 

 

 

 

 

 

 

 

(q)

  

“Plan”

  

2

 

 

 

 

 

 

 

 

 

(r)

  

“Service”

  

2

 

 

 

 

 

 

 

 

 

(s)

  

“Share”

  

3

 

 

 

 

 

 

 

 

 

(t)

  

“Stock”

  

3

 

 

 

 

 

 

 

 

 

(u)

  

“Stock Option Agreement”

  

3

 

 

 

 

 

 

 

 

 

(v)

  

“Subsidiary”

  

3

 

 

 

 

 

 

 

SECTION 3. ADMINISTRATION

  

3

 

 

 

 

 

(a)

  

Committee Composition

  

3

 

 

 

 

 

 

 

 

 

(b)

  

Committee Procedures

  

3

 

 

 

 

 

 

 

 

 

(c)

  

Committee Responsibilities

  

3

 

 

 

 

 

 

 

 

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Page

SECTION 4. ELIGIBILITY

  

4

 

 

 

 

 

(a)

  

General Rule

  

4

 

 

 

 

 

 

 

SECTION 5. STOCK SUBJECT TO PLAN

  

4

 

 

 

 

 

(a)

  

Basic Limitation

  

4

 

 

 

 

 

 

 

 

 

(b)

  

Award Limitation

  

4

 

 

 

 

 

 

 

 

 

(c)

  

Additional Shares

  

4

 

 

 

 

 

 

 

SECTION 6. TERMS AND CONDITIONS OF OPTIONS

  

4

 

 

 

 

 

(a)

  

Stock Option Agreement

  

4

 

 

 

 

 

 

 

 

 

(b)

  

Number of Shares

  

4

 

 

 

 

 

 

 

 

 

(c)

  

Exercise Price

  

4

 

 

 

 

 

 

 

 

 

(d)

  

Withholding Taxes

  

4

 

 

 

 

 

 

 

 

 

(e)

  

Exercisability and Term

  

4

 

 

 

 

 

 

 

 

 

(f)

  

Exercise of Options Upon Termination of Service

  

5

 

 

 

 

 

 

 

 

 

(g)

  

Effect of Change in Control

  

5

 

 

 

 

 

 

 

 

 

(h)

  

Leaves of Absence

  

5

 

 

 

 

 

 

 

 

 

(i)

  

No Rights as a Stockholder

  

5

 

 

 

 

 

 

 

 

 

(j)

  

Modification, Extension and Renewal of Options

  

5

 

 

 

 

 

 

 

 

 

(k)

  

Restrictions on Transfer of Shares

  

5

 

 

 

 

 

 

 

 

 

(l)

  

Buyout Provisions

  

5

 

 

 

 

 

 

 

SECTION 7. PAYMENT FOR SHARES

  

5

 

 

 

 

 

(a)

  

General Rule

  

5

 

 

 

 

 

 

 

 

 

(b)

  

Surrender of Stock

  

5

 

 

 

 

 

 

 

 

 

(c)

  

Services Rendered

  

5

 

 

 

 

 

 

 

 

 

(d)

  

Cashless Exercise

  

6

 

 

 

 

 

 

 

 

 

(e)

  

Exercise/Pledge

  

6

 

 

 

 

 

 

 

 

 

(f)

  

Promissory Note

  

6

 

 

 

 

 

 

 

 

 

(g)

  

Other Forms of Payment

  

6

 

 

 

 

 

 

 

 

 

(h)

  

Limitations under Applicable Law

  

6

 

 

 

 

 

 

 

SECTION 8. ADJUSTMENT OF SHARES

  

6

 

 

 

 

 

(a)

  

Adjustments

  

6

 

 

 

 

 

 

 

 

 

(b)

  

Dissolution or Liquidation

  

6

 

 

 

 

 

 

 

 

 

(c)

  

Reorganizations

  

6

 

 

 

 

 

 

 

 

 

(d)

  

Reservation of Rights

  

6

 

 

 

 

 

 

 

 

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Page

SECTION 9. DEFERRAL OF AWARDS

  

7

 

 

 

 

 

(a)

  

Committee Powers

  

7

 

 

 

 

 

 

 

 

 

(b)

  

General Rules

  

7

 

 

 

 

 

 

 

SECTION 10. AWARDS UNDER OTHER PLANS

  

7

 

 

 

SECTION 11. LEGAL AND REGULATORY REQUIREMENTS

  

7

 

 

 

SECTION 12. WITHHOLDING TAXES

  

7

 

 

 

 

 

(a)

  

General

  

7

 

 

 

 

 

 

 

 

 

(b)

  

Share Withholding

  

7

 

 

 

 

 

 

 

SECTION 13. OTHER PROVISIONS APPLICABLE TO AWARDS

  

7

 

 

 

 

 

(a)

  

Transferability

  

7

 

 

 

 

 

 

 

 

 

(b)

  

Qualifying Performance Criteria

  

8

 

 

 

 

 

 

 

SECTION 14. NO EMPLOYMENT RIGHTS

  

8

 

 

 

SECTION 15. DURATION AND AMENDMENTS

  

8

 

 

 

 

 

(a)

  

Term of the Plan

  

8

 

 

 

 

 

 

 

 

 

(b)

  

Right to Amend or Terminate the Plan

  

8

 

 

 

 

 

 

 

 

 

(c)

  

Effect of Termination

  

8

 

 

 

 

 

 

 

SECTION 16. EXECUTION

  

8

 

 

 

 

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eGAIN CORPORATION

AMENDED AND RESTATED 2005 MANAGEMENT STOCK OPTION PLAN

SECTION 1. ESTABLISHMENT AND PURPOSE.

