EXHIBIT 10.3
 

 
TALEO CORPORATION
 
2009 EQUITY INCENTIVE PLAN
 
STOCK OPTION AGREEMENT

 
Unless otherwise defined herein, the terms defined in the 2009 Equity Incentive
Plan shall have the same defined meanings in this Stock Option Agreement (the
“Agreement”).
 
I. NOTICE OF STOCK OPTION GRANT
 
[Optionee’s Name and Address]
 
You have been granted an option to purchase Common Stock of the Company, subject
to the terms and conditions of the Plan and this 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:                                                      ___
Incentive Stock Option
 
  ___Nonstatutory Stock Option
 
Term/Expiration Date:                                                      

 
Vesting Schedule:
 
This Option shall be exercisable, in whole or in part, in accordance with the
following schedule:
 
[25% of the Shares subject to the Option shall vest twelve (12) months after the
Vesting Commencement Date, and 1/48th of the Shares subject to the Option shall
vest each month thereafter on the same day of the month as the Vesting
Commencement Date (and if there is no corresponding day, on the last day of the
month), subject to the Optionee continuing to be a Service Provider through each
such date.]
 
[In addition, any acceleration of option vesting provisions included in
Optionee’s written employment or other written agreement with the Company
entered into on or prior to the Date of Grant will apply (each of which such
provision is incorporated by reference herein).]
 
Termination Period:
 
To the extent vested as of the date Optionee ceases to be a Service Provider
this Option will be exercisable for [three (3) months] after Optionee ceases to
be a Service Provider, unless such termination is due to Optionee’s death or
Disability, in which case this Option will be exercisable for [twelve (12)
months] after Optionee ceases to be a Service Provider.  Notwithstanding the
foregoing, in no event shall this Option be exercised after the Term/Expiration
Date as provided above and may be subject to earlier termination as provided in
Section 15(c) of the Plan.
 
Optionee and the Company agree that this Option is granted under and governed by
the terms and conditions of the Plan and this Agreement, including this Notice
of Stock Option Grant and the Part II of this Agreement (Terms and Conditions of
Option Agreement), attached hereto as Appendix A.  Optionee has reviewed the
Plan and this Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Agreement and fully understands all
provisions of the Plan and Agreement.  Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Agreement.  Optionee
further agrees to notify the Company upon any change in the residence address
indicated above.

Optionee acknowledges and agrees that by clicking the
[“ACCEPT”]OR[“ACKNOWLEDGE”] button on the E*TRADE on-line grant agreement
response page, it will act as Optionee’s electronic signature to this Agreement
and will constitute Optionee’s acknowledgement of and agreement with all of the
terms and conditions of the Option, as set forth in this Agreement and the
Plan.  Optionee may, if he or she prefers, sign, date and return to the Company
a paper copy of this Agreement.

 
TALEO CORPORATION

By
 

Title
 

 
 

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APPENDIX A
 

 
II. TERMS AND CONDITIONS OF OPTION AGREEMENT
 
A. Grant of Option.  The Company hereby grants to the Optionee named in the
Notice of Stock Option Grant (the “Notice of Grant”) attached as Part I of this
Agreement (the “Optionee”) an option (the “Option”) to purchase the number of
Shares, as set forth in the Notice Grant, at the exercise price per share set
forth in the Notice of Grant (the “Exercise Price”), subject to all of the terms
and conditions of the Plan, which is incorporated herein by reference.  Subject
to Section 20(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.
 
If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an ISO under Section 422 of the
Code.  Nevertheless, to the extent that it exceeds the $100,000 rule of Code
Section 422(d), it shall be treated as a Nonstatutory Stock Option
(“NSO”).  Further, if for any reason this Option (or portion thereof) shall not
qualify as an ISO, then, to the extent of such nonqualification, the Option (or
portion thereof) shall be regarded as a NSO granted under the Plan.  In no event
shall the Administrator, the Company or any Parent or Subsidiary or any of their
respective employees or directors have any liability to Optionee (or any other
person) due to the failure of the Option to qualify for any reason as an ISO.
 
B. Vesting Schedule.  Except as provided in paragraph C, the Option awarded by
this Agreement will vest in accordance with the vesting provisions set forth in
the Notice of Grant.  Shares scheduled to vest on a certain date or upon the
occurrence of a certain condition will not vest in Optionee in accordance with
any of the provisions of this Agreement, unless Optionee will have been
continuously a Service Provider from the Date of Grant until the date such
vesting occurs.
 
C. Administrator Discretion.  The Administrator, in its discretion, may
accelerate the vesting of the balance, or some lesser portion of the balance, of
the unvested Option at any time, subject to the terms of the Plan.  If so
accelerated, such Option will be considered as having vested as of the date
specified by the Administrator.
 
