exv10w2



 





Exhibit 10.2




 DemandTec, Inc.




1999 Equity Incentive Plan




Adopted December 1, 1999

Approved By Stockholders December 1, 1999

Amended November 3, 2000, March 29, 2001,

May 11, 2001, July 13, 2001, August 10, 2001,

September 7, 2001, December 14, 2001

March 15, 2002, March 21, 2003, December 12, 2003

March 19, 2004, November 5, 2004

February 11, 2005, December 2, 2005,

March 24, 2006, September 19, 2006, December 20,
2006,

March 20, 2007 and May 10, 2007

Termination Date: December 1, 2009




1. Purposes.




     (a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the
Employees, Directors and Consultants of the Company and its Affiliates.



     (b) Available Stock Awards. The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.



     (c) General Purpose. The Company, by means of the Plan, seeks to retain the services of the
group of persons eligible to receive Stock Awards, to secure and retain the services of new members
of this group and to provide incentives for such persons to exert maximum efforts for the success
of the Company and its Affiliates.



2. Definitions.




     (a) “Affiliate” means any parent corporation or subsidiary corporation of the Company, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of
the Code.



     (b) “Board” means the Board of Directors of the Company.



     (c) “Code” means the Internal Revenue Code of 1986, as amended.



     (d) “Committee” means a committee of one or more members of the Board appointed by the Board
in accordance with subsection 3(c).



     (e) “Common Stock” means the common stock of the Company.



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     (f) “Company” means DemandTec, Inc., a Delaware corporation.



     (g) “Consultant” means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or
(ii) who is a member of the Board of Directors of an Affiliate. However, the term “Consultant”
shall not include either Directors who are not compensated by the Company for their services as
Directors or Directors who are merely paid a director’s fee by the Company for their services as
Directors.



     (h) “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The
Participant’s Continuous Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participant’s Continuous
Service. For example, a change in status from an Employee of the Company to a Consultant of an
Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or
the chief executive officer of the Company, in that party’s sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of absence approved by
that party, including sick leave, military leave or any other personal leave.



     (i) “Covered Employee” means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to
stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.



     (j) “Director” means a member of the Board of Directors of the Company.



     (k) “Disability” means (i) before the Listing Date, the inability of a person, in the opinion
of a qualified physician acceptable to the Company, to perform the major duties of that person’s
position with the Company or an Affiliate of the Company because of the sickness or injury of the
person and (ii) after the Listing Date, the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.



     (l) “Employee” means any person employed by the Company or an Affiliate. Mere service as a
Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to
constitute “employment” by the Company or an Affiliate.



     (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     (n) “Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:



          (i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no

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sales were reported) as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as the Board deems
reliable.




          (ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.




          (iii) Prior to the Listing Date, the value of the Common Stock shall be determined in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of Regulations.




     (o) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.



     (p) “Listing Date” means the first date upon which any security of the Company is listed (or
approved for listing) upon notice of issuance on any securities exchange or designated (or approved
for designation) upon notice of issuance as a national market security on an interdealer quotation
system if such securities exchange or interdealer quotation system has been certified in accordance
with the provisions of Section 25100(o) of the California Corporate Securities Law of 1968.



     (q) “Non-Employee Director” means a Director who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or
in any capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction as to which disclosure
would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship
as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise
considered a “non-employee director” for purposes of Rule 16b-3.



     (r) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock
Option.



     (s) “Officer” means (i) before the Listing Date, any person designated by the Company as an
officer and (ii) on and after the Listing Date, a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.



     (t) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant
to the Plan.



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     (u) “Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.



     (v) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.



     (w) “Outside Director” means a Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” receiving compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an “affiliated corporation” at any time and is
not currently receiving direct or indirect remuneration from the Company or an “affiliated
corporation” for services in any capacity other than as a Director or (ii) is otherwise considered
an “outside director” for purposes of Section 162(m) of the Code.



     (x) “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.



     (y) “Plan” means this DemandTec, Inc. 1999 Equity Incentive Plan.



     (z) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.



     (aa) “Securities Act” means the Securities Act of 1933, as amended.



     (bb) “Stock Award” means any right granted under the Plan, including an Option, a stock bonus
and a right to acquire restricted stock.



     (cc) “Stock Award Agreement” means a written agreement between the Company and a holder of a
Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock
Award Agreement shall be subject to the terms and conditions of the Plan.



     (dd) “Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates.



3. Administration.




     (a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).



     (b) Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:



          (i) To determine from time to time which of the persons eligible under the Plan shall be
granted Stock Awards; when and how each Stock Award shall be granted; what

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type or combination of types of Stock Award shall be granted; the provisions of each Stock
Award granted (which need not be identical), including the time or times when a person shall be
permitted to receive Common Stock pursuant to a Stock Award; and the number of shares of Common
Stock with respect to which a Stock Award shall be granted to each such person.




          (ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.




          (iii) To amend the Plan or a Stock Award as provided in Section 12.




          (iv) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company which are not in conflict with the
provisions of the Plan.