The Plan was adopted by the Board of Directors effective May 27, 2005 (the
“Effective Date”) , and most recently amended on August 29, 2014. The purpose of
the Plan is to promote the long-term success of the Company and the creation of
stockholder value by (a) encouraging Officers of the Company to focus on
critical long-range objectives, (b) encouraging the retention of Officers with
exceptional qualifications and (c) linking Officers directly to stockholder
interests through increased stock ownership. The Plan seeks to achieve this
purpose by providing for Awards in the form of options.

SECTION 2. DEFINITIONS.

(a) “Affiliate” shall mean any entity other than a Subsidiary, if the Company
and/or one of more Subsidiaries own not less than 50% of such entity.

(b) “Award” shall mean any award of an Option under the Plan.

(c) “Board of Directors” shall mean the Board of Directors of the Company, as
constituted from time to time.

(d) “Change in Control” shall mean the occurrence of any of the following
events:

(i) A change in the composition of the Board of Directors occurs, as a result of
which fewer than one-half of the incumbent directors are directors who either:

(A) Had been directors of the Company on the “look-back date” (as defined below)
(the “original directors”); or

(B) Were elected, or nominated for election, to the Board of Directors with the
affirmative votes of at least a majority of the aggregate of the original
directors who were still in office at the time of the election or nomination and
the directors whose election or nomination was previously so approved (the
“continuing directors”); or

(ii) Any “person” (as defined below) who by the acquisition or aggregation of
securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the “Base
Capital Stock”); except that any change in the relative beneficial ownership of
the Company’s securities by any person resulting solely from a reduction in the
aggregate number of outstanding shares of Base Capital Stock, and any decrease
thereafter in such person’s ownership of securities, shall be disregarded until
such person increases in any manner, directly or indirectly, such person’s
beneficial ownership of any securities of the Company; or

(iii) The consummation of a merger or consolidation of the Company with or into
another entity or any other corporate reorganization, if persons who were not
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization own immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding securities of
each of (A) the continuing or surviving entity and (B) any direct or indirect
parent corporation of such continuing or surviving entity; or

(iv) The sale, transfer or other disposition of all or substantially all of the
Company’s assets.

For purposes of subsection (d)(i) above, the term “look-back” date shall mean
the later of (1) the Effective Date or (2) the date 24 months prior to the date
of the event that may constitute a Change in Control.

For purposes of subsection (d)(ii)) above, the term “person” shall have the same
meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but shall
exclude (1) a trustee or other fiduciary holding securities under an employee
benefit plan maintained by the Company or a Parent or Subsidiary and (2) a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the Stock.

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Any other provision of this Section 2(d) notwithstanding, a transaction shall
not constitute a Change in Control if its sole purpose is to change the state of
the Company’s incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction, and a Change in Control shall
not be deemed to occur if the Company files a registration statement with the
Securities and Exchange Commission for the initial offering of Stock to the
public.

(e) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(f) “Committee” shall mean the Compensation Committee as designated by the Board
of Directors, which is authorized to administer the Plan, as described in
Section 3 hereof.

(g) “Company” shall mean eGain Corporation, a Delaware corporation.

(h) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(i) “Exercise Price” shall mean the amount for which one Share may be purchased
upon exercise of such Option, as specified in the applicable Stock Option
Agreement.

(j) “Fair Market Value” with respect to a Share, shall mean the market price of
one Share, determined by the Committee as follows:

(i) If the Stock was traded over-the-counter on the date in question but was not
traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to
the last transaction price quoted for such date by the OTC Bulletin Board or, if
not so quoted, shall be equal to the mean between the last reported
representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which the Stock is quoted or, if the
Stock is not quoted on any such system, by the Pink Sheets LLC;

(ii) If the Stock was traded on The Nasdaq Stock Market, then the Fair Market
Value shall be equal to the last reported sale price quoted for such date by The
Nasdaq Stock Market;

(iii) If the Stock was traded on a United States stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing price
reported for such date by the applicable composite-transactions report; and

(iv) If none of the foregoing provisions is applicable, then the Fair Market
Value shall be determined by the Committee in good faith on such basis as it
deems appropriate. In all cases, the determination of Fair Market Value by the
Committee shall be conclusive and binding on all persons.

(k) “Nonstatutory Option” or “NSO” shall mean an employee stock option that is
not an employee incentive stock option described in Section 422 of the Code.

(l) “Officer” shall mean any individual who is a common-law employee who are
directors, officers or other key employees of the Company as approved by the
Company’s Board of Directors.

(m) “Option” shall mean a Nonstatutory Option granted under the Plan and
entitling the holder to purchase Shares.

(n) “Optionee” shall mean an individual or estate who holds an Option.

(o) “Parent” shall mean any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations other
than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of
the Plan shall be a Parent commencing as of such date.

(p) “Participant” shall mean an individual or estate who holds an Award.

