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Exhibit 10.2  


 
 

PROS Holdings, Inc.
  
    1999 EQUITY INCENTIVE PLAN
  
    1. Purposes.    
    



        (a)   The purpose of the Plan is to provide a means by which selected Employees and Directors of and Consultants to the
Company, and its Affiliates, may be given an opportunity to benefit from increases in value of the stock of the Company through the granting of (i) Incentive Stock Options,
(ii) Nonstatutory Stock Options, (iii) stock bonuses, (iv) rights to purchase restricted stock, and (v) Stock Appreciation Rights, all as defined below. 


        (b)   The Company, by means of the Plan, seeks to retain the services of persons who are now Employees or Directors of or
Consultants to the Company or its Affiliates, to secure and retain the services of new Employees, Directors and Consultants, and to provide incentives for such persons to exert maximum efforts for the
success of the Company and its Affiliates. 


        (c)   The Company intends that the Stock Awards issued under the Plan shall, in the discretion of the Board or any Committee to
which responsibility for administration of the Plan has been delegated pursuant to subsection 3(c), be either (i) Options granted pursuant to Section 6 hereof, including Incentive Stock
Options and Nonstatutory Stock Options, (ii) stock bonuses or rights to purchase restricted stock granted pursuant to Section 7 hereof, or (iii) Stock Appreciation Rights granted
pursuant to Section 8 hereof. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and in such form as issued pursuant to
Section 6, and a separate certificate or certificates will be issued for shares purchased on exercise of each type of Option. 


 
 

2. Definitions.    
    


        (a)   "Affiliate" means any parent corporation or subsidiary corporation, 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 appointed by the Board in accordance with subsection 3(c) of the
Plan. 


        (e)   "Company" means PROS Holdings, Inc., a Delaware corporation. 


        (f)    "Concurrent Stock Appreciation Right" or "Concurrent
Right" means a right granted pursuant to subsection 8(b)(2) of the Plan. 



        (g)   "Consultant" means any person, including an advisor, engaged by the Company or an Affiliate to
render consulting services and who is compensated for such services, provided that the term "Consultant" shall not include Directors who are paid only a director's fee by the Company or who are not
compensated by the Company for their services as Directors. 


        (h)   "Continuous Status (or Continuous Service) as an Employee, Director or Consultant" means that the
service of an individual to the Company or any Affiliate of the Company, whether as an Employee, Director or Consultant, is not interrupted or terminated. The Board, or the chief executive officer of
the Company, may determine, in that party's sole discretion, whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted in the case of: (i) any leave of
absence approved by the Board or the chief executive officer of the Company, including sick leave, military leave, or any other personal leave; or (ii) transfers between the Company, Affiliates
or their successors. 










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


        (j)    "Director" means a member of the Board. 


        (k)   "Employee" means any person, including Officers and Directors, employed by the Company or any
Affiliate of the Company. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. 



        (l)    "Exchange Act" means the Securities Exchange Act of 1934, as amended. 


        (m)  "Fair Market Value" means, as of any date, the value of the common stock of the Company
determined as follows: 



        (1)   If the common stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq
Small Cap 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 sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Company's 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. 


        (2)   In the absence of such markets for the common stock, the Fair Market Value shall be determined in good faith by the Board
or the Committee. 




        (n)   "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. 


        (o)   "Independent Stock Appreciation Right" or "Independent
Right" means a right granted pursuant to subsection 8(b)(3) of the Plan. 



        (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. 


        (q)   "Non-Employee Director" means a Director who either (i) is not a current
Employee or Officer of the Company or its parent or subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or 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" 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 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 a stock option granted pursuant to the Plan. 


        (u)   "Option Agreement" means a written agreement between the Company and an Optionee 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)   "Optionee" 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 the 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)   "Plan" means this 1999 Equity Incentive Plan. 



        (y)   "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect with respect to the Company at the time of discretion is being exercised regarding the Plan. 


        (z)   "Securities Act" means the Securities Act of 1933, as amended. 


        (aa) "Stock Appreciation Right" means any of the various types of rights which may be granted under
Section 8 of the Plan. 


        (bb) "Stock Award" means any right granted under the Plan, including any Option, any stock bonus, any right to
purchase restricted stock, and any Stock Appreciation Right. 


        (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) "Tandem Stock Appreciation Right" or "Tandem Right" means a
right granted pursuant to subsection 8(b)(1) of the Plan. 