     (c) Delegation to Committee.



          (i) General. The Board may delegate administration of the Plan to a Committee or Committees
of one (1) or more members of the Board, and the term “Committee” shall apply to any person or
persons to whom such authority has been delegated. If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.
The Board may abolish the Committee at any time and revest in the Board the administration of the
Plan.




          (ii) Committee Composition when Common Stock is Publicly Traded. At such time as the Common
Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or
more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the
Board or the Committee may (1) delegate to a committee of one or more members of the Board who are
not Outside Directors the authority to grant Stock Awards to eligible persons who are either (a)
not then Covered Employees and are not expected to be Covered Employees at the time of recognition
of income resulting from such Stock Award or (b) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code and/or) (2) delegate to a committee of one or more
members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to
eligible persons who are not then subject to Section 16 of the Exchange Act.




     (d) Effect of Board’s Decision. All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.



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4. Shares Subject to the Plan.




     (a) Share Reserve. Subject to the provisions of Section 11 relating to adjustments upon
changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not
exceed in the aggregate eighteen million four hundred thirty five thousand (18,435,000)1
shares of Common Stock.



     (b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in full, the shares of
Common Stock not acquired under such Stock Award shall revert to and again become available for
issuance under the Plan. If any shares of Common Stock issued under the Plan are reacquired by the
Company pursuant to any forfeiture provision, right of repurchase or right of first refusal, such
shares shall again be available for issuance under the Plan. However, the aggregate number of
shares of Common Stock issued upon the exercise of Incentive Stock Options (including shares of
Common Stock reacquired by the Company) shall in no even exceed 200% of the number specified in
subsection (a) above. In the event that an outstanding Stock Award or other right for any reason
expires or is canceled, the shares of Common Stock allocable to the unexercised portion of such
Stock Award or other right shall not reduce the number of shares of Common Stock available for
issuance under the Plan.



     (c) Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares
or reacquired shares, bought on the market or otherwise.



     (d) Share Reserve Limitation. Prior to the Listing Date and to the extent then required by
Section 260.140.45 of Title 10 of the California Code of Regulations, the total number of shares of
Common Stock issuable upon exercise of all outstanding Options and the total number of shares of
Common Stock provided for under any stock bonus or similar plan of the Company shall not exceed the
applicable percentage as calculated in accordance with the conditions and exclusions of Section
260.140.45 of Title 10 of the California Code of Regulations, based on the shares of Common Stock
of the Company that are outstanding at the time the calculation is made.





 




			
	1	 	Reflects the initial 4,000,000 shares
approved by both the Board and stockholders on November 3, 2000, a
1,000,000-share increase approved by the Board on March 29, 2001, a
400,000-share increase approved by the Board on July 13, 2001, a 400,000-share
increase approved by the Board on August 10, 2001, a 1,200,000-share increase
approved by the Board on September 7, 2001, a 685,000-share increase approved
by the Board on December 14, 2001, a 2,000,000-share increase approved by the
Board on March 15, 2002, a 1,000,000-share increase approved by the Board on
March 21, 2003, a 750,000-share increase approved by the Board on December 12,
2003, a 2,000,000-share increase approved by the Board on March 19, 2004, a
1,000,000-share increase approved by the Board on November 5, 2004, a
2,000,000-share increase approved by the Board on February 11, 2005, a
500,000-share increase approved by the Board on December 2, 2005, a
500,000-share increase approved by the Board on March 24, 2006, a 1,000,000
share increase approved by the Board on September 19, 2006, a
2,000,000 share increase approved by the Board on December 20,
2006, a 500,000 share increase approved by the Board on
March 20, 2007 and an 850,000 share increase approved by the
Board on May 10, 2007.




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5. Eligibility.




     (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.



     (b) Ten Percent Stockholders.



          (i) A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value
of the Common Stock at the date of grant and the Option is not exercisable after the expiration of
five (5) years from the date of grant.




          (ii) Prior to the Listing Date, a Ten Percent Stockholder shall not be granted a Nonstatutory
Stock Option unless the exercise price of such Option is at least (i) one hundred ten percent
(110%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as is permitted by
Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of
the Option.




          (iii) Prior to the Listing Date, a Ten Percent Stockholder shall not be granted a restricted
stock award unless the purchase price of the restricted stock is at least (i) one hundred percent
(100%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as is permitted by
Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of
the Option.




     (c) Section 162(m) Limitation. Subject to the provisions of Section 11 relating to
adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted
Options covering more than one million (1,000,000) shares of Common Stock during any calendar year.
This subsection 5(c) shall not apply prior to the Listing Date and, following the Listing Date,
this subsection 5(c) shall not apply until (i) the earliest of: (1) the first material
modification of the Plan (including any increase in the number of shares of Common Stock reserved
for issuance under the Plan in accordance with Section 4); (2) the issuance of all of the shares of
Common Stock reserved for issuance under the Plan; (3) the expiration of the Plan; or (4) the first
meeting of stockholders at which Directors are to be elected that occurs after the close of the
third calendar year following the calendar year in which occurred the first registration of an
equity security under Section 12 of the Exchange Act; or (ii) such other date required by Section
162(m) of the Code and the rules and regulations promulgated thereunder.