(q) “Plan” shall mean this 2005 Management Stock Option Plan of eGain
Corporation, as amended from time to time.

(r) “Service” shall mean service as an Officer.

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(s) “Share” shall mean one share of Stock, as adjusted in accordance with
Section 8 (if applicable).

(t) “Stock” shall mean the Common Stock of the Company.

(u) “Stock Option Agreement” shall mean the agreement between the Company and an
Optionee that contains the terms, conditions and restrictions pertaining to his
Option.

(v) “Subsidiary” shall mean any corporation, if the Company and/or one or more
other Subsidiaries own not less than 50% of the total combined voting power of
all classes of outstanding stock of such corporation. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

SECTION 3. ADMINISTRATION.

(a) Committee Composition. The Plan shall be administered by the Committee. The
Committee shall consist of two or more directors of the Company, who shall be
appointed by the Board of Directors. In addition, the composition of the
Committee shall satisfy (i) such requirements as the Securities and Exchange
Commission may establish for administrators acting under plans intended to
qualify for exemption under Rule 16b-3 (or its successor) under the Exchange
Act; and (ii) such requirements as the Internal Revenue Service may establish
for outside directors acting under plans intended to qualify for exemption under
Section 162(m)(4)(C) of the Code.

(b) Committee Procedures. The Board of Directors shall designate one of the
members of the Committee as chairman. The Committee may hold meetings at such
times and places as it shall determine. The acts of a majority of the Committee
members present at meetings at which a quorum exists, or acts reduced to or
approved in writing by all Committee members, shall be valid acts of the
Committee.

(c) Committee Responsibilities. Subject to the provisions of the Plan, the
Committee shall have full authority and discretion to take the following
actions:

(i) To interpret the Plan and to apply its provisions;

(ii) To adopt, amend or rescind rules, procedures and forms relating to the
Plan;

(iii) To authorize any person to execute, on behalf of the Company, any
instrument required to carry out the purposes of the Plan;

(iv) To determine when Awards are to be granted under the Plan;

(v) To select the Optionees;

(vi) To determine the number of Shares to be made subject to each Award;

(vii) To prescribe the terms and conditions of each Award, including (without
limitation) the Exercise Price and Purchase Price, and the vesting or duration
of the Award (including accelerating the vesting of Awards, either at the time
of the Award or thereafter, without the consent of the Participant), and to
specify the provisions of the agreement relating to such Award;

(viii) To amend any outstanding Award agreement, subject to applicable legal
restrictions and to the consent of the Participant if the Participant’s rights
or obligations would be materially impaired;

(ix) To prescribe the consideration for the grant of each Award or other right
under the Plan and to determine the sufficiency of such consideration;

(x) To determine the disposition of each Award or other right under the Plan in
the event of a Participant’s divorce or dissolution of marriage;

(xi) To determine whether Awards under the Plan will be granted in replacement
of other grants under an incentive or other compensation plan of an acquired
business;

(xii) To correct any defect, supply any omission, or reconcile any inconsistency
in the Plan or any Award agreement;

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(xiii) To establish or verify the extent of satisfaction of any performance
goals or other conditions applicable to the grant, issuance, exercisability,
vesting and/or ability to retain any Award; and

(xiv) To take any other actions deemed necessary or advisable for the
administration of the Plan.

Subject to the requirements of applicable law, the Committee may designate
persons other than members of the Committee to carry out its responsibilities
and may prescribe such conditions and limitations as it may deem appropriate,
except that the Committee may not delegate its authority with regard to the
selection for participation of or the granting of Options or other rights under
the Plan to persons subject to Section 16 of the Exchange Act. All decisions,
interpretations and other actions of the Committee shall be final and binding on
all Optionees and all persons deriving their rights from an Optionee. No member
of the Committee shall be liable for any action that he has taken or has failed
to take in good faith with respect to the Plan or any Option.

SECTION 4. ELIGIBILITY.

(a) General Rule. Only Officers shall be eligible for the grant of Nonstatutory
Options.

SECTION 5. STOCK SUBJECT TO PLAN.

(a) Basic Limitation. The aggregate number of Shares which may be issued under
the Plan shall not exceed 2,962,400 Shares. The limitations of this Section 5(a)
shall be subject to adjustment pursuant to Section 8. The number of Shares which
are subject to Options outstanding at any time shall not exceed the number of
Shares which then remain available for issuance under the Plan. The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan. Shares offered under
the Plan may be authorized but unissued Shares or treasury Shares. The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.

(b) Award Limitation. Subject to the provisions of Section 8, no Participant may
receive Options under the Plan in any calendar year that relate to more than
250,000 Shares.

(c) Additional Shares. If Shares issued upon the exercise of Options are
forfeited, then such Shares shall again become available for Awards under the
Plan. If Options are forfeited or terminate for any other reason before being
exercised, then the corresponding Shares shall again become available for Awards
under the Plan.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

(a) Stock Option Agreement. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions which are not inconsistent with
the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The Stock Option Agreement shall specify that the Option is an
NSO. The provisions of the various Stock Option Agreements entered into under
the Plan need not be identical. Options may be granted in consideration of a
reduction in the Optionee’s other compensation.

(b) Number of Shares. Each Stock Option Agreement shall specify the number of
Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 8.