 
 

3. Administration.    
    


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


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



        (1)   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; whether a Stock Award will be an Incentive Stock Option, a Nonstatutory Stock Option, a stock bonus, a right to purchase restricted stock, a Stock Appreciation
Right, or a combination of the foregoing; 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 stock
pursuant to a Stock Award; whether a person shall be permitted to receive stock upon exercise of an Independent Stock Appreciation Right; and the number of shares with respect to which a Stock Award
shall be granted to each such person. 


        (2)   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. 


        (3)   To amend the Plan or a Stock Award as provided in Section 14. 


        (4)   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)   The Board may delegate administration of the Plan to a committee of the Board composed of not fewer than two
(2) members (the "Committee"), all of the members of which Committee may be, 








in
the discretion of the Board, Non-Employee Directors and/or Outside Directors. 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 of two (2) or more Outside Directors 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 such a 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.
Notwithstanding anything in this Section 3 to the contrary, the Board or the Committee may delegate to a committee of one or more members of the Board the authority to grant Stock Awards to
eligible persons who (1) are not then subject to Section 16 of the Exchange Act and/or (2) are either (i) 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 (ii) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code. 


 
 

4. Shares Subject to the Plan.    
    


        (a)   Subject to the provisions of Section 13 relating to adjustments upon changes in stock, the stock that may be
issued pursuant to Stock Awards shall not exceed in the aggregate Two Million, Two Hundred Seventy Thousand, Eight Hundred Fifty Eight Shares and no/100 (2,270,858.00) shares of the Company's common
stock. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the stock not acquired under such Stock Award shall revert to
and again become available for issuance under the Plan. Shares subject to Stock Appreciation Rights exercised in accordance with Section 8 of the Plan shall not be available for subsequent
issuance under the Plan. 


        (b)   The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise. 


 
 

5. Eligibility.    
    


        (a)   Incentive Stock Options and Stock Appreciation Rights appurtenant thereto may be granted only to Employees. Stock Awards
other than Incentive Stock Options and Stock Appreciation Rights appurtenant thereto may be granted only to Employees, Directors or Consultants. 


        (b)   No person shall be eligible for the grant of an Option or an award to purchase restricted stock if, at the time of grant,
such person 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 unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of such stock at the date of grant and the Option is
not exercisable after the expiration of five (5) years from the date of grant, or in the case of a restricted stock purchase award, the purchase price is at least one hundred percent (100%) of
the Fair Market Value of such stock at the date of grant. 


        (c)   Subject to the provisions of Section 13 relating to adjustments upon changes in stock, no person shall be eligible
to be granted Options and Stock Appreciation Rights covering more than One Million Two Hundred Fifty Thousand (1,250,000) shares of the Company's common stock in any twelve (12) month period.
This subsection 5(c) shall not apply prior to the Listing Date and, following the Listing Date, shall not apply until (i) the earliest of: (A) the first material modification of the Plan
(including any increase to the number of shares reserved for issuance under the Plan in accordance with Section 4; (B) the issuance of all of the shares of common stock reserved for
issuance under the Plan; (C) the expiration of the Plan; or (D) the first meeting of shareholders 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. 


 
 

6. Option Provisions.    
    


        Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. 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. No Option shall be exercisable after the expiration of ten (10) years from the date it was granted. 


        (b)   Price. The exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair
Market Value of the stock subject to the Option on the date the Option is granted; the exercise price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of
the Fair Market Value of the stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or 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. 


        (c)   Consideration. The purchase price of 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 or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other common stock of the Company, (B) according to a deferred payment or other arrangement (which may include, without limiting the generality
of the foregoing, the use of other common stock of the Company) with the person to whom the Option is granted or to whom the Option is transferred pursuant to subsection 6(d), or (C) in any
other form of legal consideration that may be acceptable to the Board. 


        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. 



        (d)   Transferability. An 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 person to whom the Option is granted only by such person. The person to whom the Option is granted 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 Optionee, shall thereafter be entitled to exercise the Option. 


        (e)   Vesting. The total number of shares of stock subject to an Option may, but need not, be allotted in periodic installments
(which may, but need not, be equal). The Option Agreement may provide that from time to time during each of such installment periods, the Option may become exercisable ("vest") with respect to some or
all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period and/or any prior period as to which the Option became vested but was
not fully exercised. 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 but in each case will provide for vesting of at least twenty percent (20%) per year of the total number of shares subject to the
Option. The provisions of this subsection 6(e) are subject to any Option provisions governing the minimum number of shares as to which an Option may be exercised. 



