exv10w2



 



EXHIBIT 10.2




FORM OF STOCK OPTION AGREEMENT




STOCK OPTION AGREEMENT



This Stock Option Agreement (“Agreement”) is by and between Manugistics Group,
Inc., a Delaware corporation (the “Company”), and Jeremy P. Coote, an
individual with an address at 109 Brooke Farm Road, St. Davids, Pennsylvania
19087 (the “Employee”).




BACKGROUND



The Employee was employed by the Company as its President pursuant to the terms
of that certain letter agreement dated June 19, 2003, and effective June 23,
2003, between the Employee, the Company and Manugistics, Inc. (“Manugistics”),
a Delaware corporation and wholly-owned subsidiary of the Company (the
“Employment Letter”). In order to provide the Employee with a direct
proprietary interest in the future success of the Company and to encourage the
Employee to achieve maximum performance with the Company, the Board of
Directors of the Company granted to the Employee on June 20, 2003, as provided
in the Employment Letter, two options each to purchase 200,000 shares of Common
Stock of the Company (the “Shares”) at a price of Five Dollars and Fifty-three
and one half Cents ($5.535) per share, on the terms and subject to the
conditions described herein, effective June 23, 2003, the date he became
employed (the “Date of Grant”). This Agreement reflects the grant of these
options as approved by the Board of Directors.



This Agreement shall be operated and administered by the Compensation Committee
of the Board of Directors of the Company (the “Committee”).





	 	 	 	NOW, THEREFORE, in view of the foregoing, and in consideration of the
premises herein contained, and each intending to be legally bound
hereby, the parties agree as follows:



1.     Grant of Options; Payment of Exercise Price.





	 	 	a. The Company has granted to the Employee the right and option to
purchase under the terms and conditions set forth below:





		
	 	     (i) Two hundred thousand (200,000) shares of the Company’s common
stock at a price of Five Dollars and Fifty-three and one half Cents
($5.535) per share (the “Purchase Price”) (the “First Performance
Option”); and
	 
	 	     (ii) Two hundred thousand (200,000) shares of the
Company’s common stock, at the Purchase Price (the “Second
Performance Option” and together with the First Performance
Option the “Performance Options” and each individually the
“Performance Option”).



 







 




	 	 	b. Each of the Performance Options may be exercised, in whole or in part
as to a minimum of 50 shares or, if fewer, the total number of shares
subject to the Performance Option, by giving written notice of exercise
to the Company specifying the number of Shares to be purchased. Such
notice shall be accompanied by payment in full of the Purchase Price,
plus any required federal, state and/or local withholding taxes, in cash,
or, with the prior approval of the Committee, in shares of common stock
of the Company already owned by the Employee with such shares valued at
their Fair Market Value. For such purposes, “Fair Market Value” shall be
defined as the closing price of the common stock of the Company on the
day immediately preceding the exercise date as reported on the Nasdaq
System. The Employee may also simultaneously exercise a Performance
Option (or a part thereof) and sell all or part of the Shares thereby
acquired pursuant to any arrangement then in effect between any broker
and the Company, and use the proceeds from such sale to pay the exercise
price and withholding taxes. All actions with respect to the Performance
Options are subject to compliance with the tax and securities laws and
any applicable blackout or insider trading prohibitions of the Company.



2.     Terms and Exercise of Options.





	 	 	a. Term and Vesting. Each of the Performance Options shall have a term
of ten years from the date hereof, and, except as otherwise expressly
provided herein, shall vest as follows:





		
	 	     (i) The First Performance Option shall vest on the earlier of: (y)
the last day of the first consecutive four quarter period in which the
Company achieves an Adjusted Operating Margin (as defined in Paragraph 2f
below) of 10% or higher in each quarter or (z) June 23, 2010; and
	 
	 	     (ii) The Second Performance Option shall vest on the earlier of:
(y) the last day of the first consecutive two quarter period in which the
Company recognizes and records total revenue, worldwide, of $90 million
or more in each quarter or (z) June 23, 2010.