(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price. The Exercise Price of an NSO shall not be less 100% of the Fair Market
Value of a Share on the date of grant. Notwithstanding the foregoing, a Stock
Option Agreement may specify that the exercise price of an NSO may vary in
accordance with a predetermined formula. Subject to the foregoing in this
Section 6(c), the Exercise Price under any Option shall be determined by the
Committee at its sole discretion. The Exercise Price shall be payable in one of
the forms described in Section 7.

(d) Withholding Taxes. As a condition to the exercise of an Option, the Optionee
shall make such arrangements as the Committee may require for the satisfaction
of any federal, state, local or foreign withholding tax obligations that may
arise in connection with such exercise. The Optionee shall also make such
arrangements as the Committee may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection
with the disposition of Shares acquired by exercising an Option.

(e) Exercisability and Term. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. The Stock
Option Agreement shall also specify the term of the Option; provided that the
term shall in no event

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exceed five years from the date of grant. A Stock Option Agreement may provide
for accelerated exercisability in the event of the Optionee’s death, disability,
or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee’s Service. Subject to
the foregoing in this Section 6(e), the Committee at its sole discretion shall
determine when all or any installment of an Option is to become exercisable and
when an Option is to expire.

(f) Exercise of Options Upon Termination of Service. Each Stock Option Agreement
shall set forth the extent to which the Optionee shall have the right to
exercise the Option following termination of the Optionee’s Service with the
Company and its Subsidiaries, and the right to exercise the Option of any
executors or administrators of the Optionee’s estate or any person who has
acquired such Option(s) directly from the Optionee by bequest or inheritance.
Such provisions shall be determined in the sole discretion of the Committee,
need not be uniform among all Options issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination of Service.

(g) Effect of Change in Control. The Committee may determine, at the time of
granting an Option or thereafter, that such Option shall become exercisable as
to all or part of the Shares subject to such Option in the event that a Change
in Control occurs with respect to the Company.

(h) Leaves of Absence. An Employee’s Service shall cease when such Employee
ceases to be actively employed by, or a Consultant to, the Company (or any
subsidiary) as determined in the sole discretion of the Board of Directors. For
purposes of Options, Service does not terminate when an Employee goes on a bona
fide leave of absence, that was approved by the Company in writing, if the terms
of the leave provide for continued service crediting, or when continued service
crediting is required by applicable law. Service terminates in any event when
the approved leave ends, unless such Employee immediately returns to active
work. The Company determines which leaves count toward Service, and when Service
terminates for all purposes under the Plan.

(i) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee,
shall have no rights as a stockholder with respect to any Shares covered by his
Option until the date of the issuance of a stock certificate for such Shares. No
adjustments shall be made, except as provided in Section 8.

(j) Modification, Extension and Renewal of Options. Within the limitations of
the Plan, the Committee may modify, extend or renew outstanding options or may
accept the cancellation of outstanding options (to the extent not previously
exercised), whether or not granted hereunder, in return for the grant of new
Options for the same or a different number of Shares and at the same or a
different exercise price, or in return for the grant of the same or a different
number of Shares. The foregoing notwithstanding, no modification of an Option
shall, without the consent of the Optionee, materially impair his or her rights
or obligations under such Option.

(k) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an
Option shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Option Agreement and shall apply in addition to any general restrictions
that may apply to all holders of Shares.

(l) Buyout Provisions. The Committee may at any time (a) offer to buy out for a
payment in cash or cash equivalents an Option previously granted or
(b) authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.

SECTION 7. PAYMENT FOR SHARES.

(a) General Rule. The entire Exercise Price or Purchase Price of Shares issued
under the Plan shall be payable in lawful money of the United States of America
at the time when such Shares are purchased, except as provided in Section 7(b)
through Section 7(g) below.

(b) Surrender of Stock. To the extent that a Stock Option Agreement so provides,
payment may be made all or in part by surrendering, or attesting to the
ownership of, Shares which have already been owned by the Optionee or his
representative. Such Shares shall be valued at their Fair Market Value on the
date when the new Shares are purchased under the Plan. The Optionee shall not
surrender, or attest to the ownership of, Shares in payment of the Exercise
Price if such action would cause the Company to recognize compensation expense
(or additional compensation expense) with respect to the Option for financial
reporting purposes.

(c) Services Rendered. At the discretion of the Committee, Shares may be awarded
under the Plan in consideration of services rendered to the Company or a
Subsidiary prior to the award.

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(d) Cashless Exercise. To the extent that a Stock Option Agreement so provides,
payment may be made all or in part by delivery (on a form prescribed by the
Committee) of an irrevocable direction to a securities broker to sell Shares and
to deliver all or part of the sale proceeds to the Company in payment of the
aggregate Exercise Price.

(e) Exercise/Pledge. To the extent that a Stock Option Agreement so provides,
payment may be made all or in part by delivery (on a form prescribed by the
Committee) of an irrevocable direction to a securities broker or lender to
pledge Shares, as security for a loan, and to deliver all or part of the loan
proceeds to the Company in payment of the aggregate Exercise Price.

(f) Promissory Note. To the extent that a Stock Option Agreement so provides,
payment may be made all or in part by delivering (on a form prescribed by the
Company) a full-recourse promissory note.

(g) Other Forms of Payment. To the extent that a Stock Option Agreement so
provides, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.