        (f)    Termination of Employment or Relationship as a Director or Consultant. In the event an Optionee's Continuous Status as an
Employee, Director or Consultant terminates (other than upon the Optionee's death or disability), the Optionee may exercise his or her Option (to the extent that the 










Optionee
was entitled to exercise it 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 Optionee's Continuous Status as an Employee, Director or Consultant (or such longer or shorter period, which shall not be less than thirty (30) days, unless such termination is for
cause, specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionee does not exercise his or
her Option within the time specified in the Option Agreement, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. 


        An
Optionee's Option Agreement may also provide that if the exercise of the Option following the termination of the Optionee's Continuous Status as an Employee, Director, or Consultant
(other than upon the Optionee's death or disability) would result in liability under Section 16(b) of the Exchange Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in the Option Agreement, or (ii) the tenth (10th) day after the last date on which such exercise would result in such liability under
Section 16(b) of the Exchange Act. Finally, an Optionee's Option Agreement may also provide that if the exercise of the Option following the termination of the Optionee's Continuous Status as
an Employee, Director or Consultant (other than upon the Optionee's death or disability) would be prohibited at any time solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in the first paragraph of this subsection 6(f),
or (ii) the expiration of a period of three (3) months after the termination of the Optionee's Continuous Status as an Employee, Director or Consultant during which the exercise of the
Option would not be in violation of such registration requirements. 


        (g)   Disability of Optionee. In the event an Optionee's Continuous Status as an Employee Director or Consultant terminates as
a result of the Optionee's disability, the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise it 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, which in no event shall be less than six
(6) months, specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become
available for issuance under the Plan. 


        (h)   Death of Optionee. In the event of the death of an Optionee during, or within a period specified in the Option Agreement
after the termination of, the Optionee's Continuous Status as an Employee, Director or Consultant, the Option may be exercised (to the extent the Optionee was entitled to exercise the Option as of the
date of death) by the Optionee'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 Optionee's death
pursuant to subsection 6(d), but only within the period ending on the earlier of (i) the date eighteen (18) months following the date of death (or such longer or shorter period, which in
no event shall be less than six (6) months, specified in the Option Agreement), or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, at the time of
death, the Optionee was not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under
the Plan. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available
for issuance under the Plan. 


        (i)    Early Exercise. The Option may, but need not, include a provision whereby the Optionee may elect at any time while an
Employee, Director or Consultant to exercise the Option as to any part or all of the shares subject to the Option prior to the full vesting of the Option. Any unvested shares so purchased shall be
subject to a repurchase right in favor of the Company, with the repurchase price to be equal to the original purchase price of the stock, or to any other restriction the Board determines to 










be
appropriate; provided, however, that (i) the right to repurchase at the original purchase price shall lapse at a minimum rate of twenty
percent (20%) per year over five (5) years from the date the Option was granted, and (ii) such repurchase right shall be exercisable only within (A) the one hundred and twenty
(120) day period following the termination of employment or the relationship as a Director or Consultant, or (B) such longer period as may be agreed to by the Company and the Optionee
(for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code (regarding "qualified small business stock")), and (iii) such right shall be exercisable only
for cash or cancellation of purchase money indebtedness for the shares. Should the right of repurchase be assigned by the Company, the assignee shall pay the Company cash equal to the difference
between the original purchase price and the stock's Fair Market Value if the original purchase price is less than the stock's Fair Market Value. 


        (j)    Right of Repurchase. 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 exercised pursuant to the Option; provided, however, that (i) such repurchase
right shall be exercisable only within (A) the one hundred and twenty (120) day period following the termination of employment or the relationship as a Director or Consultant, or
(B) such longer period as may be agreed to by the Company and the Optionee (for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code (regarding
"qualified small business stock")), (ii) such repurchase right shall be exercisable for less than all of the vested shares only with the Optionee's consent, and (iii) such right shall be
exercisable only for cash or cancellation of purchase money indebtedness for the shares at a repurchase price equal to the greater of (A) the stock's Fair Market Value at the time of such
termination or (B) the original purchase price paid for such shares by the Optionee. Should the right of repurchase be assigned by the Company, the assignee shall pay the Company cash equal to
the difference between the original purchase price and the stock's Fair Market Value if the original purchase price is less than the stock's Fair Market Value. 


        (k)   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 Optionee of the intent to transfer all or any part of the shares exercised pursuant to the Option. 


        (l)    Re-Load Options. Without in any way limiting the authority of the Board or Committee to make or not to make
grants of Options hereunder, the Board or Committee shall have the authority (but not an obligation) to include as part of any Option Agreement a provision entitling the Optionee to a further Option
(a "Re-Load Option") in the event the Optionee 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. Any such Re-Load Option (i) shall be for a number of shares equal to the number of shares surrendered as part or all
of the exercise price of such Option; (ii) shall 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 (iii) shall 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 which is granted to a 10% shareholder (as described in subsection 5(b)), shall have an exercise price which
is equal to one hundred ten percent (110%) of the Fair Market Value of the stock subject to the Re-Load Option on the date of exercise of the original Option and shall have a term which is
no longer than five (5) years. 


