exv10w3





 Exhibit 10.3 


INTERWOVEN, INC.

EMPLOYEE STOCK PURCHASE PLAN



As Amended and Restated by the Board on April 17, 2008



     1. Establishment of Plan. Interwoven, Inc. (the “Company”) originally established this
Employee Stock Purchase Plan (this “Plan”) in 1999 and amended and restated the Plan in 2008. For
purposes of this Plan, “Parent Corporation” and “Subsidiary” shall have the same meanings as
“parent corporation” and “subsidiary corporation” in Sections 424(e) and 424(f), respectively, of
the Internal Revenue Code of 1986, as amended (the “Code”). “Participating Subsidiaries” are
Parent Corporations or Subsidiaries that the Board of Directors of the Company (the “Board”)
designates from time to time as corporations that shall participate in this Plan. The Company
intends this Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code
(including any amendments to or replacements of such Section), and this Plan shall be so construed.
Any term not expressly defined in this Plan but defined for purposes of Section 423 of the Code
shall have the same definition herein. A total of 3,000,000 shares of the Company’s Common Stock
were reserved for issuance under this amended and restated Plan when originally adopted (taking
into account splits of the Company’s Common Stock). In addition, on each January 1, the aggregate
number of shares of the Company’s Common Stock reserved for issuance under the Plan shall be
increased automatically by a number of shares equal to 1% of the total number of outstanding shares
of the Company Common Stock on the immediately preceding December 31; provided that the
aggregate number of shares issued over the term of this Plan shall not exceed 6,000,000 shares.
Such number shall be subject to adjustments effected in accordance with Section 14 of this Plan.



     2. Purpose. The purpose of this Plan is to provide eligible employees of the Company and
Participating Subsidiaries with a convenient means of acquiring an equity interest in the Company
through payroll deductions, to enhance such employees’ sense of participation in the affairs of the
Company and Participating Subsidiaries, and to provide an incentive for continued employment.



     3. Administration. This Plan shall be administered by the Compensation Committee of the
Board, and subject to applicable law, the Committee may delegate authority under the plan to a
committee to administer certain provisions of the Plan as the Committee deems appropriate (the
“Committee”). Subject to the provisions of this Plan and the limitations of Section 423 of the
Code or any successor provision in the Code, all questions of interpretation or application of this
Plan shall be determined by the Committee and its decisions shall be final and binding upon all
participants. Members of the Committee shall receive no compensation for their services in
connection with the administration of this Plan, other than standard fees as established from time
to time by the Board for services rendered by Board members serving on Board committees. All
expenses incurred in connection with the administration of this Plan shall be paid by the Company.



     4. Eligibility. Any employee of the Company or the Participating Subsidiaries is eligible to
participate in an Offering Period (as hereinafter defined) under this Plan except the following:



          (a) employees who are not employed by the Company or a Participating Subsidiary (10) days
before the beginning of such Offering Period;




          (b) employees who are customarily employed for twenty (20) hours or less per week;




          (c) employees who are customarily employed for five (5) months or less in a calendar year;




          (d) employees who, together with any other person whose stock would be attributed to such
employee pursuant to Section 424(d) of the Code, own stock or hold options to purchase stock
possessing five percent (5%) or more of the total combined voting power or value of all classes of
stock of the Company or any of its Participating Subsidiaries or who, as a result of being granted
an option under this Plan with respect to such Offering Period, would own stock or hold options to
purchase stock possessing five percent (5%) or more of the total combined voting power or value of
all classes of stock of the Company or any of its Participating Subsidiaries; and




 









 








          (e) individuals who provide services to the Company or any of its Participating Subsidiaries
as independent contractors who are reclassified as common law employees for any reason
except for federal income and employment tax purposes.




     5. Offering Dates. The offering periods of this Plan (each, an “Offering Period”) shall be
of six (6) months duration commencing on May 1 and November 1 of each year and ending on April 30
and October 31 of each year. Each Offering Period shall consist of one (1) six month purchase
period (a “Purchase Period”) during which payroll deductions of the participants are accumulated
under this Plan. The first business day of each Offering Period is referred to as the “Offering
Date”. The last business day of each Purchase Period is referred to as the “Purchase Date”. The
Committee shall have the power to change the duration of Offering Periods with respect to offerings
without stockholder approval if such change is announced at least fifteen (15) days prior to the
scheduled beginning of the first Offering Period to be affected.