D. Exercise of Option.
 
(a) Right to Exercise.  This Option is exercisable during its term in accordance
with the Vesting Schedule set out in the Notice of Grant and the applicable
provisions of the Plan and this Agreement.
 
(b) Method of Exercise.  This Option is exercisable by delivery of an exercise
notice, in the form attached as Exhibit A (the “Exercise Notice”) or in a manner
and pursuant to such procedures as the Administrator may determine, which shall
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan.  The Exercise Notice shall be completed by the Optionee
and delivered to the Company.  The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares together with
any applicable tax withholding.  This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by such aggregate Exercise Price.
 
No Shares shall be issued pursuant to the exercise of this Option unless such
issuance and exercise complies with Applicable Laws.  Assuming such compliance,
for income tax purposes the Exercised Shares shall be considered transferred to
the Optionee on the date the Option is exercised with respect to such Exercised
Shares.
 
E. 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:
 
1. cash; or
 
2. check; or
 
3. consideration received by the Company under a formal cashless exercise
program implemented by the Company in connection with the Plan; or
 
4. other Shares which have a Fair Market Value on the date of surrender equal to
the aggregate Exercise Price of the Exercised Shares, provided that accepting
such Shares, in the sole discretion of the Administrator, will not result in any
adverse accounting consequences to the Company.
 
F. 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
the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
 
G. 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 Agreement.
 

 
H. Tax Obligations.
 
(a) Withholding Taxes.  Notwithstanding any contrary provision of this
Agreement, no certificate representing the Shares will be issued to Optionee,
unless and until satisfactory arrangements (as determined by the Administrator)
will have been made by the Optionee with respect to the payment of income,
employment and other taxes which the Company determines must be withheld with
respect to such Shares.  To the extent determined appropriate by the Company in
its discretion, it will have the right (but not the obligation) to satisfy any
tax withholding obligations by reducing the number of Shares otherwise
deliverable to Optionee.  If Optionee fails to make satisfy arrangements for the
payment of any required tax withholding obligations hereunder at the time of the
Optionee exercise, Optionee acknowledges and agrees that the Company may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.
 
(b) Notice of Disqualifying Disposition of ISO Shares.  If the Option granted to
Optionee herein is an ISO, and if Optionee sells or otherwise disposes of any of
the Shares acquired pursuant to the ISO on or before the later of (i) the date
two (2) years after the Date of Grant, or (ii) the date one (1) year after the
date of exercise, the Optionee shall immediately notify the Company in writing
of such disposition.  Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee.
 
(c)           Code Section 409A.  Under Code Section 409A, an option that vests
after December 31, 2004 that was granted with a per Share exercise price that is
determined by the Internal Revenue Service (the “IRS”) to be less than the Fair
Market Value of a Share on the date of grant (a “Discount Option”) may be
considered “deferred compensation.”  A Discount Option may result in (i) income
recognition by Optionee prior to the exercise of the optionee, (ii) an
additional twenty percent (20%) federal income tax, and (iii) potential penalty
and interest charges.  The Discount Option may also result in additional state
income, penalty and interest charges to the Optionee.  Optionee acknowledges
that the Company cannot and has not guaranteed that the IRS will agree that the
per Share exercise price of this Option equals or exceeds the Fair Market Value
of a Share on the Date of Grant in a later examination.  Optionee agrees that if
the IRS determines that the Option was granted with a per Share exercise price
that was less than the Fair Market Value of a Share on the date of grant,
Optionee will be solely responsible for Optionee’s costs related to such a
determination.
 
I. Rights as Stockholder.  Neither Optionee nor any person claiming under or
through Optionee will have any of the rights or privileges of a stockholder of
the Company in respect of any Shares deliverable hereunder unless and until
certificates representing such Shares will have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to
Optionee.  Such issuance, recordation and delivery may be accomplished, without
limitation, via appropriate entry on the Company’s books or those of our
transfer agents and/or electronically. After such issuance, recordation and
delivery, Optionee will have all the rights of a stockholder of the Company with
respect to voting such Shares and receipt of dividends and distributions on such
Shares.
 

 
J. 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 (AND NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING 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 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.
 
K. Address for Notices.  Any notice to be given to the Company under the terms
of this Agreement will be addressed to the Company, in care of its Secretary, at
Taleo Corporation, 4140 Dublin Boulevard, Suite 400, Dublin, California 94568,
or at such other address as the Company may hereafter designate in writing.
 