        Any
such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option, as the Board or Committee 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 exercisability of Incentive Stock Options described in subsection 12(e) of the Plan 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 under subsection 4(a) and the limits on the
grants of Options under subsection 5(c) 










and
shall be subject to such other terms and conditions as the Board or Committee may determine which are not inconsistent with the express provisions of the Plan regarding the terms of Options. 


 
 

7. Terms of Stock Bonuses and Purchases of Restricted Stock.    
    


        Each stock bonus or restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem
appropriate. The terms and conditions of stock bonus or restricted stock purchase agreements may change from time to time, and the terms and conditions of separate agreements need not be identical,
but each stock bonus or 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 as appropriate: 


        (a)   Purchase Price. The purchase price under each restricted stock purchase Stock Award Agreement shall be such amount as the
Board or Committee shall determine and designate in such agreement, but in no event shall the purchase price be less than eighty-five percent (85%) of the stock's Fair Market Value on the
date such award is made. Notwithstanding the foregoing, the Board or the Committee may determine that eligible participants in the Plan may be awarded stock pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or for its benefit. 



        (b)   Transferability. Rights under a stock bonus or restricted stock purchase agreement shall be transferable by the grantee
only upon such terms and conditions as are set forth in the applicable Stock Award Agreement, as the Board or the Committee shall determine in its discretion, so long as stock awarded under such Stock
Award Agreement remains subject to the terms of the agreement. 


        (c)   Consideration. The purchase price of stock acquired pursuant to a stock purchase agreement shall be paid either:
(i) in cash at the time of purchase; (ii) at the discretion of the Board or the Committee, according to a deferred payment or other arrangement with the person to whom the stock is sold;
or (iii) in any other form of legal consideration that may be acceptable to the Board or the Committee in its discretion. Notwithstanding the foregoing, the Board or the Committee to which
administration of the Plan has been delegated may award stock pursuant to a stock bonus agreement in consideration for past services actually rendered to the Company or for its benefit. 


        (d)   Vesting. Shares of stock sold or awarded under the Plan may, but need not, be subject to a repurchase option in favor of
the Company in accordance with a vesting schedule to be determined by the Board or the Committee. The applicable agreement shall provide that (i) the right to repurchase at the original
purchase price shall lapse at a minimum rate of twenty percent (20%) per year over five (5) years from the date the Stock Award was granted, and (ii) such right shall be exercisable only
(A) within the one hundred and twenty (120) day period following the termination of employment or the relationship as a Director or Consultant, or (B) such longer period as may be
agreed to by the Company and the holder of the Stock Award (for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code (regarding "qualified small business
stock")), and (iii) such right shall be exercisable only for cash or cancellation of purchase money indebtedness for the shares. 


        (e)   Termination of Employment or Relationship as a Director or Consultant. In the event a Participant's Continuous Status as
an Employee, Director or Consultant terminates, the Company may repurchase or otherwise reacquire, subject to the limitations described in subsection 7(d), any or all of the shares of stock held by
that person which have not vested as of the date of termination under the terms of the stock bonus or restricted stock purchase agreement between the Company and such person. 


 
 

8. Stock Appreciation Rights.    
    


        (a)   The Board or Committee shall have full power and authority, exercisable in its sole discretion, to grant Stock
Appreciation Rights under the Plan to Employees or Directors of or Consultants to the Company or its Affiliates. To exercise any outstanding Stock Appreciation Right, the holder must 










provide
written notice of exercise to the Company in compliance with the provisions of the Stock Award Agreement evidencing such right. Except as provided in subsection 5(c), no limitation shall exist
on the aggregate amount of cash payments the Company may make under the Plan in connection with the exercise of a Stock Appreciation Right. 



        (b)   Three types of Stock Appreciation Rights shall be authorized for issuance under the Plan: 



        (1)   Tandem Stock Appreciation Rights. Tandem Stock Appreciation Rights will be granted appurtenant to an Option, and shall,
except as specifically set forth in this Section 8, be subject to the same terms and conditions applicable to the particular Option grant to which it pertains. Tandem Stock Appreciation Rights
will require the holder to elect between the exercise of the underlying Option for shares of stock and the surrender, in whole or in part, of such Option for an appreciation distribution. The
appreciation distribution payable on the exercised Tandem Right shall be in cash (or, if so provided, in an equivalent number of shares of stock based on Fair Market Value on the date of the Option
surrender) in an amount up to the excess of (A) the Fair Market Value (on the date of the Option surrender) of the number of shares of stock covered by that portion of the surrendered Option in
which the Optionee is vested over (B) the aggregate exercise price payable for such vested shares. 