     6. Participation in this Plan. Eligible employees may become participants in an Offering
Period under this Plan on the first Offering Date after satisfying the eligibility requirements by
delivering a subscription agreement to the Company’s Legal Department (the “Legal Department”) not
later than five (5) days before such Offering Date. Notwithstanding the foregoing, the Committee
may set a later time for filing the subscription agreement authorizing payroll deductions for all
eligible employees with respect to a given Offering Period. An eligible employee who does not
deliver a subscription agreement to the Legal Department by such date after becoming eligible to
participate in such Offering Period shall not participate in that Offering Period or any subsequent
Offering Period unless such employee enrolls in this Plan by filing a subscription agreement with
the Legal Department not later than five (5) days preceding a subsequent Offering Date. Once an
employee becomes a participant in an Offering Period, such employee will automatically participate
in the Offering Period commencing immediately following the last day of the prior Offering Period
unless the employee withdraws or is deemed to withdraw from this Plan or terminates further
participation in the Offering Period as set forth in Section 11 below. Such participant is not
required to file any additional subscription agreement in order to continue participation in this
Plan.



     7. Grant of Option on Enrollment. Enrollment by an eligible employee in this Plan with
respect to an Offering Period will constitute the grant (as of the Offering Date) by the Company to
such employee of an option to purchase on the Purchase Date up to that number of shares of Common
Stock of the Company determined by dividing (a) the amount accumulated in such employee’s payroll
deduction account during such Purchase Period by (b) the lower of (i) eighty-five percent (85%) of
the fair market value of a share of the Company’s Common Stock on the Offering Date (but in no
event less than the par value of a share of the Company’s Common Stock), or (ii) eighty-five
percent (85%) of the fair market value of a share of the Company’s Common Stock on the Purchase
Date (but in no event less than the par value of a share of the
Company’s Common Stock), provided, however, that the number of shares of the Company’s Common Stock subject to any option granted
pursuant to this Plan shall not exceed the lesser of (x) the maximum number of shares set by the
Committee pursuant to Section 10(c) below with respect to the applicable Purchase Date, or (y) the
maximum number of shares which may be purchased pursuant to Section 10(b) below with respect to the
applicable Purchase Date. The fair market value of a share of the Company’s Common Stock shall be
determined as provided in Section 8 below.



     8. Purchase Price. The purchase price per share at which a share of Common Stock will be
sold in any Offering Period shall be eighty-five percent (85%) of the lesser of:



          (a) The fair market value on the Offering Date; or




          (b) The fair market value on the Purchase Date.




          For purposes of this Plan, the term “Fair Market Value” means, as of any Offering Date, the
value of a share of the Company’s Common Stock determined as follows:





	 	(a)	 	if such Common Stock is then quoted on the NASDAQ Global Market,
its closing price on the NASDAQ Global Market on the business day immediately
prior to the Offering Date as reported in The Wall Street Journal;





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	 	(b)	 	if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the business day immediately
prior to the Offering Date on
the principal national securities exchange on which the Common Stock is
listed or admitted to trading as reported in The Wall Street Journal;
	 
	 	(c)	 	if such Common Stock is publicly traded but is not quoted on the
NASDAQ Global Market nor listed or admitted to trading on a national securities
exchange, the average of the closing bid and asked prices on the business day
immediately prior to the Offering Date as reported in The Wall Street
Journal; or
	 
	 	(d)	 	if none of the foregoing is applicable, then by the Board in good
faith.





     9. Payment of Purchase Price; Changes in Payroll Deductions; Issuance of Shares.



          (a) The purchase price of the shares is accumulated by regular payroll deductions made during
each Offering Period. The deductions are made as a percentage of the participant’s compensation in
one percent (1%) increments not less than two percent (2%), nor greater than fifteen percent (15%)
or such lower limit set by the Committee. Compensation shall mean all W-2 cash compensation,
including, but not limited to, base salary, wages, commissions, overtime, shift premiums and
bonuses, plus draws against commissions, provided, however, that for purposes of
determining a participant’s compensation, any election by such participant to reduce his or her
regular cash remuneration under Sections 125 or 401(k) of the Code shall be treated as if the
participant did not make such election. Payroll deductions shall commence on the first payday of
the Offering Period and shall continue to the end of the Offering Period unless sooner altered or
terminated as provided in this Plan.