     (d) Consultants.



          (i) Prior to the Listing Date, a Consultant shall not be eligible for the grant of a Stock
Award if, at the time of grant, either the offer or the sale of the Company’s securities to such
Consultant is not exempt under Rule 701 of the Securities Act (“Rule 701”) because of the nature of
the services that the Consultant is providing to the Company, or because the Consultant

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is not a natural person, or as otherwise provided by Rule 701, unless the Company determines
that such grant need not comply with the requirements of Rule 701 and will satisfy another
exemption under the Securities Act as well as comply with the securities laws of all other relevant
jurisdictions.




          (ii) From and after the Listing Date, a Consultant shall not be eligible for the grant of a
Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act
(“Form S-8”) is not available to register either the offer or the sale of the Company’s securities
to such Consultant because of the nature of the services that the Consultant is providing to the
Company, or because the Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement)
or (B) does not require registration under the Securities Act in order to comply with the
requirements of the Securities Act, if applicable, and (ii) that such grant complies with the
securities laws of all other relevant jurisdictions.




          (iii) Rule 701 and Form S-8 generally are available to consultants and advisors only if (i)
they are natural persons; (ii) they provide bona fide services to the issuer, its parents, its
majority-owned subsidiaries or majority-owned subsidiaries of the issuer’s parent; and (iii) the
services are not in connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for the issuer’s
securities.




6. Option Provisions.




     Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates will be issued for shares of Common Stock purchased on exercise of each
type of Option. The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:



     (a) Term. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no
Option granted prior to the Listing Date shall be exercisable after the expiration of ten (10)
years from the date it was granted, and no Incentive Stock Option granted on or after the Listing
Date shall be exercisable after the expiration of ten (10) years from the date it was granted.



     (b) Exercise Price of an Incentive Stock Option. Subject to the provisions of subsection 5(b)
regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option
may be granted with an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.



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     (c) Exercise Price of a Nonstatutory Stock Option. Subject to the provisions of subsection
5(b) regarding Ten Percent Stockholders, the exercise price of each Nonstatutory Stock Option
granted prior to the Listing Date shall be not less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock subject to the Option on the date the Option is granted. The
exercise price of each Nonstatutory Stock Option granted on or after the Listing Date shall be not
less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock
Option may be granted with an exercise price lower than that set forth in the preceding sentence if
such Option is granted pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.



     (d) Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the
time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the
Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company
of other Common Stock, (2) according to a deferred payment or other similar arrangement with the
Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board.
Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired
pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the
Company that have been held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes). At any time that the
Company is incorporated in Delaware, payment of the Common Stock’s “par value,” as defined in the
Delaware General Corporation Law, shall not be made by deferred payment.



     In the case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other than amounts stated to
be interest under the deferred payment arrangement.



     (e) Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.



     (f) Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option granted prior
to the Listing Date shall not be transferable except by will or by the laws of descent and
distribution and, to the extent provided in the Option Agreement, to such further extent as
permitted by Section 260.140.41(d) of Title 10 of the California Code of Regulations at the time of
the grant of the Option, and shall be exercisable during the lifetime of the Optionholder only by
the Optionholder. A Nonstatutory Stock Option granted on or after the Listing Date shall be
transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option



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does not provide for transferability, then the Nonstatutory Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.



     (g) Vesting Generally. The total number of shares of Common Stock subject to an Option may,
but need not, vest and therefore become exercisable in periodic installments that may, but need
not, be equal. The Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The provisions of this
subsection 6(g) are subject to any Option provisions governing the minimum number of shares of
Common Stock as to which an Option may be exercised.



     (h) Minimum Vesting Prior to the Listing Date. Notwithstanding the foregoing subsection 6(g),
to the extent that the following restrictions on vesting are required by Section 260.140.41(f) of
Title 10 of the California Code of Regulations at the time of the grant of the Option, then:



          (i) Options granted prior to the Listing Date to an Employee who is not an Officer, Director
or Consultant shall provide for vesting of the total number of shares of Common Stock at a rate of
at least twenty percent (20%) per year over five (5) years from the date the Option was granted,
subject to reasonable conditions such as continued employment; and




          (ii) Options granted prior to the Listing Date to Officers, Directors or Consultants may be
made fully exercisable, subject to reasonable conditions such as continued employment, at any time
or during any period established by the Company.




     (i) Termination of Continuous Service. In the event an Optionholder’s Continuous Service
terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise
his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination) but only within such period of time ending on the earlier of (i) the date
three (3) months following the termination of the Optionholder’s Continuous Service (or such longer
or shorter period specified in the Option Agreement, which period shall not be less than thirty
(30) days for Options granted prior to the Listing Date unless such termination is for cause), or
(ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after
termination, the Optionholder does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate.