L. Restrictions on Exercise/Additional Conditions to Issuance of Shares.  This
Option may not be exercised if the issuance of Shares upon such exercise or the
method of consideration for such Shares would constitute a violation of any
Applicable Law.  The Company shall not be required to issue any certificate or
certificates for Shares upon exercise of this Option prior to fulfillment of all
the following conditions (free of any conditions not acceptable to the
Company):  (a) the admission of such Shares to listing on all stock exchanges on
which such class of stock is then listed; (b) the completion of any registration
or other qualification of such Shares under any U.S. state or federal law or
under the rulings or regulations of the Securities and Exchange Commission or
any other governmental regulatory body, which the Administrator shall, in its
absolute discretion, deem necessary or advisable; and (c) the obtaining of any
approval or other clearance from any U.S. state or federal governmental agency
or any other governmental regulatory body, which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable.  Where the Company
determines that the issuance of any Shares upon exercise of this Option will
violate federal securities laws or other applicable laws, the Company will defer
such issuance until the earliest date at which the Company reasonably
anticipates that the issuance of Shares will no longer cause such
violation.  The Company will make all reasonable efforts to meet the
requirements of any such state or federal law or securities exchange and to
obtain any such consent or approval of any such governmental
authority.  Assuming such compliance, for income tax purposes the Exercised
Shares will be considered transferred to Optionee on the date the Option is
exercised with respect to such Exercised Shares.
 
M. Administrator Authority.  The Administrator will have the power to interpret
the Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules (including, but not limited to, the
determination of whether or not any Shares subject to the Option have
vested).  All actions taken and all interpretations and determinations made by
the Administrator in good faith will be final and binding upon Optionee, the
Company and all other interested persons.  No member of the Administrator will
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or this Agreement.
 
N. Electronic Delivery.  The Company may, in its sole discretion, decide to
deliver any documents related to Options awarded under the Plan or future
Options that may be awarded under the Plan by electronic means or request
Optionee’s consent to participate in the Plan by electronic means.  Optionee
hereby consents to receive such documents by electronic delivery and agrees to
participate in the Plan through any on-line or electronic system established and
maintained by the Company or another third party designated by the Company.
 
O. Captions.  Captions provided herein are for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
 
P. Entire Agreement; Modifications to the Agreement.  This Agreement, together
with any written agreement between the Optionee and the Company that has been
incorporated by reference herein in the “Vesting Schedule” section of the Notice
of Grant (whether entered into prior to or contemporaneously with this
Agreement), constitutes the entire understanding of the parties on the subjects
covered.  Optionee expressly warrants that he or she is not accepting this
Agreement in reliance on any promises, representations, or inducements other
than those contained herein.  Modifications to this Agreement or the Plan can be
made only in an express written contract executed by a duly authorized officer
of the Company.  Notwithstanding anything to the contrary in the Plan or this
Agreement, the Company reserves the right to revise this Agreement as it deems
necessary or advisable, in its sole discretion and without the consent of
Optionee, to comply with Code Section 409A or to otherwise avoid imposition of
any additional tax or income recognition under Code Section 409A in connection
to this Option.
 
Q. Amendment, Suspension or Termination of the Plan.  By accepting this Award,
Optionee expressly warrants that he or she has received an Option under the Plan
and subject to all terms and provisions of the Plan and this Agreement, and has
received, read and understood a description of the Plan.  Optionee understands
that the Plan is discretionary in nature and may be amended, suspended or
terminated by the Company at any time.
 
R. Governing Law.  This Agreement will be governed by the laws of the State of
California, without giving effect to the conflict of law principles
thereof.  For purposes of litigating any dispute that arises under this Option
or this Agreement, the parties hereby submit to and consent to the jurisdiction
of the State of California, and agree that such litigation will be conducted in
the courts of Alameda County, California, or the federal courts for the United
States for the Northern District of California, and no other courts, where this
Option is made and/or to be performed.
 
S. Severability.  In the event that any provision of this Agreement will be held
invalid or unenforceable, such provision will be severable from, and such
invalidity or unenforceability will not be construed to have any effect on, the
remaining provisions of this Agreement.
 
T. Binding Agreement.  Subject to the limitation on the transferability of this
grant contained herein, this Agreement will be binding upon and inure to the
benefit of the heirs, legatees, legal representatives, successors and assigns of
the parties hereto.
 
U. Plan Governs.  This Agreement is subject to all terms and provisions of the
Plan.  In the event of a conflict between one or more provisions of this
Agreement and one or more provisions of the Plan, the provisions of the Plan
will govern.  Capitalized terms used and not defined in this Agreement will have
the meaning set forth in the Plan.
 
