Exhibit 10.2

 

Notice of Grant of Stock Option and Option Agreement

MANUGISTICS GROUP, INC.

Supplemental Retention Program

 

ID: 52-1469385

 

 

9715 KEY WEST AVENUE

 

 

ROCKVILLE MD 20850

 

 

 

Grant Number:

 

 

Plan:

 

 

ID:

 

Dear       :

 

Effective November 1, 2005, you have been granted a Non-Qualified Stock Option
(the “Option”) to buy       shares of Manugistics Group, Inc. (the “Company”)
common stock at an exercise price of  $       per share, with an expiration date
of November 1, 2015.  The total option price of the shares granted is $      .00

Subject to the requirement that you be employed by the Company (or be a member
of its Board of Directors (the “Board”)) immediately before the relevant event,
this Option will be fully exercisable (“Vested”) as of the earliest of

 

(i)            November 1, 2006 (the first anniversary of the date of grant);

(ii)           the date of a “Change in Control” (as defined in Exhibit A); or

(iii)          the date of your resignation for “Good Reason” or the Company’s
involuntary termination of your employment other than for “Cause” (both as
defined in Exhibit A) (each of (i), (ii) and (iii) constituting a “Date of
Vesting”).

 

When the Option vests, you may exercise a minimum of 50 shares or, if fewer, the
total number of shares exercisable.  At the time of the exercise, you are
required to pay the exercise price and the applicable taxes by cash or check in
U.S. dollars.  If the vesting of this Option would subject you to the federal
excise tax on “excess parachute payments” under Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), then the vesting will be treated
as provided under Exhibit B.

 

Except as provided above, you will forfeit any unvested portions of this Option
immediately on the later of the date you cease to be employed (or, if later, a
member of the Board) or cease to be entitled to severance payments.  Ceasing to
be employed for this purpose includes death and termination as a result of
permanent disability.   If your employment with the Company ends for any reason
other than death or permanent disability, you may exercise the Option, if then
vested (or then vesting as provided above) only within 30 days from your
termination date (or, if longer, over the period during which you are entitled
to severance payments).  If your employment ends because you become permanently
disabled, you have one (1) year from the date of disability to exercise your
Option if and to the extent the Option is vested when your employment ends.  If
you die while employed by Manugistics, your beneficiaries or your estate have
one (1) year from the date of death to exercise your Option if and to the extent
the Option is already vested.

 

By your signature below, you agree that this Option is granted under and
governed by this Option Agreement and the Amended and Restated 1998 Stock Option
Plan  (the “1998 Plan”), as amended.  A copy of the 1998 Plan is incorporated by
this reference and can be found in the Company’s Employee Encyclopedia.  As
stated in section 5(c) of the 1998 Plan, any interpretations, decisions, or
actions made by the Committee administering the 1998 Plan will be final,
conclusive and binding.  The grant of this Option shall not prevent the Company
from terminating your employment or modifying the conditions of your employment
at any time.

 

Please electronically sign this Notice and print a copy for your records.

 

 

Signature:

 

 

Date:

 

 

 

 

 

 

Note: If there are any discrepancies in the name or address shown above, please
make the appropriate corrections on this form.

 

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Exhibit A

Definitions

 

A “Change in Control” for this purpose means the occurrence of any one or more
of the following events:

 

(i) sale of all or substantially all of the assets of the Company to one or more
individuals, entities, or groups acting together;

 

(ii) complete or substantially complete dissolution or liquidation of the
Company;

 

(iii) a person, entity, or group acquires or attains ownership of more than 50%
of the undiluted total voting power of the Company’s then-outstanding securities
eligible to vote to elect members of the Board (“Company Voting Securities”);

 

(iv) completion of a merger, consolidation, or reorganization of the Company
with or into any other entity unless the holders of the Company Voting
Securities outstanding immediately before such completion, together with any
trustee or other fiduciary holding securities under a Company benefit plan,
retain control because they hold securities that represent immediately after
such merger or consolidation at least 50% of the combined voting power of the
then outstanding voting securities of either the Company or the other surviving
entity or its ultimate parent;

 

(v) the individuals who constitute the Board immediately before a proxy contest
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied) immediately following the proxy contest;
or

 

(vi) during any two year period, the individuals who constitute the Board at the
beginning of the period (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board (excluding any Board seat that is
vacant or otherwise unoccupied), provided that any individuals that a majority
of Incumbent Directors approve for service on the Board are treated as Incumbent
Directors.

 

The Board or the Compensation Committee will have the same authority to
determine the existence of a Change in Control under this definition as it has
under the 1998 Plan.  In addition, if the 1998 Plan would cause a grant of
options or stock to terminate or be converted under its terms and under the
authority of the Board or the Compensation Committee, the 1998 Plan will
control.

 

“Cause” means the individual:

(i) commits a material breach of his or her obligations or agreements with
respect to the Company;

 

(ii) commits an act of fraud, material dishonesty, or gross negligence with
respect to the Company or otherwise act with willful disregard for the Company’s
best interests;

 

(iii) fails or refuses to perform any duties delegated to him or her that are
consistent with the duties of similarly-situated executives or are otherwise
required;

 

(iv) seizes a corporate opportunity for himself or herself instead of offering
such opportunity to the Company if it is within the scope of the Company’s or
its subsidiaries’ or parent’s business; or

 

(v) is convicted of or pleads guilty or no contest to a felony (or to a felony
charge reduced to misdemeanor), or, with respect to his or her employment, to
any misdemeanor (other than a traffic violation) or, with respect to his or her
employment, knowingly violates any federal or state securities or tax laws.

 

“Good Reason” means:

(i) the Company reduces the individual’s base salary without his or her consent;
or

 

(ii) the Company assigns the individual duties materially inconsistent with, or
substantially diminishes, his or her status or responsibilities without his or
her consent.

 

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Exhibit B

Parachute Tax Treatment

 

The Company will vest this Option without regard to whether the deductibility of
compensation under such vesting (or any other payments or benefits) would be
limited or precluded by Section 280G of the Code and without regard to whether
such vesting would subject the participants to the federal excise tax levied on
certain “excess parachute payments” under Section 4999 of the Code; provided,
however, that if the Total After-Tax Payments (as defined below) would be
increased by the reduction or elimination of any payment and/or other benefit
(including the vesting of any restricted stock grant or of this Option) under
the Supplemental Retention Program, then the amount provided under this Option
(and other amounts received under the Supplemental Retention Program) will be
reduced or eliminated as follows: (i) first, by reducing or eliminating any cash
payments or other benefits (other than the vesting of this Option and restricted
stock) and (ii) second, by reducing or eliminating the vesting of the Option and
restricted stock that occurs as a result of a Change in Control (as provided
above), to the extent necessary to maximize the Total After-Tax Payments. The
Company’s independent, certified public accounting firm will determine whether
and to what extent payments or vesting under the Supplemental Retention Program
are required to be reduced in accordance with the preceding sentence. If there
is an underpayment or overpayment under the Supplemental Retention Program (as
determined after the application of this paragraph), the amount of such
underpayment or overpayment will be paid immediately to the applicable
participant or refunded by him or her, as the case may be, with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code. For
purposes of the Supplemental Retention Program, “Total After-Tax Payments” means
the total of all “parachute payments” (as that term is defined in Section
280G(b)(2) of the Code) made to or for the benefit of a participant (whether
made under the Agreement or otherwise), after reduction for all applicable
federal taxes (including, without limitation, the tax described in Section 4999
of the Code).

 

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