     (j) Extension of Termination Date. An Optionholder’s Option Agreement may also provide that
if the exercise of the Option following the termination of the Optionholder’s Continuous Service
(other than upon the Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration requirements under
the Securities Act, then the Option shall terminate on the earlier



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of (i) the expiration of the term of the Option set forth in subsection 6(a) or (ii) the
expiration of a period of three (3) months after the termination of the Optionholder’s Continuous
Service during which the exercise of the Option would not be in violation of such registration
requirements.



     (k) Disability of Optionholder. In the event that an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in the Option
Agreement, which period shall not be less than six (6) months for Options granted prior to the
Listing Date) or (ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionholder does not exercise his or her Option within the
time specified herein, the Option shall terminate.



     (l) Death of Optionholder. In the event (i) an Optionholder’s Continuous Service terminates
as a result of the Optionholder’s death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholder’s Continuous Service
for a reason other than death, then the Option may be exercised (to the extent the Optionholder was
entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionholder’s death pursuant to subsection 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date eighteen (18) months following the date of
death (or such longer or shorter period specified in the Option Agreement, which period shall not
be less than six (6) months for Options granted prior to the Listing Date) or (2) the expiration of
the term of such Option as set forth in the Option Agreement. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate.



     (m) Early Exercise. The Option may, but need not, include a provision whereby the
Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior
to the full vesting of the Option. Subject to the “Repurchase Limitation” in subsection 10(h), any
unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the
Company or to any other restriction the Board determines to be appropriate. Provided that the
“Repurchase Limitation” in subsection 10(h) is not violated, the Company will not exercise its
repurchase option until at least six (6) months (or such longer or shorter period of time required
to avoid a charge to earnings for financial accounting purposes) have elapsed following exercise of
the Option unless the Board otherwise specifically provides in the Option.



     (n) Right of Repurchase. Subject to the “Repurchase Limitation” in subsection 10(h), the
Option may, but need not, include a provision whereby the Company may elect, prior to the Listing
Date, to repurchase all or any part of the vested shares of Common Stock acquired by the
Optionholder pursuant to the exercise of the Option. Provided that the “Repurchase



11









 







Limitation” in subsection 10(h) is not violated, the Company will not exercise its repurchase
option until at least six (6) months (or such longer or shorter period of time required to avoid a
charge to earnings for financial accounting purposes) have elapsed following exercise of the Option
unless the Board otherwise specifically provides in the Option.



     (o) Right of First Refusal. The Option may, but need not, include a provision whereby the
Company may elect, prior to the Listing Date, to exercise a right of first refusal following
receipt of notice from the Optionholder of the intent to transfer all or any part of the shares of
Common Stock received upon the exercise of the Option. Except as expressly provided in this
subsection 6(o), such right of first refusal shall otherwise comply with any applicable provisions
of the Bylaws of the Company.



     (p) Re-Load Options.



          (i) Without in any way limiting the authority of the Board to make or not to make grants of
Options hereunder, the Board shall have the authority (but not an obligation) to include as part of
any Option Agreement a provision entitling the Optionholder to a further Option (a “Re-Load
Option”) in the event the Optionholder exercises the Option evidenced by the Option Agreement, in
whole or in part, by surrendering other shares of Common Stock in accordance with this Plan and the
terms and conditions of the Option Agreement. Unless otherwise specifically provided in the Option,
the Optionholder shall not surrender shares of Common Stock acquired, directly or indirectly from
the Company, unless such shares have been held for more than six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings for financial accounting purposes).




          (ii) Any such Re-Load Option shall (1) provide for a number of shares of Common Stock equal to
the number of shares of Common Stock surrendered as part or all of the exercise price of such
Option; (2) have an expiration date which is the same as the expiration date of the Option the
exercise of which gave rise to such Re-Load Option; and (3) have an exercise price which is equal
to one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Re-Load
Option on the date of exercise of the original Option. Notwithstanding the foregoing, a Re-Load
Option shall be subject to the same exercise price and term provisions heretofore described for
Options under the Plan.




          (iii) Any such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option,
as the Board may designate at the time of the grant of the original Option; provided, however, that
the designation of any Re-Load Option as an Incentive Stock Option shall be subject to the one
hundred thousand dollar ($100,000) annual limitation on the exercisability of Incentive Stock
Options described in subsection 10(d) and in Section 422(d) of the Code. There shall be no Re-Load
Options on a Re-Load Option. Any such Re-Load Option shall be subject to the availability of
sufficient shares of Common Stock under subsection 4(a) and the “Section 162(m) Limitation” on the
grants of Options under subsection 5(c) and shall be subject to such other terms and conditions as
the Board may determine which are not inconsistent with the express provisions of the Plan
regarding the terms of Options.




12









 








7. Provisions of Stock Awards other than Options.




     (a) Stock Bonus Awards. Each stock bonus agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. The terms and conditions of stock
bonus agreements may change from time to time, and the terms and conditions of separate stock bonus
agreements need not be identical, but each stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:



          (i) Consideration. A stock bonus may be awarded in consideration for past services actually
rendered to the Company or an Affiliate for its benefit.