(h) Limitations under Applicable Law. Notwithstanding anything herein or in a
Stock Option Agreement to the contrary, payment may not be made in any form that
is unlawful, as determined by the Committee in its sole discretion.

SECTION 8. ADJUSTMENT OF SHARES.

(a) Adjustments. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the price
of Shares, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make
such adjustments as it, in its sole discretion, deems appropriate in one or more
of:

(i) The number of Options available for future Awards under Section 5;

(ii) The limitations set forth in Sections 5(a) and (b);

(iii) The number of Shares covered by each outstanding Option; or

(iv) The Exercise Price under each outstanding Option.

Except as provided in this Section 8, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.

(b) Dissolution or Liquidation. To the extent not previously exercised or
settled, Options shall terminate immediately prior to the dissolution or
liquidation of the Company.

(c) Reorganizations. In the event that the Company is a party to a merger or
other reorganization, outstanding Awards shall be subject to the agreement of
merger or reorganization. Such agreement shall provide for:

(i) The continuation of the outstanding Awards by the Company, if the Company is
a surviving corporation;

(ii) The assumption of the outstanding Awards by the surviving corporation or
its parent or subsidiary;

(iii) The substitution by the surviving corporation or its parent or subsidiary
of its own awards for the outstanding Awards;

(iv) Full exercisability or vesting and accelerated expiration of the
outstanding Awards; or

(v) Settlement of the full value of the outstanding Awards in cash or cash
equivalents followed by cancellation of such Awards.

(d) Reservation of Rights. Except as provided in this Section 8, an Optionee
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any dividend or any other increase or
decrease in the number of shares of stock of any class. Any issue by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or Exercise Price of Shares subject to

- 6 -

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an Option. The grant of an Option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

SECTION 9. DEFERRAL OF AWARDS.

(a) Committee Powers. The Committee (in its sole discretion) may permit or
require a Participant to have Shares that otherwise would be delivered to such
Participant as a result of the exercise of an Option converted into amounts
credited to a deferred compensation account established for such Participant by
the Committee as an entry on the Company’s books. Such amounts shall be
determined by reference to the Fair Market Value of such Shares as of the date
when they otherwise would have been delivered to such Participant.

(b) General Rules. A deferred compensation account established under this
Section 9 may be credited with interest or other forms of investment return, as
determined by the Committee. A Participant for whom such an account is
established shall have no rights other than those of a general creditor of the
Company. Such an account shall represent an unfunded and unsecured obligation of
the Company and shall be subject to the terms and conditions of the applicable
agreement between such Participant and the Company. If the deferral or
conversion of Awards is permitted or required, the Committee (in its sole
discretion) may establish rules, procedures and forms pertaining to such Awards,
including (without limitation) the settlement of deferred compensation accounts
established under this Section 9.

SECTION 10. AWARDS UNDER OTHER PLANS.

The Company may grant awards under other plans or programs. Such awards may not
be settled in the form of Shares issued under this Plan.

SECTION 11. LEGAL AND REGULATORY REQUIREMENTS.

Shares shall not be issued under the Plan unless the issuance and delivery of
such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations and the regulations of any stock exchange on which the Company’s
securities may then be listed, and the Company has obtained the approval or
favorable ruling from any governmental agency which the Company determines is
necessary or advisable. The Company shall not be liable to a Participant or
other persons as to: (a) the non-issuance or sale of Shares as to which the
Company has been unable to obtain from any regulatory body having jurisdiction
the authority deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares under the Plan; and (b) any tax consequences
expected, but not realized, by any Participant or other person due to the
receipt, exercise or settlement of any Award granted under the Plan.

SECTION 12. WITHHOLDING TAXES.

(a) General. To the extent required by applicable federal, state, local or
foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Shares or make any cash payment under the Plan until such
obligations are satisfied.

(b) Share Withholding. The Committee may permit a Participant to satisfy all or
part of his or her withholding or income tax obligations by having the Company
withhold all or a portion of any Shares that otherwise would be issued to him or
her or by surrendering all or a portion of any Shares that he or she previously
acquired. Such Shares shall be valued at their Fair Market Value on the date
when taxes otherwise would be withheld in cash. In no event may a Participant
have Shares withheld that would otherwise be issued to him or her in excess of
the number necessary to satisfy the legally required minimum tax withholding.

SECTION 13. OTHER PROVISIONS APPLICABLE TO AWARDS.

(a) Transferability. Unless the agreement evidencing an Award (or an amendment
thereto authorized by the Committee) expressly provides otherwise, no Award
granted under this Plan, nor any interest in such Award, may be sold, assigned,
conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner
(prior to the vesting and lapse of any and all restrictions applicable to Shares
issued under such Award), other than by will or the laws of descent and
distribution. Any purported assignment, transfer or encumbrance in violation of
this Section 13(a) shall be void and unenforceable against the Company.