        (2)   Concurrent Stock Appreciation Rights. Concurrent Rights will be granted appurtenant to an Option and may apply to all or
any portion of the shares of stock subject to the underlying Option and shall, except as specifically set forth in this Section 8, be subject to the same terms and conditions applicable to the
particular Option grant to which it pertains. A Concurrent Right shall be exercised automatically at the same time the underlying Option is exercised with respect to the particular shares of stock to
which the Concurrent Right pertains. The appreciation distribution payable on an exercised Concurrent Right shall be in cash (or, if so provided, in an equivalent number of shares of stock based on
Fair Market Value on the date of the exercise of the Concurrent Right) in an amount equal to such portion as shall be determined by the Board or the Committee at the time of the grant of the excess of
(A) the aggregate Fair Market Value (on the date of the exercise of the Concurrent Right) of the vested shares of stock purchased under the underlying Option which have Concurrent Rights
appurtenant to them over (B) the aggregate exercise price paid for such shares. 



        (3)   Independent Stock Appreciation Rights. Independent Rights will be granted independently of any Option and shall, except
as specifically set forth in this Section 8, be subject to the same terms and conditions applicable to Nonstatutory Stock Options as set forth in Section 6. They shall be denominated in
share equivalents. The appreciation distribution payable on the exercised Independent Right shall be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on
the date of the exercise of the Independent Right) of a number of shares of Company stock equal to the number of share equivalents in which the holder is vested under such Independent Right, and with
respect to which the holder is exercising the Independent Right on such date, over (B) the aggregate Fair Market Value (on the date of the grant of the Independent Right) of such number of
shares of Company stock. The appreciation distribution payable on the exercised Independent Right shall be in cash or, if so provided, in an equivalent number of shares of stock based on Fair Market
Value on the date of the exercise of the Independent Right. 



 
 

9. Cancellation and Re-Grant of Options.    
    



        (a)   The Board or the Committee shall have the authority to effect, at any time and from time to time, (i) the
repricing of any outstanding Options and/or any Stock Appreciation Rights under the Plan and/or (ii) with the consent of the affected holders of Options and/or Stock Appreciation Rights, the
cancellation of any outstanding Options and/or any Stock Appreciation Rights under the Plan and the grant in substitution therefor of new Options and/or Stock Appreciation Rights under the Plan
covering the same or different numbers of shares of stock, but having an exercise price per share not less than eighty-five percent (85%) of the Fair Market Value (one hundred percent
(100%) of the Fair Market 










Value
in the case of an Incentive Stock Option) or, in the case of a 10% shareholder (as described in subsection 5(b)), not less than one hundred ten percent (110%) of the Fair Market Value) per share
of stock on the new grant date. Notwithstanding the foregoing, the Board or the Committee may grant an Option and/or Stock Appreciation Right with an exercise price lower than that set forth above if
such Option and/or Stock Appreciation Right is granted as part of a transaction to which section 424(a) of the Code applies. 


        (b)   Shares subject to an Option or Stock Appreciation Right canceled under this Section 9 shall continue to be counted
against the maximum award of Options and Stock Appreciation Rights permitted to be granted pursuant to subsection 5(c) of the Plan. The repricing of an Option and/or Stock Appreciation Right under
this Section 9, resulting in a reduction of the exercise price, shall be deemed to be a cancellation of the original Option and/or Stock Appreciation Right and the grant of a substitute Option
and/or Stock Appreciation Right; in the event of such repricing, both the original and the substituted Options and Stock Appreciation Rights shall be counted against the maximum awards of Options and
Stock Appreciation Rights permitted to be granted pursuant to subsection 5(c) of the Plan. The provisions of this subsection 9(b) shall be applicable only to the extent required by
Section 162(m) of the Code. 


 
 

10. Covenants of the Company.    
    


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


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


 
 

11. Use of Proceeds from Stock.    
    


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


 
 

12. Miscellaneous.    
    


        (a)   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 pursuant to subsection 6(e), 7(d) or 8(b), 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)   Neither an Employee, Director or Consultant nor any person to whom a Stock Award is transferred under subsection 6(d),
7(b), or 8(b) shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such Stock Award unless and until such person has satisfied all
requirements for exercise of the Stock Award pursuant to its terms. 