          (ii) Vesting. Subject to the “Repurchase Limitation” in subsection 10(h), shares of Common
Stock awarded under the stock bonus agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be determined by the Board.




          (iii) Termination of Participant’s Continuous Service. Subject to the “Repurchase Limitation”
in subsection 10(h), in the event a Participant’s Continuous Service terminates, the Company may
reacquire any or all of the shares of Common Stock held by the Participant which have not vested as
of the date of termination under the terms of the stock bonus agreement.




          (iv) Transferability. For a stock bonus award made before the Listing Date, rights to acquire
shares of Common Stock under the stock bonus agreement shall not be transferable except by will or
by the laws of descent and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant. For a stock bonus award made on or after the Listing Date,
rights to acquire shares of Common Stock under the stock bonus agreement shall be transferable by
the Participant only upon such terms and conditions as are set forth in the stock bonus agreement,
as the Board shall determine in its discretion, so long as Common Stock awarded under the stock
bonus agreement remains subject to the terms of the stock bonus agreement.




     (b) Restricted Stock Awards. Each restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. The terms and
conditions of the restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:



          (i) Purchase Price. Subject to the provisions of subsection 5(b) regarding Ten Percent
Stockholders, the purchase price under each restricted stock purchase agreement shall be such
amount as the Board shall determine and designate in such restricted stock purchase agreement. For
restricted stock awards made prior to the Listing Date, the purchase price shall not be less than
eighty-five percent (85%) of the Common Stock’s Fair Market Value

13









 








on the date such award is made or at the time the purchase is consummated. For restricted
stock awards made on or after the Listing Date, the purchase price shall not be less than
eighty-five percent (85%) of the Common Stock’s Fair Market Value on the date such award is made or
at the time the purchase is consummated.




          (ii) Consideration. The purchase price of Common Stock acquired pursuant to the restricted
stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board, according to a deferred payment or other similar arrangement with the
Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board
in its discretion; provided, however, that at any time that the Company is incorporated in
Delaware, then payment of the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.




          (iii) Vesting. Subject to the “Repurchase Limitation” in subsection 10(h), shares of Common
Stock acquired under the restricted stock purchase agreement may, but need not, be subject to a
share repurchase option in favor of the Company in accordance with a vesting schedule to be
determined by the Board.




          (iv) Termination of Participant’s Continuous Service. Subject to the “Repurchase Limitation”
in subsection 10(h), in the event a Participant’s Continuous Service terminates, the Company may
repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant
which have not vested as of the date of termination under the terms of the restricted stock
purchase agreement.




          (v) Transferability. For a restricted stock award made before the Listing Date, rights to
acquire shares of Common Stock under the restricted stock purchase agreement shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Participant only by the Participant. For a restricted stock award made
on or after the Listing Date, rights to acquire shares of Common Stock under the restricted stock
purchase agreement shall be transferable by the Participant only upon such terms and conditions as
are set forth in the restricted stock purchase agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the restricted stock purchase agreement remains
subject to the terms of the restricted stock purchase agreement.




8. Covenants of the Company.




     (a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy such Stock Awards.



     (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable



14









 







to obtain from any such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell Common Stock upon
exercise of such Stock Awards unless and until such authority is obtained.



9. Use of Proceeds from Stock.




     Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.



10. Miscellaneous.




     (a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which a Stock Award or
any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock
Award stating the time at which it may first be exercised or the time during which it will vest.



     (b) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.



     (c) No Employment or other Service Rights. Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate or (iii) the
service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the Affiliate is incorporated,
as the case may be.



     (d) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options.



     (e) Investment Assurances. The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and



15









 







risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the
Participant’s own account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares of Common Stock upon the
exercise or acquisition of Common Stock under the Stock Award has been registered under a then
currently effective registration statement under the Securities Act or (2) as to any particular
requirement, a determination is made by counsel for the Company that such requirement need not be
met in the circumstances under the then applicable securities laws. The Company may, upon advice
of counsel to the Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common Stock.



     (f) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award,
provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.



     (g) Information Obligation. Prior to the Listing Date, to the extent required by Section
260.140.46 of Title 10 of the California Code of Regulations, the Company shall deliver financial
statements to Participants at least annually. This subsection 10(g) shall not apply to key
Employees whose duties in connection with the Company assure them access to equivalent information.