- 7 -

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(b) Qualifying Performance Criteria. The number of Shares or other benefits
granted, issued, retainable and/or vested under an Award may be made subject to
the attainment of performance goals for a specified period of time relating to
one or more of the following performance criteria, either individually,
alternatively or in any combination, applied to either the Company as a whole or
to a business unit or Subsidiary, either individually, alternatively or in any
combination, and measured either annually or cumulatively over a period of
years, on an absolute basis or relative to a pre-established target, to previous
years’ results or to a designated comparison group or index, in each case as
specified by the Committee in the Award: (a) cash flow, (b) earnings per share,
(c) earnings before interest, taxes and amortization, (d) return on equity,
(e) total stockholder return, (f) share price performance, (g) return on
capital, (h) return on assets or net assets, (i) revenue, (j) income or net
income, (k) operating income or net operating income, (l) operating profit or
net operating profit, (m) operating margin or profit margin, (n) return on
operating revenue, (o) return on invested capital, or (p) market segment shares
(“Qualifying Performance Criteria”).

The Committee may appropriately adjust any evaluation of performance under a
Qualifying Performance Criteria to exclude any of the following events that
occurs during a performance period: (i) asset write-downs, (ii) litigation or
claim judgments or settlements, (iii) the effect of changes in tax law,
accounting principles or other such laws or provisions affecting reported
results, (iv) accruals for reorganization and restructuring programs and (v) any
extraordinary nonrecurring items as described in Accounting Principles Board
Opinion No. 30 and/or in managements’ discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to
stockholders for the applicable year. If applicable, the Committee shall
determine the Qualifying Performance Criteria not later than the 90th day of the
performance period, and shall determine and certify, for each Participant, the
extent to which the Qualifying Performance Criteria have been met. The Committee
may not in any event increase the amount of compensation payable under the Plan
upon the attainment of a Qualifying Performance Goal to a Participant who is a
“covered employee” within the meaning of Section 162(m) of the Code.

SECTION 14. NO EMPLOYMENT RIGHTS.

No provision of the Plan, nor any right or Option granted under the Plan, shall
be construed to give any person any right to become, to be treated as, or to
remain an Employee. The Company and its Subsidiaries reserve the right to
terminate any person’s Service at any time and for any reason, with or without
notice.

SECTION 15. DURATION AND AMENDMENTS.

(a) Term of the Plan. The Plan, as set forth herein, shall terminate
automatically on May 27, 2015 and may be terminated on any earlier date pursuant
to Subsection (b) below.

(b) Right to Amend or Terminate the Plan. The Board of Directors may amend the
Plan at any time and from time to time. Rights and obligations under any Award
granted before amendment of the Plan shall not be materially impaired by such
amendment, except with consent of the Participant. An amendment of the Plan
shall be subject to the approval of the Company’s stockholders only to the
extent required by applicable laws, regulations or rules.

(c) Effect of Termination. No Awards shall be granted under the Plan after the
termination thereof. The termination of the Plan shall not affect Awards
previously granted under the Plan.

SECTION 16. EXECUTION.

To record the adoption of the Plan by the Board of Directors, the Company has
caused its authorized officer to execute the same.

 

 

eGAIN CORPORATION

 

 

By

 

 

/s/ Eric N. Smit

 

 

Name

 

 

Eric N. Smit

 

 

Title

 

 

Chief financial Officer

 

 

 

- 8 -

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eGAIN CORPORATION

2005 MANAGEMENT STOCK OPTION PLAN

NOTICE OF STOCK OPTION GRANT

You have been granted the following Option to purchase Common Stock of eGAIN
CORPORATION, a Delaware corporation (the “Company”) under the Company’s 2005
Management Stock Option Plan (the “Plan”):

 

Name of Optionee:

 

[Name of Optionee]

 

 

 

Total Number of Option Shares Granted:

 

[Total Number of Shares]

 

 

 

Type of Option:

 

Nonstatutory Stock Option

 

 

 

Exercise Price Per Share:

 

$                    

 

 

 

Grant Date:

 

[Date of Grant]

 

 

 

Vesting Commencement Date:

 

[Vesting Commencement Date]

 

 

 

Vesting Schedule:

 

This Option becomes exercisable with respect to 1/48th of the shares subject to
this Option when you complete each month of continuous “Service” (as defined in
the Plan) from the Vesting Commencement Date.

 

 

 

Expiration Date:

 

[Expiration Date] This Option expires earlier if your Service terminates
earlier, as descried in the Stock Option Agreement.

By your signature and the signature of the Company’s representative below, you
and the Company agree that this Option is granted under and governed by the term
and conditions of the Plan and the Stock Option Agreement, both of which are
attached to and made a part of this document.

 

OPTIONEE:

 

eGAIN CORPORATION

 

 

 

 

 

 

By:

 

 

 

Optionee’s Signature

 

 

 

 

 

 

 

Title:

 

 

 

Optionee’s Printed Name

 

 

 

 

 

 

 

 

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

 

eGAIN CORPORATION

2005 MANAGEMENT STOCK OPTION PLAN

STOCK OPTION AGREEMENT

 

Tax Treatment

 

This Option is intended to be a nonstatutory option, as provided in the Notice
of Stock Option Grant.

 

 

 

Vesting

 

This Option becomes exercisable in installments, as shown in the Notice of Stock
Option Grant. This Option will in no event become exercisable for additional
shares after your Service has terminated for any reason.

 

 

 

Term

 

This Option expires in any event at the close of business at Company
headquarters on the day before the 5th anniversary of the Grant Date, as shown
on the Notice of Stock Option Grant. This Option may expire earlier if your
Service terminates, as described below.