        (c)   Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Employee,
Director, Consultant or other holder of Stock Awards any right to continue in the employ of the Company or any Affiliate (or to continue acting as a Director or Consultant) or shall affect the right
of the Company or any Affiliate to terminate the employment of any Employee with or without cause, the right of the Company's Board of Directors and/or the Company's shareholders to remove any
Director as provided in the Company's By-Laws and the 










provisions
of the Delaware General Corporation Law, or the right to terminate the relationship of any Consultant subject to the terms of such Consultant's agreement with the Company or Affiliate. 


        (d)   To the extent that the aggregate Fair Market Value (determined at the time of grant) of stock with respect to which
Incentive Stock Options are exercisable for the first time by any Optionee 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)   The Company may require any person to whom a Stock Award is granted, or any person to whom a Stock Award is transferred
pursuant to subsection 6(d), 7(b) or 8(b), as a condition of exercising or acquiring stock under any Stock Award, (1) to give written assurances satisfactory to the Company as to such person'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 risks of exercising the Stock Award; and (2) to give written
assurances satisfactory to the Company stating that such person is acquiring the stock subject to the Stock Award for such person's own account and not with any present intention of selling or
otherwise distributing the stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (i) the issuance of the shares upon the exercise or
acquisition of stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (ii) 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 stock. 


        (f)    To the extent provided by the terms of a Stock Award Agreement, the person to whom a Stock Award is granted may satisfy
any federal, state or local tax withholding obligation relating to the exercise or acquisition of stock under a Stock Award by any of the following means or by a combination of such means:
(1) tendering a cash payment; (2) authorizing the Company to withhold shares from the shares of the common stock otherwise issuable to the participant as a result of the exercise or
acquisition of stock under the Stock Award; or (3) delivering to the Company owned and unencumbered shares of the common stock of the Company. 


 
 

13. Adjustments upon Changes in Stock.    
    


        (a)   In the event of: 



        (1)   any
merger or consolidation (regardless of whether the Company is the surviving entity) except for a merger or consolidation for the sole purpose of changing the state
of incorporation of the Company and except for a merger or consolidation that does not result in the stockholders of the Company before such event retaining, directly or indirectly, less than a
majority of the voting stock of the surviving or resulting corporation; 


        (2)   a
sale of all or substantially all of the assets of the Company; or 


        (3)   any
other capital reorganization in which more than fifty percent (50%) of the shares of the Company entitled to vote are exchanged except for a reorganization that does
not result in the stockholders of the Company before such event retaining, directly or indirectly, less than a majority of the voting stock of the reorganized corporation 




        (each
of (1), (2) and (3) being a "Change in Control") then: (i) any surviving corporation shall assume any Stock Awards outstanding under the Plan or shall
substitute similar Stock Awards for those outstanding under the Plan, or (ii) such Stock Awards shall continue in full force and effect. In the event any surviving corporation refuses to assume
or continue such Stock Awards, or to substitute 








similar
stock awards for those outstanding under the Plan, then, with respect to Stock Awards held by persons then performing services as Employees, Directors or Consultants for the Company, the time
at which such Stock Awards may first be exercised shall be accelerated and the Stock Awards terminated if not exercised prior to such event. In addition, the Option may, but need not, include a
provision whereby the Option shall in any event be accelerated in full and become fully and immediately vested and exercisable immediately before the occurrence of a Change in Control. In the event of
a dissolution or liquidation of the Company, any Stock Awards outstanding under the Plan shall terminate if not exercised prior to such event. 


        (b)   In addition, with respect to any person who was providing Continuous Service as an Employee, Director or Consultant
immediately prior to the consummation of the Change in Control, any Stock Awards held by such person shall immediately become fully vested and exercisable (and any repurchase right by the Company with
respect to shares acquired by such person under an Option shall lapse) if such person is Involuntarily Terminated Without Cause or Constructively Terminated within eighteen (18) months
following the Change in Control. Notwithstanding the preceding sentence, in the event all of the following occurs: (i) such contemplated Change in Control would occur prior to the date two
(2) years following the adoption of this Section 13(b); (ii) such potential acceleration of vesting (and exercisability) would by
itself result in a contemplated Change in Control that would otherwise be eligible to be accounted for as a "pooling of interests" accounting transaction to become ineligible
for such accounting treatment; and (iii) the potential acquiror of the Company desires to account for such contemplated Change in Control as a "pooling of interests" transaction, then such
acceleration shall not occur unless otherwise expressly provided in an Option. Additionally, in the event that the restrictions upon acceleration provided for in the immediately preceding sentence  by itself would result in a contemplated Change in Control to become ineligible to be accounted for as a "pooling of interests" accounting transaction,
then such restrictions shall be deemed inoperative. Accounting issues shall be determined by the Company's independent public accountants applying generally accepted accounting principles. 