     (h) Repurchase Limitation. The terms of any repurchase option shall be specified in the Stock
Award and may be either at Fair Market Value at the time of repurchase or at not less than the
original purchase price. To the extent required by Section 260.140.41 and Section 260.140.42 of
Title 10 of the California Code of Regulations at the time a Stock Award is made, any repurchase
option contained in a Stock Award granted prior to the Listing Date to a person who is not an
Officer, Director or Consultant shall be upon the terms described below:



          (i) Fair Market Value. If the repurchase option gives the Company the right to repurchase the
shares of Common Stock upon termination of employment at not less than the Fair Market Value of the
shares of Common Stock to be purchased on the date of termination of Continuous Service, then (i)
the right to repurchase shall be exercised for cash or cancellation of purchase money indebtedness
for the shares of Common Stock within ninety (90) days of termination of Continuous Service (or in
the case of shares of Common Stock issued upon exercise of Stock Awards after such date of
termination, within ninety (90) days after the date of

16









 








the exercise) or such longer period as may be agreed to by the Company and the Participant
(for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code
regarding “qualified small business stock”) and (ii) the right terminates when the shares of Common
Stock become publicly traded.




          (ii) Original Purchase Price. If the repurchase option gives the Company the right to
repurchase the shares of Common Stock upon termination of Continuous Service at the original
purchase price, then (i) the right to repurchase at the original purchase price shall lapse at the
rate of at least twenty percent (20%) of the shares of Common Stock per year over five (5) years
from the date the Stock Award is granted (without respect to the date the Stock Award was exercised
or became exercisable) and (ii) the right to repurchase shall be exercised for cash or cancellation
of purchase money indebtedness for the shares of Common Stock within ninety (90) days of
termination of Continuous Service (or in the case of shares of Common Stock issued upon exercise of
Options after such date of termination, within ninety (90) days after the date of the exercise) or
such longer period as may be agreed to by the Company and the Participant (for example, for
purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding “qualified
small business stock”).




11. Adjustments upon Changes in Stock.




     (a) Capitalization Adjustments. If any change is made in the Common Stock subject to the
Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of
securities subject to award to any person pursuant to subsection 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities and price per share
of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a transaction “without receipt of consideration”
by the Company.)



     (b) Change in Control—Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Awards shall terminate immediately prior to
such event.



     (c) Change in Control—Asset Sale, Merger, Consolidation or Reverse Merger. In the event of
(i) a sale, lease or other disposition of all or substantially all of the assets of the Company,
(ii) a merger or consolidation in which the Company is not the surviving corporation or (iii) a
reverse merger in which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise, then any surviving corporation or
acquiring corporation shall assume any Stock Awards outstanding under the Plan or shall substitute
similar stock awards (including an award to acquire the same



17









 







consideration paid to the stockholders in the transaction described in this subsection 11(c)
for those outstanding under the Plan). In the event any surviving corporation or acquiring
corporation refuses to assume such Stock Awards or to substitute similar stock awards for those
outstanding under the Plan, then with respect to Stock Awards held by Participants whose Continuous
Service has not terminated, the vesting of such Stock Awards (and, if applicable, the time during
which such Stock Awards may be exercised) shall be accelerated in full, and the Stock Awards shall
terminate if not exercised (if applicable) at or prior to such event. With respect to any other
Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised (if
applicable) prior to such event.



12. Amendment of the Plan and Stock Awards.




     (a) Amendment of Plan. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes in Common Stock, no
amendment shall be effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule
16b-3 or any Nasdaq or securities exchange listing requirements.



     (b) Stockholder Approval. The Board may, in its sole discretion, submit any other amendment
to the Plan for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to certain executive officers.



     (c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.



     (d) No Impairment of Rights. Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent
of the Participant and (ii) the Participant consents in writing.



     (e) Amendment of Stock Awards. The Board at any time, and from time to time, may amend the
terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award
shall not be impaired by any such amendment unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.



13. Termination or Suspension of the Plan.




     (a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier.
No Stock Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.



18









 





     (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the Participant.



14. Effective Date of Plan.




     The Plan shall become effective as determined by the Board, but no Stock Award shall be
exercised (or, in the case of a stock bonus, shall be granted) unless and until the Plan has been
approved by the stockholders of the Company, which approval shall be within twelve (12) months
before or after the date the Plan is adopted by the Board.



15. Choice of Law.




     The law of the State of California shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.




19










 





DEMANDTEC, INC.

1999 EQUITY INCENTIVE PLAN




STOCK OPTION AGREEMENT

(INCENTIVE AND NONSTATUTORY STOCK OPTIONS)




     Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock Option
Agreement, DemandTec, Inc. (the “Company”) has granted you an option under its 1999 Equity
Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock
indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms
not explicitly defined in this Stock Option Agreement but defined in the Plan have the same
definitions as in the Plan.



     The details of your option are as follows:



     1. Vesting. Subject to the limitations contained herein, your option will
vest as provided in your Grant Notice until the termination of your Continuous Service.



     2. Number of Shares and Exercise Price. The number of shares of Common
Stock subject to your option and your exercise price per share referenced in your Grant Notice may
be adjusted from time to time for Capitalization Adjustments, as provided in Section 11 of the
Plan.