	 	 	In order to vest in a particular Performance Option as described above,
the Employee must be employed full-time by Manugistics during the entire
period from the Date of Grant through the vesting date specified with
respect to that particular Performance Option.
	 
	 	 	b. Disability. The Employee will be conclusively presumed to have become
disabled if the Employee shall have been unable to fully discharge his
responsibilities under the Employment Letter for a period of six (6)
consecutive months because of his physical or mental illness or
infirmity, as determined in good faith by Manugistics based upon the
Employee’s eligibility for long term disability. In this event, any
Performance Option which is vested on the date the Employee is
conclusively presumed disabled shall be exercisable for a period of one
(1) year from such date, after which it shall terminate, and any
Performance Option which is not vested on the date the Employee
conclusively presumed disabled shall be forfeited.



 







 




	 	 	c. Death. If the Employee dies while a Manugistics’ employee, any
Performance Option which is vested on the date of the Employee’s death
shall continue to be exercisable by the Employee’s heirs or estate for a
period of one (1) year from the Employee’s date of death, after which it
shall terminate, and any Performance Option which is not vested on the
Employee’s date of death shall be forfeited.
	 
	 	 	d. Termination Without Cause; Termination with Good Reason. If
Manugistics terminates the Employee’s employment for any reason other
than Cause (as defined in Paragraph 2f below) or the Employee terminates
his employment for Good Reason (as defined in Paragraph 2f below), the
Performance Options will stop vesting on the date the Employee’s
severance period (as defined in Employment letter) ends. Any Performance
Option which is vested on the date the Employee’s severance period ends
shall be exercisable for a period of thirty (30) days following such
date, after which it shall terminate (provided that if such thirty (30)
day period would commence during a Company imposed blackout period, then
the Company shall extend the exercise period for a period of thirty (30)
days following the cessation of such Company imposed blackout period) and
any Performance Option which is not vested on the date the Employee’s
severance period ends shall be forfeited. The continuation of vesting
during the Employee’s severance period is conditioned upon the Employee’s
execution of a severance agreement and full release of claims provided by
Manugistics and/or the Company in substantially the form used by
Manugistics at the time of the signing of the Employment Letter.
	 
	 	 	e. Termination for Cause; Voluntary Termination. If Manugistics
terminates the Employee’s employment for Cause or the Employee terminates
his employment without Good Reason, any Performance Option which is
vested on the Employee’s date of termination shall continue to be
exercisable for a period of thirty (30) days following the Employee’s
date of termination, after which it shall terminate (provided that if
such thirty (30) day period would commence during a Company imposed
blackout period, then the Company shall extend the exercise period for a
period of thirty (30) days following the cessation of such Company
imposed blackout period), and any Performance Option which is not vested
on the Employee’s date of termination shall be forfeited.
	 
	 	 	f. Definitions. For the purposes of this Agreement:





		
	 	     (i) “Adjusted Operating Margin” shall be defined as Operating Margin
calculated in accordance with GAAP, but excluding amortization of
intangibles and acquired technology, goodwill impairment charge,
restructuring and other impairment charges, purchased research and
development charges related to acquisitions, non-cash stock compensation
charges or benefits, settlement of a lawsuit, or impairment of an
investment.
	 
	 	     (ii) “Cause” shall mean any one or more of the following, as
determined in good faith by Manugistics, which is not cured by the
Employee within ten (10) days’ written notice from Manugistics of its
determination: (w) gross or willful misconduct injurious to Manugistics,
the Company, or any of their subsidiaries, divisions or affiliates, (x)
an act of dishonesty that has a material adverse impact on Manugistics,
the Company, or any of their subsidiaries, divisions or affiliates, (y)
an act of insubordination that has a material adverse impact on
Manugistics, the Company, or any of their subsidiaries, divisions or
affiliates; or (z) conviction of a felony.



 







 




		
	 	     (iii) “Good Reason” shall mean, as reasonably determined by the
Employee, any of the following events that are not consented to by the
Employee: (y) any substantial reduction in the Employee’s Base Salary
(as defined in the Employment Letter) or bonus opportunity (as set forth
in the Employment Letter) that does not apply generally to substantially
all executive officers of the Company or (z) any change in the Employee’s
title or position from either of the titles or positions set forth in the
Employment Letter, unless such change occurs in connection with a change
of control, as defined in Paragraph 2g below.