          (b) A participant may decrease the rate of payroll deductions during an Offering Period by
filing with the Legal Department a new authorization for payroll deductions, in which case the new
rate shall become effective for the next payroll period commencing more than fifteen (15) days
after the Legal Department’s receipt of the authorization and shall continue for the remainder of
the Offering Period unless changed as described below. Such change in the rate of payroll
deductions may be made at any time during an Offering Period, but not more than one (1) change may
be made effective during any Purchase Period. A participant may increase or decrease the rate of
payroll deductions for any subsequent Offering Period by filing with the Legal Department a new
authorization for payroll deductions not later than fifteen (15) days before the beginning of such
Offering Period.




          (c) A participant may reduce his or her payroll deduction percentage to zero during an
Offering Period by filing with the Legal Department a request for cessation of payroll deductions.
Such reduction shall be effective beginning with the next payroll period commencing more than
fifteen (15) days after the Legal Department’s receipt of the request and no further payroll
deductions will be made for the duration of the Offering Period. Payroll deductions credited to
the participant’s account prior to the effective date of the request shall be used to purchase
shares of Common Stock of the Company in accordance with Section (e) below. A participant may not
resume making payroll deductions during the Offering Period in which he or she reduced his or her
payroll deductions to zero.




          (d) All payroll deductions made for a participant are credited to his or her account under
this Plan and are deposited with the general funds of the Company. No interest accrues on the
payroll deductions. All payroll deductions received or held by the Company may be used by the
Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll
deductions.




          (e) On each Purchase Date, so long as this Plan remains in effect and provided that the
participant has not submitted a signed and completed withdrawal form before that date which
notifies the Company that the participant wishes to withdraw from that Offering Period under this
Plan and have all payroll deductions accumulated in the account maintained on behalf of the
participant as of that date returned to the participant, the Company shall apply the funds then in
the participant’s account to the purchase of whole shares of Common Stock reserved under the option
granted to such participant with respect to the Offering Period to the extent that such option is
exercisable on the Purchase Date. The purchase price per share shall be as specified in Section 8
of this Plan. Any cash remaining in a participant’s account after such purchase of shares shall be
refunded to such participant in cash, without interest; provided, however that any amount remaining
in such participant’s account on a Purchase Date which is less than the amount necessary to
purchase a full share of Common Stock of the Company shall be carried




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forward, without interest,
into the next Purchase Period. In the event that this Plan has been oversubscribed, all funds not
used to purchase shares on the Purchase Date shall be returned to the participant, without
interest. No Common Stock shall be
purchased on a Purchase Date on behalf of any employee whose participation in this Plan has
terminated prior to such Purchase Date.




          (f) As promptly as practicable after the Purchase Date, the Company shall issue shares for
the participant’s benefit representing the shares purchased upon exercise of his or her option.




          (g) During a participant’s lifetime, his or her option to purchase shares hereunder is
exercisable only by him or her. The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.




     10. Limitations on Shares to be Purchased.



          (a) No participant shall be entitled to purchase stock under this Plan at a rate which, when
aggregated with his or her rights to purchase stock under all other employee stock purchase plans
of the Company or any Subsidiary, exceeds $25,000 in fair market value, determined as of the
Offering Date (or such other limit as may be imposed by the Code) for each calendar year in which
the employee participates in this Plan. The Company shall automatically suspend the payroll
deductions of any participant as necessary to enforce such limit provided that when the Company
automatically resumes such payroll deductions, the Company must apply the rate in effect
immediately prior to such suspension.




          (b) On any single Purchase Date, no participant shall be entitled to purchase more than twice
the number of shares which could be purchased using eighty-five percent (85%) of the fair market
value of a share of the Company’s Common Stock on the Offering Date as the purchase price per
share.




          (c) No participant shall be entitled to purchase more than the Maximum Share Amount (as
defined below) on any single Purchase Date. Not less than thirty (30) days prior to the
commencement of any Offering Period, the Committee may, in its sole discretion, set a maximum
number of shares which may be purchased by any employee at any single Purchase Date (hereinafter
the “Maximum Share Amount”). Until otherwise determined by the Committee, there shall be no
Maximum Share Amount. In no event shall the Maximum Share Amount exceed the amounts permitted
under Section 10(b) above. If a new Maximum Share Amount is set, then all participants must be
notified of such Maximum Share Amount prior to the commencement of the next Offering Period. The
Maximum Share Amount shall continue to apply with respect to all succeeding Purchase Dates and
Offering Periods unless revised by the Committee as set forth above.




          (d) If the number of shares to be purchased on a Purchase Date by all employees participating
in this Plan exceeds the number of shares then available for issuance under this Plan, then the
Company will make a pro rata allocation of the remaining shares in as uniform a manner as shall be
reasonably practicable and as the Committee shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares to be purchased under a
participant’s option to each participant affected.