     3. Exercise prior to Vesting (“Early Exercise”). If your option and option
shares are not fully vested at grant (see your Grant Notice) and, in that case, if permitted by
your Grant Notice (i.e., the “Exercise Schedule” indicates that “Early Exercise” of your option is
permitted), then, subject to the other provisions of your option, you may elect at any time that is
both (i) during the period of your Continuous Service and (ii) during the term of your option, to
exercise all or part of your option, including the non-vested portion of your option; provided,
however, that:



          (a) a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;




          (b) any shares of Common Stock so purchased that have not vested as of the date of exercise
shall be subject to the purchase option in favor of the Company as described in the Company’s form
of Early Exercise Stock Purchase Agreement;




          (c) you enter into that Early Exercise Stock Purchase Agreement with a vesting schedule that
will result in the same vesting as if no early exercise had occurred, and




          (d) if your option is an incentive stock option, then, as provided in the Plan, to the extent
that the total Fair Market Value (determined at the time of grant) of the shares of Common Stock
with respect to which your option plus all other incentive stock options you hold are exercisable
for the first time by you during any calendar year (under all plans of the Company and its
Affiliates) exceeds $100,000, your option(s) or portions thereof that exceed that




 









 







limit (according to the order in which they were granted) shall be treated as nonstatutory
stock options.




     4. Method of Payment. Payment of the exercise price is due in full upon
exercise of all or any part of your option. You may elect to make payment of the exercise price as
follows:



          (a) In cash or cash equivalents.




          (b) Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds.




          (c) Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock either
that you have held for the period required to avoid a charge to the Company’s reported earnings
(generally six months) or that you did not acquire, directly or indirectly from the Company, that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company.




     5. Whole Shares. You may exercise your option only for whole shares of
Common Stock.



     6. Securities Law Compliance. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common Stock issuable upon
such exercise are then registered under the Securities Act or, if such shares of Common Stock are
not then so registered, the Company has determined that such exercise and issuance would be exempt
from the registration requirements of the Securities Act. The exercise of your option must also
comply with other applicable laws and regulations governing your option, and you may not exercise
your option if the Company determines that such exercise would not be in material compliance with
such laws and regulations.



     7. Term. You may not exercise your option before the commencement of its
term or after its term expires. The term of your option commences on the Date of Grant and expires
upon the earliest of the following:



          (a) three months after the termination of your Continuous Service for any reason other than
your Disability or death, provided that if during any part of such three-month period your option
is not exercisable solely because of the condition set forth in the preceding section relating to
“Securities Law Compliance,” your option shall not expire until the earlier of the Expiration Date
or until it shall have been exercisable for an aggregate period of three months after the
termination of your Continuous Service;




2









 








          (b) 12 months after the termination of your Continuous Service due to your Disability;




          (c) 18 months after your death if you die either during your Continuous Service or within
three months after your Continuous Service terminates;




          (d) the Expiration Date indicated in your Grant Notice; or




          (e) the day before the tenth anniversary of the Date of Grant.



If your option is an incentive stock option, note that, to obtain the federal income tax advantages
associated with an “incentive stock option,” the Code requires that at all times beginning on the
date of grant of your option and ending on the day three months before the date of your option’s
exercise, you must be an employee of the Company or an Affiliate, except in the event of your death
or Disability. The Company has provided for extended exercisability of your option under certain
circumstances for your benefit but cannot guarantee that your option will necessarily be treated as
an “incentive stock option” if you continue to provide services to the Company or an Affiliate as a
Consultant or Director after your employment terminates or if you otherwise exercise your option
more than three months after the date your employment terminates.




     8. Exercise.



          (a) You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.




          (b) By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.




          (c) If your option is an incentive stock option, by exercising your option you agree that you
will notify the Company in writing within 15 days after the date of any disposition of any of the
shares of the Common Stock issued upon exercise of your option that occurs within two years after
the date of your option grant or within one year after such shares of Common Stock are
transferred upon exercise of your option.




          (d) By exercising your option you agree that the Company (or a representative of the
underwriter(s)) may, in connection with the first underwritten registration of the offering of any
securities of the Company under the Securities Act, require that you not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any shares of Common Stock or other
securities of the Company held by you, for a period of time specified by the underwriter(s) (not to
exceed 180 days) following the effective date of the registration statement of the

3









 








Company filed under the Securities Act. You further agree to execute and deliver such other
agreements as may be reasonably requested by the Company and/or the underwriter(s) that are
consistent with the foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to
your shares of Common Stock until the end of such period.




     9. Transferability. Your option is not transferable, except by will or by
the laws of descent and distribution, and is exercisable during your life only by you.
Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory
to the Company, you may designate a third party who, in the event of your death, shall thereafter
be entitled to exercise your option.



     10. Right of First Refusal. Shares of Common Stock that you acquire upon
exercise of your option are subject to any right of first refusal that may be described in the Plan
or in the Company’s bylaws in effect at such time the Company elects to exercise its right. The
Company’s right of first refusal shall expire on the Listing Date.



     11. Right of Repurchase. To the extent provided in the Plan or in Company’s
bylaws as amended from time to time, the Company shall have the right to repurchase all or any part
of the shares of Common Stock you acquire pursuant to the exercise of your option.



