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.

  
						



 





















 


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.


 





















 


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).