          (e) Any payroll deductions accumulated in a participant’s account which are not used to
purchase stock due to the limitations in this Section 10 shall be returned to the participant as
soon as practicable after the end of the applicable Purchase Period, without interest.




     11. Withdrawal.



          (a) Each participant may withdraw from an Offering Period under this Plan by signing and
delivering to the Legal Department a written notice to that effect on a form provided for such
purpose. Such withdrawal may be elected at any time at least fifteen (15) days prior to the end of
an Offering Period.




          (b) Upon withdrawal from this Plan, the accumulated payroll deductions shall be returned to
the withdrawn participant, without interest, and his or her interest in this Plan shall terminate.
In the event a participant voluntarily elects to withdraw from this Plan, he or she may not resume
his or her participation in this Plan during the same Offering Period, but he or she may
participate in any Offering Period under this Plan which commences on a date subsequent to such
withdrawal by filing a new authorization for payroll deductions in the same manner as set




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forth in Section 6 above for initial participation in this Plan.




     12. Termination of Employment. Termination of a participant’s employment for any reason,
including retirement, death or the failure of a participant to remain an eligible employee of the
Company or of a Participating Subsidiary, immediately terminates his or her participation in this
Plan. In such event, the payroll deductions credited to the participant’s account will be returned
to him or her or, in the case of his or her death, to his or her legal representative, without
interest. For purposes of this Section 12, an employee will not be deemed to have terminated
employment or failed to remain in the continuous employ of the Company or of a Participating
Subsidiary in the case of sick leave, military leave, or any other leave of absence approved by the
Board; provided that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or statute.



     13. Return of Payroll Deductions. In the event a participant’s interest in this Plan is
terminated by withdrawal, termination of employment or otherwise, or in the event this Plan is
terminated by the Board, the Company shall deliver to the participant all payroll deductions
credited to such participant’s account. No interest shall accrue on the payroll deductions of a
participant in this Plan.



     14. Capital Changes. Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each option under this Plan which has not yet been
exercised and the number of shares of Common Stock which have been authorized for issuance under
this Plan but have not yet been placed under option (collectively, the “Reserves”), as well as the
price per share of Common Stock covered by each option under this Plan which has not yet been
exercised, shall be proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock of the Company resulting from a stock split or the payment
of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number
of issued and outstanding shares of Common Stock effected without receipt of any consideration by
the Company; provided, however, that conversion of any convertible securities of the Company shall
not be deemed to have been “effected without receipt of consideration”. Such adjustment shall be
made by the Committee, whose determination shall be final, binding and conclusive. Except as
expressly provided herein, no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock subject to an option.



     In the event of the proposed dissolution or liquidation of the Company, the Offering Period
will terminate immediately prior to the consummation of such proposed action, unless otherwise
provided by the Committee. The Committee may, in the exercise of its sole discretion in such
instances, declare that this Plan shall terminate as of a date fixed by the Committee and give each
participant the right to purchase shares under this Plan prior to such termination. In the event
of (i) a merger or consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a
different jurisdiction, or other transaction in which there is no substantial change in the
stockholders of the Company or their relative stock holdings and the options under this Plan are
assumed, converted or replaced by the successor corporation, which assumption will be binding on
all participants), (ii) a merger in which the Company is the surviving corporation but after which
the stockholders of the Company immediately prior to such merger (other than any stockholder that
merges, or which owns or controls another corporation that merges, with the Company in such merger)
cease to own their shares or other equity interest in the Company, (iii) the sale of all or
substantially all of the assets of the Company or (iv) the acquisition, sale, or transfer of more
than 50% of the outstanding shares of the Company by tender offer or similar transaction, the Plan
will continue with regard to any Offering Period that commenced prior to the closing of the
proposed transaction and shares will be purchased based on the Fair Market Value of the surviving
corporation’s stock on each Purchase Date, unless the Committee determines the final Purchase Date
under all then-ongoing Offering Periods shall be accelerated to an earlier date.



     The Committee may, if it so determines in the exercise of its sole discretion, also make
provision for adjusting the Reserves, as well as the price per share of Common Stock covered by
each outstanding option, in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of shares of its outstanding
Common Stock, or in the event of the Company being consolidated with or merged into any other
corporation.



     15. Nonassignability. Neither payroll deductions credited to a participant’s account nor any
rights with regard to the exercise of an option or to receive shares under this Plan may be
assigned, transferred, pledged or oth-



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erwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 22
below) by the participant. Any such attempt at assignment, transfer, pledge or other disposition
shall be void and without effect.