	 	 	g. Change of Control. In the event that the Company has a change of
control, which is defined as fifty-one percent (51%) of the Company’s
voting stock having a change in ownership: (i) if the Employee’s
responsibilities are not affected, fifty percent (50%) of the outstanding
Performance Options shall immediately vest; (ii) if the Employee’s
responsibilities are significantly diminished or the Employee is actually
or constructively terminated other than for Cause, i.e., the Employee’s
responsibilities no longer consist of those reasonably associated with
the position of President, one hundred percent (100%) of the outstanding
Performance Options shall immediately vest. The number of option shares
vesting shall be determined by multiplying the original number of option
shares granted which are still outstanding by the applicable percentage.
A change in ownership of “fifty-one percent (51%) of the Company’s voting
stock” shall mean a change in ownership as a result of a single purchase
or series of related purchases by a single purchaser or a group of
purchasers acting in concert by way of merger, consolidation or
otherwise. The change of control rights granted herein are in addition to
the rights granted under Paragraph 4b below.
	 
	 	 	h. Exercisability. Each of the Performance Options may only be exercised
during the ten year term hereof and only to the extent the Performance
Option is vested. In no event may a Performance Option be exercised
after the expiration of the ten year term hereof. Except as otherwise
expressly provided in this Agreement, no Performance Option may be
exercised unless the Employee is employed by the Company at the time of
exercise, and may only be exercised by the following persons, under the
following conditions, and in all cases subject to all provisions of this
Agreement: (i) by the Employee, (ii) by the Employee’s Permitted
Transferees (as defined and in the manner provided below in Paragraph
2i), or (iii) if the Employee shall become disabled or die, and shall not
have fully exercised the Performance Option, by the Employee or by the
executors or administrators of the Employee or by any person or persons
who shall have acquired the Performance Option directly from the Employee
by bequest or inheritance. Notwithstanding the foregoing, a Performance
Option may be exercised only to the extent that the Performance Option is
vested pursuant to the terms of this Agreement.
	 
	 	 	i. Transferability. Except as provided herein, no part of a Performance
Options, and no right or interest therein, shall be (i) assignable,
alienable or transferable by the Employee, except by will or the laws of
descent and distribution, or (ii) subject to any obligation, or the lien
or claims of any creditor of the Employee, or (iii) subject to any lien,
encumbrance or claim of any party made in respect of or through the
Employee, however arising. During the lifetime of the Employee, the
Performance Options are exercisable only by, and the Shares issued upon
the exercise of a Performance Option will be issued only to, the
Employee, his Permitted Transferees (as defined below), or his



 







 





	 	 	legal representative. Notwithstanding the foregoing, the Employee may
transfer all or a portion of the Performance Options; provided, that in
no event shall any transfer be made to any person or persons other than
the Employee’s parents, spouse or other life partner, children or
grandchildren, siblings, or children of siblings, or a trust for the
exclusive benefit of the Employee or any one or more such persons (each a
“Permitted Transferee”), which transfer must be made as a gift and
without any consideration, or pursuant to a qualified domestic relations
order. All other transfers and any retransfer by any Permitted
Transferee are prohibited and any such purported transfer shall be null
and void. The Performance Options and the Employee shall continue to be
subject to the same terms and conditions as were in effect immediately
prior to such permitted transfer. The Employee shall remain responsible
to the Company for the payment of all withholding taxes incurred as a
result of any exercise of any Performance Option. In no event shall any
permitted transfer of a Performance Option create any right in any party
in respect of the Performance Option, other than the right of the
Permitted Transferee to exercise the Performance Option to the extent the
Employee could have exercised the Performance Option had such transfer
not occurred.



3.     Recapitalization. Subject to any required action by the stockholders of the
Company, the number of Shares which may be purchased at any time under the
Performance Options, and the price per share therefor, shall be proportionately
adjusted for any increase or decrease in the number of outstanding shares of
the common stock of the Company resulting from a subdivision or consolidation
of shares or the payment of a stock dividend (but only on the common stock) or
any other increase or decrease in the number of such shares effected without
receipt of consideration by the Company, such that, upon exercise of the
Performance Option from time to time thereafter, the Employee shall be entitled
to receive such number of Shares as he would have received had the Performance
Option been exercised prior to such action.