V. Labor Law.  By entering into this Agreement, the Optionee acknowledges that:
(a) the grant of this Option is a one-time benefit which does not create any
contractual or other right to receive future grants of stock options, or
benefits in lieu of stock options; (b) all determinations with respect to any
future grants, including, but not limited to, the times when the stock options
shall be granted, the number of shares of Company Common Stock subject to each
stock option and the time or times when the stock options shall vest, will be at
the sole discretion of the Company; (c) the Optionee’s participation in the Plan
is voluntary; (d) the value of this Option is an extraordinary item of
compensation which is outside the scope of the Optionee’s employment contract,
if any; (e) this Option is not part of the Optionee’s normal or expected
compensation for purposes of calculating any severance, resignation, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments; (f) the vesting of the Shares subject to the
Option will cease upon termination of employment for any reason except as may
otherwise be explicitly provided in the Plan or this Agreement; (g) the future
value of the underlying Shares is unknown and cannot be predicted with
certainty; (h) this Option has been granted to the Optionee in the Optionee’s
status as a Service Provider of the Company or its Parent or one of its
Subsidiaries; (i) any claims resulting from this Option shall be enforceable, if
at all, against the Company; and (j) there shall be no additional obligations
for any Parent or Subsidiary employing the Optionee as a result of this Option.
 
W. Disclosure of Optionee Information.  By entering into this Agreement, and as
a condition of the grant of the Option, the Optionee hereby explicitly and
unambiguously consents to the collection, use and transfer, in electronic or
other form, of personal data as described in this paragraph W.  The Optionee
understands that the Company and its Parent and Subsidiaries hold certain
personal information about him or her, including his or her name, home address
and telephone number, date of birth, social security or identity number, salary,
nationality, job title, any shares of stock or directorships held in the
Company, details of all awards of Options or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in his or
her favor, for the purpose of managing and administering the Plan (“Data”).  The
Optionee further understands that the Company and/or its Parent and/or its
Subsidiaries will transfer Data among themselves as necessary for the purpose of
implementation, administration and management of his or her participation in the
Plan, and that the Company and/or any of its Parent and/or Subsidiaries may each
further transfer Data to any third parties assisting the Company in the
implementation, administration and management of the Plan.  The Optionee
understands that these recipients may be located in the European Economic Area,
or elsewhere, such as in the U.S. or Asia.  The Optionee authorizes the Company
to receive, possess, use, retain and transfer the Data in electronic or other
form, for the purposes of implementing, administering and managing his or her
participation in the Plan, including any requisite transfer to a broker or other
third party with whom he or she may elect to deposit any Shares acquired
pursuant to the exercise of this Option of such Data as may be required for the
administration of the Plan and/or the subsequent holding of Shares on his or her
behalf.  The Optionee understands that he or she may, at any time, view the
Data, require any necessary amendments to the Data or withdraw the consent
herein in writing by contacting the Human Resources department for the Company
and/or its applicable Parent or Subsidiary.
 
X. Language.  If Optionee has received this Agreement or any other document
related to the Plan translated into a language other than English and if the
translated version is different than the English version, the English version
will control.
o   0   o
 

 
 

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EXHIBIT A
 
TALEO CORPORATION
 
2009 EQUITY INCENTIVE PLAN
 
EXERCISE NOTICE
 

Taleo Corporation
4140 Dublin Boulevard, Suite 400
Dublin, California 94568
 
Attention:  [Title] [COMPANY TO PROVIDE]

 
1. Exercise of Option.  Effective as of today, ________________, _____, the
undersigned (“Purchaser”) hereby elects to purchase ______________ shares (the
“Shares”) of the Common Stock of Taleo Corporation (the “Company”) under and
pursuant to the 2009 Equity Incentive Plan (the “Plan”) and the Stock Option
Agreement dated, _____ (the “Option Agreement”).  Subject to adjustment in
accordance with Section 15 of the Plan, the purchase price for the Shares shall
be $_____, as required by the Option Agreement.
 
2. Delivery of Payment.  Purchaser herewith delivers to the Company the full
purchase price for the Shares and any required tax withholding to be paid in
connection with the exercise of the Option.
 
3. Representations of Purchaser.  Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
 
4. Rights as Shareholder.  Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Shares subject to the
Option, notwithstanding the exer­cise of the Option.  The Shares so acquired
shall be issued to Purchaser as soon as practicable after exercise of the
Option.  No adjustment will be made for a divi­dend or other right for which the
record date is prior to the date of issuance, except as pro­vided in Sec­tion 15
of the Plan.
 
5. Tax Consultation.  Purchaser understands that Purchaser may suffer adverse
tax consequences as a result of Purchaser's purchase or disposition of the
Shares.  Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
dis­position of the Shares and that Purchaser is not relying on the Company for
any tax advice.
 
6. Entire Agreement; Governing Law.  The Plan and Option Agreement are
incorporated herein by reference.  This Exercise Notice, the Plan and the 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 Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser.  This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.
 
Submitted
by:                                                                                     Accepted
by:
 
PURCHASER:                                                                           TALEO
CORPORATION

__

       
Signature
 
By
         
Print Name
 
Its
         
Address:
 
Address:
                                       
Date Received