     16. Reports. Individual accounts will be maintained for each participant in this Plan. Each
participant shall receive promptly after the end of each Purchase Period a report of his or her
account setting forth the total payroll deductions accumulated, the number of shares purchased, the
per share price thereof and the remaining cash balance, if any, carried forward to the next
Purchase Period or Offering Period, as the case may be.



     17. Notice of Disposition. Each participant shall notify the Company in writing if the
participant disposes of any of the shares purchased in any Offering Period pursuant to this Plan if
such disposition occurs within two (2) years from the Offering Date or within one (1) year from the
Purchase Date on which such shares were purchased (the “Notice Period”). The Company may, at any
time during the Notice Period, place a legend or legends on any certificate representing shares
acquired pursuant to this Plan requesting the Company’s transfer agent to notify the Company of any
transfer of the shares. The obligation of the participant to provide such notice shall continue
notwithstanding the placement of any such legend on the certificates.



     18. No Rights to Continued Employment. Neither this Plan nor the grant of any option
hereunder shall confer any right on any employee to remain in the employ of the Company or any
Participating Subsidiary, or restrict the right of the Company or any Participating Subsidiary to
terminate such employee’s employment.



     19. Equal Rights And Privileges. All eligible employees shall have equal rights and
privileges with respect to this Plan so that this Plan qualifies as an “employee stock purchase
plan” within the meaning of Section 423 or any successor provision of the Code and the related
regulations. Any provision of this Plan which is inconsistent with Section 423 or any successor
provision of the Code shall, without further act or amendment by the Company, the Committee or the
Board, be reformed to comply with the requirements of Section 423; provided however, that any
Offering Period established solely for participation of employees of a Participating Subsidiary who
are all resident outside the United States of America may have provisions inconsistent with Section
423. This Section 19 shall take precedence over all other provisions in this Plan.



     20. Notices. All notices or other communications by a participant to the Company under or in
connection with this Plan shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.



     21. Term;
Stockholder Approval. Increases to the maximum number of shares
that may be issued under this Plan (set forth in Section 1 above) shall be approved by the
stockholders of the Company, in any manner permitted by applicable corporate law, within twelve
(12) months before or after the date such increase is approved by the Board. This Plan shall continue
until the earlier to occur of (a) termination of this Plan by the Board (which termination may be
effected by the Board at any time); (b) issuance of all of the shares of Common Stock reserved for
issuance under this Plan; or ten (10) years from the date of
adoption by the Board of this Plan as amended and restated.



     22. Designation of Beneficiary.



          (a) A participant may file a written designation of a beneficiary who is to receive any
shares and cash, if any, from the participant’s account under this Plan in the event of such
participant’s death subsequent to the end of a Purchase Period but prior to delivery to him of such
shares and cash. In addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant’s account under this Plan in the event of such
participant’s death prior to a Purchase Date.




          (b) Such designation of beneficiary may be changed by the participant at any time by written
notice. In the event of the death of a participant and in the absence of a beneficiary validly
designated under this Plan who is living at the time of such participant’s death, the Company shall
deliver such shares or cash to the executor or administrator of the estate of the participant, or
if no such executor or administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such shares or cash to the spouse or to any one or more
dependents or relatives of the participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.




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     23. Conditions Upon Issuance of Shares; Limitation on Sale of Shares. Shares shall not be
issued with respect to an option unless the exercise of such option and the issuance and delivery
of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or
foreign, including, without limitation, the Securities Act, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements of any stock
exchange or automated quotation system upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such compliance.



     24. Applicable Law. The Plan shall be governed by the substantive laws (excluding the
conflict of laws rules) of the State of California.



     25. Amendment or Termination of this Plan. The Board may at any time amend, terminate or
extend the term of this Plan, except that any such termination cannot affect options previously
granted under this Plan, nor may any amendment make any change in an option previously granted
which would adversely affect the right of any participant, nor may any amendment be made without
approval of the stockholders of the Company obtained in accordance with Section 21 above within
twelve (12) months of the adoption of such amendment (or earlier if required by Section 21) if such
amendment would:



     (a) increase the number of shares that may be issued under this Plan; or



     (b) change the designation of the employees (or class of employees) eligible for participation
in this Plan.



     Notwithstanding the foregoing, the Board may make such amendments to the Plan as the Board
determines to be advisable, if the Board determines that continuation of the Plan or any Offering
Period has unfavorable financial accounting treatment for the Company.




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