     12. Option not a Service Contract. Your option is not an employment or
service contract, and nothing in your option shall be deemed to create in any way whatsoever any
obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company
or an Affiliate to continue your employment. In addition, nothing in your option shall obligate
the Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or Consultant for the
Company or an Affiliate.



     13. Withholding Obligations.



          (a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
“cashless exercise” pursuant to a program developed under Regulation T as adopted by the Federal
Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal,
state, local and foreign tax or other withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option, its exercise or your option shares.




          (b) Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax or other withholding required to
be withheld by law. If the date of determination of any withholding obligation is deferred to a
date later than the date of exercise of your option, share

4









 








withholding pursuant to the preceding sentence shall not be permitted unless you make a proper
and timely election under Section 83(b) of the Code, covering the total number of shares of Common
Stock acquired upon such exercise with respect to which such determination is otherwise deferred,
to accelerate the determination of such withholding obligation to the date of exercise of your
option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld
solely from fully vested shares of Common Stock determined as of the date of exercise of your
option that are otherwise issuable to you upon such exercise. Any adverse consequences to you
arising in connection with such share withholding procedure shall be your sole responsibility.




          (c) You may not exercise your option unless the withholding obligations of the Company and/or
any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired
even though your option is otherwise exercisable, and the Company shall have no obligation to issue
a certificate for such shares of Common Stock or release such shares of Common Stock from any
escrow.




     14. Notices. Any notices provided for in your option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the case of notices
delivered by mail by the Company to you, five days after deposit in the United States mail, postage
prepaid, addressed to you at the last address you provided to the Company.



     15. Governing Plan Document. Your option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your option, and is further subject
to all interpretations, amendments, rules and regulations which may from time to time be adopted
pursuant to the Plan. In the event of any conflict between the provisions of your option and those
of the Plan, the provisions of the Plan shall control.



	 	 	 	 	 	 	 	 	 	 	 
	DemandTec, Inc.	 	Optionholder	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	 	 	Signature:	 	 	 	 
	 

	 
	 	 	 	 	 	 	 	 
	Name: Mark A. Culhane	 	Print Name:	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Title: Executive Vice President and CFO	 	 	 	 	 	 	 	 
	Date:

	 	 	 	Date:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 





5









 





DEMANDTEC, INC.

STOCK OPTION GRANT NOTICE

(1999 EQUITY INCENTIVE PLAN)



DemandTec, Inc. (the “Company”), pursuant to its 1999 Equity Incentive Plan (the “Plan”), hereby
grants to Optionholder an option to purchase the number of shares of the Company’s Common Stock set
forth below. This option is subject to all of the terms and conditions set forth herein and in the
Plan and the Notice of Exercise, both of which are attached to this Grant Notice, and the Stock
Option Agreement that the Company and Optionholder are signing in connection with this option.




	 	 	 
	Optionholder:

	 	                                                            
	Date of Grant:

	 	                                        , 200_____
	Vesting Commencement Date:

	 	                                        , 200_____
	Number of Shares Subject to Option:

	 	                                                            
	Exercise Price (Per Share):

	 	$0.                    
	Total Exercise Price:

	 	$                    
	Expiration Date:

	 	(Date of Grant + 10 Years), 20___






	 	 	 
	Type of Grant:

	 	o  Incentive Stock Option1                      o   Nonstatutory Stock Option
	 
	 	 
	Exercise Schedule:

	 	o  Same as Vesting Schedule           o  Early Exercise Permitted
	 
	 	 
	Vesting Schedule:

	 	1/8th  of the shares vest six months after the Vesting Commencement Date.
	 

	 	1/48th of the shares vest monthly thereafter over the subsequent three and one-half years.
	 
	 	 
	Payment:

	 	By cash or check
	 

	 	Pursuant to Regulation T program if the Shares are publicly traded
	 

	 	By delivery of already-owned shares if the Shares are publicly traded





Additional Terms/Acknowledgements: Optionholder acknowledges receipt of, and understands and
agrees to, this Grant Notice, the Plan and form of Notice of Exercise attached to this Grant
Notice, and the Stock Option Agreement. Optionholder further acknowledges that as of the Date of
Grant, those documents set forth the entire understanding between Optionholder and the Company
regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) any options previously granted and delivered
to Optionholder under the Plan and (ii) the following agreements only:




Other Agreements:          None




	 	 	 	 	 	 	 
	DemandTec, Inc.	 	Optionholder:	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	Name: Mark A. Culhane	 	 	 	 
	Title: Executive Vice President and CFO	 	 	 	 
	 
	 	 	 	 	 	 
	Dated as of                                         , 200__	 	Dated as of                                         , 200__	 	 





Attachments: 1999 Equity Incentive Plan and Notice of Exercise






 




			
	1	 	If this is an incentive stock option, it
(plus your other outstanding incentive stock options) cannot be first
exercisable for more than $100,000 in any calendar year. Any excess
over $100,000 is a nonstatutory stock option.