 

 

 

Regular Termination

 

If your Service terminates for any reason except death or “Total and Permanent
Disability” (as defined in the Plan), then this Option will expire at the close
of business at Company headquarters on the date three (3) months after the date
your Service terminates (or, if earlier, the Expiration Date). The Company has
discretion to determine when your Service terminates for all purposes of the
Plan and its determinations are conclusive and binding on all persons.

 

 

 

Death

 

If you die, then this Option will expire at the close of business at Company
headquarters on the date 12 months after the date your Service terminates (or,
if earlier, the Expiration Date). During that period of up to 12 months, your
estate or heirs may exercise the Option.

 

 

 

Disability

 

If your Service terminates because of your Total and Permanent Disability, then
this Option will expire at the close of business at Company headquarters on the
date 12 months after the date your Service terminates (or, if earlier, the
Expiration Date).

 

 

 

Leaves of Absence

 

For purposes of this Option, your Service does not terminate when you go on a
military leave, a sick leave or another bona fide leave of absence, if the leave
was approved by the Company in writing and if continued crediting of Service is
required by the terms of the leave or by applicable law. But your Service
terminates when the approved leave ends, unless you immediately return to active
work.

 

If you go on a leave of absence, then the vesting schedule specified in the
Notice of Stock Option Grant may be adjusted in accordance with the Company’s
leave of absence policy or the terms of your leave. If you commence working on a
part-time basis, then the vesting schedule specified in the Notice of Stock
Option Grant may be adjusted in accordance with the Company’s part-time work
policy or the terms of an agreement between you and the Company pertaining to
your part-time schedule.

 

 

Restrictions on Exercise

 

The Company will not permit you to exercise this Option if the issuance of
shares at that time would violate any law or regulation. The inability of the
Company to obtain approval from any regulatory body having authority deemed by
the Company to be necessary to the lawful issuance and sale of the Company stock
pursuant to this Option shall relieve the Company of any liability with respect
to the non-issuance or sale of the Company stock as to which such approval shall
not have been obtained. However, the Company shall use its best efforts to
obtain such approval.

 

 

 

Notice of Exercise

 

When you wish to exercise this Option you must notify the Company by completing
the attached “Notice of Exercise of Stock Option” form and filing it with the
Human Resources Department of the Company. You notice must specify how many
shares you wish to purchase. Your notice must also specify how your shares
should be registered. The notice will be effective when it is received by the
Company. If someone else wants to exercise this Option after your death, that
person must prove to the Company’s satisfaction that he or she is entitled to do
so.

 

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

 

Form of Payment

 

When you submit your notice of exercise, you must include payment of the Option
exercise price for the shares you are purchasing. Payment may be made in the
following form(s):

 

 

 

 

 

·     Your personal check, a cashier’s check or a money order.

 

 

 

 

 

·     Certificates for shares of Company stock that you own, along with any
forms needed to effect a transfer of those shares to the Company. The value of
the shares, determined as of the effective date of the Option exercise, will be
applied to the Option exercise price. Instead of surrendering shares of Company
stock, you may attest to the ownership of those shares on a form provided by the
Company and have the same number of shares subtracted from the Option shares
issued to you. However, you may not surrender, or attest to the ownership of
shares of Company stock in payment of the exercise price if your action would
cause the Company to recognize a compensation expense (or additional
compensation expense) with respect to this Option for financial reporting
purposes.

 

 

 

 

 

·     By delivering on a form approved by the Committee of an irrevocable
direction to a securities broker approved by the Company to sell all or part of
your Option shares and to deliver to the Company from the sale proceeds in an
amount sufficient to pay the Option exercise price and any withholding taxes.
The balance of the sale proceeds, if any, will be delivered to you. The
directions must be given by signing a special “Notice of Exercise” form provided
by the Company.

 

 

 

 

 

·     Irrevocable directions to a securities broker or lender approved by the
Company to pledge Option shares as security for a loan and to deliver to the
Company from the loan proceeds an amount sufficient to pay the Option exercise
price and any withholding taxes. The directions must be given by signing a
special “Notice of Exercise” form provided by the Company.

 

 

 

 

 

Notwithstanding the foregoing, payment may not be made in any form that is
unlawful, as determined by the Company in its sole discretion.

 

 

Withholding Taxes and Stock Withholding

 

You will not be allowed to exercise this Option unless you make arrangements
acceptable to the Company to pay any withholding taxes that may be due as a
result of the Option exercise. These arrangements may include withholding shares
of Company stock that otherwise would be issued to you when you exercise this
Option. The value of these shares, determined as of the effective date of the
Option exercise, will be applied to the withholding taxes.

 

 

 

Restrictions on Resale

 

By signing this Agreement, you agree not to sell any Option shares at a time
when applicable laws, Company policies or an agreement between the Company and
its underwriters prohibit a sale (e.g., a lock-up period after the Company goes
public). This restriction will apply as long as you are an employee, consultant
or director of the Company or a subsidiary of the Company.

 

 

 

Transfer of Option

 

In general, only you can exercise this Option prior to your death. You cannot
transfer or assign this Option, other than as designated by you by will or by
the laws of descent and distribution, except as provided below. For instance,
you may not sell this Option or use it as security for a loan. If you attempt to
do any of these things, this Option will immediately become invalid. You may in
any event dispose of this Option in your will. Regardless of any marital
property settlement agreement, the Company is not obligated to honor a notice of
exercise from your former spouse, nor is the Company obligated to recognize your
former spouse’s interest in your Option in any other way.