4.     Consolidation; Merger; Dissolution and Conversion.





	 	 	a. Subject to any required action by the
stockholders of the Company, if the
Company shall be the surviving
corporation in any merger or
consolidation while any part of a
Performance Option remains unexercised,
such unexercised part of the
Performance Option shall pertain to and
apply to the securities to which a
holder of the number of Shares subject
hereto would have been entitled (i.e.,
the Employee shall be entitled to
purchase such number of securities as
he would have received had the
Performance Option been exercised prior
to such merger or consolidation).
	 
	 	 	b. In the event of a dissolution or
liquidation of the Company or a merger
or consolidation in which the Company
is not the surviving corporation, the
Employee shall, in such event, have the
right, immediately prior to such
dissolution, liquidation, merger or
consolidation, to exercise the
Performance Options in whole or in part
without regard to the provisions of
Paragraph 2a above, unless the
Performance Options are assumed by the
surviving or acquiring corporation, or
its parent.
	 
	 	 	c. In the event of a change in the common stock of the Company as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any
such change shall be deemed to be Shares within the meaning of the
Performance Options.



 







 


5.     Failure to Exercise. If the Employee fails to exercise any part of a
Performance Option in accordance with the terms of this Agreement within the
period set forth in Paragraph 2h above, then such part and all rights attached
thereto shall automatically and immediately terminate without notice. This
Agreement does not impose any obligation on the Employee to exercise the
Performance Options or any part thereof nor does it modify the other terms of
Employee’s employment set forth in the Employment Letter. The Employee shall
have no rights as a stockholder of the Company with respect to the Shares
covered by the Performance Option unless and except to the extent that the
Performance Option shall have been validly exercised.



6.     Notices. Any and all notices or other writings, which are required to be
served, or which may be served under the provisions of this Agreement, shall be
in writing, and shall be sufficiently served if delivered personally or mailed
by registered or certified mail (return receipt requested), postage prepaid, to
the parties at the addresses set forth on the first page of this Agreement, or
at such other address for a party as shall be specified by like notice;
provided, that notices of a change of address shall be effective only upon
receipt thereof. If mailed as aforesaid, three (3) days after the date of
mailing shall be the date notice shall be deemed to have been received.



7.     Entire Agreement. This Agreement and the Employment Letter constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof, and supersede all prior and contemporaneous agreements, understandings
and discussions, whether written or oral between the parties and may be amended
only by a written document signed by the parties hereto.



8.     Governing Law. This Agreement shall be governed by and construed under the
laws of the State of Delaware, without reference to principles of conflicts of
laws.



9.     Headings. The headings and captions contained herein are for convenience
only and shall not control or affect the meaning or construction of any
provision hereof.



10.     Corporate Action. No provision of this Agreement shall be construed as
altering the Employee’s status as an employee at will, or to prevent the
Company from taking any corporate action deemed by the Company to be
appropriate or in its best interest, whether or not such action could have an
adverse effect on the Performance Options, and neither the Employee or the
Employee’s estate, personal representative, beneficiary or Permitted Transferee
shall have any claim against the Company as a result of taking such action.



11.     Administration. This Agreement shall be administered by the Committee. The
Committee shall have the full power and authority to operate and administer
this Agreement in accordance with its terms. Any determination, decision or
action of the Committee in connection with the construction, interpretation,
administration or application of this Agreement shall be final, conclusive and
binding on the Employee, and all persons claiming through the Employee,
affected thereby.



12.     Indemnification
of Committee Members. In addition to such other rights of
indemnification as they may have as members of the Board of Directors or the
Committee, the members of the Committee shall be indemnified by the Company
against all costs and expenses reasonably incurred by them in connection with
any action, suit or proceeding to which they or


 







 




any of them may be party by reason of any action taken or failure to act under
or in connection with the Agreement, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding; provided, however, that any such
Committee member shall be entitled to the indemnification rights set forth in
this Paragraph 12 only if such member has acted in good faith and in a manner
that such member reasonably believed to be in or not opposed to the best
interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that such conduct was unlawful,
and further provided that upon the institution of any such action, suit or
proceeding a Committee member shall give the Company written notice thereof and
an opportunity to handle and defend the same before such Committee member
undertakes to handle and defend it on his own behalf.



IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.




	 	 	 	 
	MANUGISTICS GROUP, INC.  
	 	 	 
	By:	 	
/s/ Raghavan Rajaji
	 	 	


	 	 	
Raghavan Rajaji

Chief Financial Officer and Executive Vice President
	 	 	 
	EMPLOYEE:
	 	 	 
	/s/ Jeremy P. Coote


Jeremy P. Coote