Exhibit 10.13
[FORM OF PERFORMANCE-BASED STOCK OPTION AGREEMENT]
CALLIDUS SOFTWARE, INC.
2003 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Option Agreement.
I.     NOTICE OF STOCK OPTION GRANT
[Name]
[Address]
The undersigned Optionee has been granted an Option to purchase Common Stock of
the Company, subject to the terms and conditions of the 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 shall be exercisable, in whole or in part, according to the
following vesting schedule:
Grants will vest 100% three years from the date of grant. Vesting will
accelerate in accordance with the table below at the end of any 22 consecutive
trading periods (i.e. on the 23rd day) in which:
(i) The average closing price during that 22 consecutive day period is equal to
or exceeds the Target Stock Price listed below: and
(ii) The closing stock price for at least 15 trading days within the 22-day
consecutive period is equal to or exceeds the Target Stock Price.
Target Stock Price $5/share - 20% cumulatively vested
Target Stock Price $8/share - 40% cumulatively vested
Target Stock Price $11/share - 60% cumulatively vested
Target Stock Price $13/share - 80% cumulatively vested
Target Stock price $16/share – 100% cumulatively vested
Termination Period:
This Option shall be exercisable for 90 days after Optionee ceases to be a
Service Provider. Upon Optionee’s death or disability, this Option may be
exercised for such longer period as provided in the Plan. In no event may
Optionee exercise this Option after the Term/Expiration Date as provided above.

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

II.    AGREEMENT
1.  Grant of Option. The Plan Administrator of the Company hereby grants to the
Optionee named in the Notice of Grant (the “Optionee”), an option (the “Option”)
to purchase the number of Shares set forth in the Notice of Grant, at the
exercise price per Share set forth in the Notice of Grant (the “Exercise
Price”), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 15(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.
2.  Exercise of Option.
(a) Right to Exercise. This Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and with the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option shall be exercisable by delivery of an
exercise notice in the form attached as Exhibit A (the “Exercise Notice”) which
shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by the aggregate Exercise
Price. The Administrator shall require payment of any amount the Company may
determine to be necessary to withhold for taxes as a result of the exercise of
an award. In the absence of any other arrangement, Optionee agrees that the
Company shall be entitled to withhold from any payments to be made by the
Company to Optionee an amount equal to such withholding obligations.
No Shares shall be issued pursuant to the exercise of an Option unless such
issuance and such exercise complies with Applicable laws. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.
3. 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 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 only to the first 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.
4. Method of Payment. Payment of the aggregate Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
(a) cash or check;
(b) consideration received by the Company under a formal cashless exercise
program adopted by the Company in connection with the Plan; or
(c) surrender of other Shares which, (i) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (ii) have a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Exercised Shares.
5.  Restrictions on Exercise. This Option may not be exercised until such time
as the Plan has been approved by the stockholders of the Company, or 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
Law.
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 Optionee. The terms of the
Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
7.  Term of Option. This Option may be exercised only within the term set out in
the Notice of Grant, and may be exercised during such term only in accordance
with the Plan and the terms of this Option.

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

8.  Entire Agreement Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option 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 Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of the State of California.
9.  No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT
OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE
OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
Optionee acknowledges receipt of a copy of the Plan 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 has reviewed
the Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.
OPTIONEE:
CALLIDUS SOFTWARE, INC.
 
 
 
 
 
 
Signature
By
 
 
 
 
 
Title
 
 
Residence Address