 

 

 

 

 

However, the “Committee” (as defined in the Plan) may, in its sole discretion,
allow you to transfer this Option as a gift to one or more family members. For
purposes of this Agreement, “family member” means a child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law or sister-in-law (including adoptive
relationships), any individual sharing your household (other than a tenant or
employee), a trust in which one or more of these individuals have more than 50%
of the beneficial interest, a foundation in which you or one or more of these
persons control the management of assets, and any entity in which you or one or
more of these persons own more than 50% of the voting interest.

 

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

 

 

 

 

 

 

In addition, the Committee may, in its sole discretion, allow you to transfer
this option to your spouse or former spouse pursuant to a domestic relations
order in settlement of marital property rights.

 

 

 

 

 

The Committee will allow you to transfer this Option only if both you and the
transferee(s) execute the forms prescribed by the Committee, which include the
consent of the transferee(s) to be bound by this Agreement.

 

 

 

Retention Rights

 

Neither your Option nor this Agreement gives you 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 your Service at any time, with or
without cause.

 

 

 

Stockholder Rights

 

You, or your estate or heirs, have no rights as a stockholder of the Company
until you have exercised this Option by giving the required notice to the
Company and paying the exercise price. No adjustments are made for dividends or
other rights if the applicable record date occurs before you exercise this
Option, except as described in the Plan.

 

 

 

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 Option and the exercise price per
share may be adjusted pursuant to the Plan.

 

 

Applicable Law

 

This Agreement will be interpreted and enforced under the laws of the State of
Delaware (without regard to their choice-of-law provisions).

 

 

 

The Plan and Other Agreements

 

The text of the Plan is incorporated in this Agreement by reference. All
capitalized terms in the Stock Option Agreement shall have the meanings assigned
to them in the Plan. This Agreement and the Plan constitute the entire
understanding between you and the Company regarding this Option. Any prior
agreements, commitments or negotiations concerning this Option are superseded.
This Agreement may be amended only by another written agreement, signed by both
parties.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT

YOU AGREE TO ALL OF THE TERMS AND CONDITIONS

DESCRIBED ABOVE IN THE PLAN

 

 

 

 

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

 

eGAIN CORPORATION

2005 MANAGEMENT STOCK OPTION PLAN

NOTICE OF EXERCISE OF STOCK OPTION

You must sign this Notice on the last page before submitting it to the Company

OPTIONEE INFORMATION:

 

Name:
                                                                                                  

 

Social Security Number:

 

 

 

Address:
                                                                                               

 

Employee Number:

 

 

 

OPTION INFORMATION:

 

Date of Grant:                         , 200    

 

Type of Stock Option:

Exercise Price per Share: $                    

 

Nonstatutory (NSO)

Total number of shares of Common Stock of eGAIN CORPORATION, a Delaware
corporation (the “Company”) covered by option:                     

EXERCISE INFORMATION:

Number of shares of Common Stock of the Company for which option is being
exercised now:                     

(These shares are referred to below as the “Purchased Shares.”)

Total exercise price for the Purchased Shares: $                    

Form of payment enclosed [check all that apply]:

 

¨

 

Check for $                    , payable to “eGAIN CORPORATION”

 

¨

 

 

Certificate(s) for                      shares of Common Stock of the Company
that I have owned for at least six months or have purchased in the open market.
(These shares will be valued as of the date when the Company receives this
notice.)

 

¨

 

 

Attestation Form covering shares of Common Stock of the Company. (These shares
will be valued as of the date when the Company receives this notice.)

 

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

 

Name(s) in which the Purchased Shares should be registered

[please check one box]:

 

¨

 

In my name only

 

 

 

 

 

 

 

¨

 

In the names of my spouse and myself as community property

 

My spouse’s name (if applicable):

 

 

 

 

 

 

 

 

 

 

¨

 

In the names of my spouse and myself as joint tenants with the right of
survivorship

 

 

 

 

 

 

 

¨

 

In the name of an eligible revocable trust

 

Full legal name of revocable trust:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The certificate for the Purchased Shares should be sent to the following
address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACKNOWLEDGMENTS:

1.

I understand that all sales of Purchased Shares are subject to compliance with
the Company’s policy on securities trades.

2.

I hereby acknowledge that I received and read a copy of the prospectus
describing the Company’s 2005 Management Stock Option Plan and the tax
consequences of an exercise.

3.

In the case of a nonstatutory option, I understand that I must recognize
ordinary income equal to the spread between the fair market value of the
Purchased Shares on the date of exercise and the exercise price. I further
understand that I am required to pay withholding taxes at the time of exercising
a nonstatutory option.

4.

I acknowledge that the Company has encouraged me to consult my own adviser to
determine the form of ownership that is appropriate for me. In the event that I
choose to transfer my Purchased Shares to a trust that does not satisfy the
requirements of the Internal Revenue Service (i.e., a trust that is not an
eligible revocable trust), I also acknowledge that the transfer will be treated
as a “disposition” for tax purposes.

SIGNATURE AND DATE:

                     , 20