        For
purposes of the Plan, Constructively Terminated shall mean the voluntary termination of employment by Stock Award recipient after a reduction by the Company in Stock Award
recipient's base salary of fifteen percent (15%) or greater without Stock Award recipient's express written consent. 



        For
purposes of the Plan, Involuntarily Terminated Without Cause shall mean dismissal or discharge of Stock Award recipient for any reason other than Cause, death or Disability. 


        For
purposes of the Plan, Cause shall mean any of the following: (a) an intentional act which materially injures the Company; (b) an intentional refusal or failure to
follow lawful and reasonable directions of the Board or an individual to whom participant reports (as appropriate); (c) a willful and habitual neglect of duties; or (d) a conviction of a
felony involving moral turpitude which is reasonably likely to inflict or has inflicted material injury on the Company. 


 
 

14. Amendment of the Plan and Stock Awards.    
    


        (a)   The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 13
relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the shareholders of the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will: 



        (1)   Increase the number of shares reserved for Stock Awards under the Plan; 


        (2)   Modify the requirements as to eligibility for participation in the Plan (to the extent such modification requires
shareholder approval in order for the Plan to satisfy the requirements of Section 422 of the Code); or 


        (3)   Modify the Plan in any other way if such modification requires shareholder approval in order for the Plan to satisfy the
requirements of Section 422 of the Code or to comply with the requirements of Rule 16b-3. 













        (b)   The Board may in its sole discretion submit any other amendment to the Plan for shareholder 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 promulgated thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of compensation paid to certain executive officers. 


        (c)   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)   Rights and obligations 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 person to whom the Stock Award was granted and (ii) such person consents in writing. 


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


 
 

15. Termination or Suspension of the Plan.    
    


        (a)   The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate ten
(10) years from the date the Plan is adopted by the Board or approved by the shareholders 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. 


        (b)   Rights and obligations under any Stock Award granted while the Plan is in effect shall not be impaired by suspension or
termination of the Plan, except with the written consent of the person to whom the Stock Award was granted. 


 
 

16. Effective Date of Plan.    
    


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








  



 
 

PROS HOLDINGS, INC.
  1999 EQUITY INCENTIVE PLAN
  INCENTIVE STOCK OPTION GRANT    
    


                        ,
Optionee: 


        PROS
Holdings, Inc., a Delaware corporation (the "Company"), pursuant to its 1999 Equity Incentive Plan (the "Plan"), has granted to you, the Optionee named above, an option to
purchase shares of the common stock of the Company ("Common Stock"). This option is intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). 


        The
grant hereunder is in connection with and in furtherance of the Company's compensatory benefit plan for participation of the Company's employees (including officers) directors or
consultants and is intended to comply with the provisions of Rule 701 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"). Defined
terms not explicitly defined in this agreement but defined in the Plan shall have the same definitions as in the Plan. 


        The
details of your option are as follows: 


        1.     Total Number of Shares Subject to this Option.    The total number of shares of Common Stock subject to this
option is                        . 


        2.     Vesting.    Subject to the limitations contained herein, twenty-five percent (25%) of the shares
will vest (become exercisable) on                        , and the shares will then vest twenty-five percent (25%)
each                        thereafter until either (i) you cease to provide
services to the Company for any reason, or (ii) this option becomes fully vested. 


        3.     Exercise Price And Method Of Payment.



        (a)   Exercise Price.    The exercise price of this option
is                        ($            ) per share, being not
less than the fair market value of the Common Stock on the date of grant of this option. 



        (b)   Method of Payment.    Payment of the exercise price per share is due in full upon exercise of all or any part
of each installment which has accrued to you. You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following
alternatives: 



        (i)    Payment of the exercise price per share in cash (including check) at the time of exercise; 



        (ii)   Payment pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which,
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; 


        (iii) Provided that at the time of exercise the Company's Common Stock is publicly traded and quoted regularly in the Wall
Street Journal, payment by delivery of already-owned shares of Common Stock, held for the period required to avoid a charge to the Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interests, which Common Stock shall be valued at its fair market value on the date of exercise; or 


        (iv)  Payment by a combination of the methods of payment permitted by subparagraph 3(b)(i) through
3(b)(iii) above. 




1







 







        4.     Whole Shares.    This option may not be exercised for any number of shares which would require the issuance of
anything other than whole shares. 


        5.     Securities Law Compliance.    Notwithstanding anything to the contrary contained herein, this option may not be
exercised unless the shares issuable upon exercise of this option are then registered under the Act or, if such shares are not then so registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Act. 


        6.     Term.    The term of this option commences
on                        , the date of grant, and expires
on                        
(the "Expiration Date," which date shall be no more than ten (10) years from the date this option is granted), unless this option expires sooner as set forth below or in the Plan. In no event
may this option be exercised on or after the Expiration Date. This option shall terminate prior to the Expiration Date as follows: three (3) months after the termination of your Continuous
Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company unless one of the following circumstances exists: 



        (a)   Your termination of Continuous Status as an Employee, Director, or Consultant is due to your disability (within the
meaning of Section 422(c)(6) of the Code). This option will then expire on the earlier of the Expiration Date set forth above or twelve (12) months following such termination of
Continuous Status as an Employee, Director or Consultant. 


        (b)   Your termination of Continuous Status as an Employee, Director or Consultant is due to your death or your death occurs
within three (3) months following your termination of Continuous Status as an Employee, Director or Consultant for any other reason. This option will then expire on the earlier of the
Expiration Date set forth above or six (6) months after your death. 


        (c)   If during any part of such three (3) months period you may not exercise your option solely because of the
condition set forth in paragraph 5 above, then your option will not expire until the earlier of the Expiration Date set forth above or until this option shall have been exercisable for an
aggregate period of three (3) months after your termination of the Continuous Status as an Employee, Director, or Consultant. 


        (d)   If your exercise of the option within three (3) months after termination of your Continuous Status as an Employee,
Director, or Consultant with the Company or with an Affiliate of the Company would result in liability under section 16(b) of the Securities Exchange Act of 1934, then your option will expire
on the earlier of (i) the Expiration Date set forth above, (ii) the tenth (10th) day after the last date upon which exercise would result in such liability or (iii) six
(6) months and ten (10) days after the termination of your Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company. 




        However,
this option may be exercised following termination of Continuous Status as an Employee, Director or Consultant only as to that number of shares as to which it was exercisable on
the date of termination of Continuous Status as an Employee, Director or Consultant under the provisions of paragraph 2 of this option. 


        In
order 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 the option and
ending on the day three (3) months before the date of the option's exercise, you must be an employee of the Company or an Affiliate of the Company, except in the event of your death or
permanent and total disability. The Company has provided for continued vesting or 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 provide services to the Company or an Affiliate of the Company as a consultant or exercise your option more than three
(3) months after the date your employment with the Company and all Affiliates of the Company terminates. 


2







 



        7.     Exercise.



        (a)   This option may be exercised, to the extent specified above, 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 pursuant to subsection 12(e) of the Plan. 


        (b)   By exercising this option, you agree that: 



        (i)    as a precondition to the completion of any exercise of this option, the Company may require you to enter 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 this option; (2) the lapse of any substantial
risk of forfeiture to which the shares are subject at the time of exercise; or (3) the disposition of shares acquired upon such exercise; 


        (ii)   you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the
shares of the Common Stock issued upon exercise of this option that occurs within two (2) years after the date of this option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of this option; and 


        (iii) the Company (or a representative of the underwriters) may, in connection with the first underwritten registration of
the offering of any securities of the Company under the Act, require that you not sell or otherwise transfer or dispose of any shares of Common Stock or other securities of the Company during such
period (not to exceed one hundred eighty (180) days) following the effective date (the "Effective Date") of the registration statement of the Company filed under the Act as may be requested by
the Company or the representative of the underwriters. You further agree that the
Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period. 





        8.     Right of Repurchase; Right of First Refusal.



        (a)   The Company may elect, prior to the Listing Date, to repurchase all or any part of the vested shares exercised pursuant
to the Option; provided, however, that (i) such repurchase right shall be exercisable only within (A) the one hundred and twenty
(120) day period following the termination of employment or the relationship as a Director or Consultant, or (B) such longer period as may be agreed to by the Company and the Optionee
(for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code (regarding "qualified small business stock")), (ii) such repurchase right shall be exercisable
for less than all of the vested shares only with the Optionee's consent, and (iii) such right shall be exercisable only for cash or cancellation of purchase money indebtedness for the shares at
a repurchase price equal to the greater of (A) the stock's Fair Market Value at the time of such termination or (B) the original purchase price paid for such shares by the Optionee. Such
right of repurchase may be assigned by the Company. 


        (b)   If the Company does not elect to exercise its right of repurchase under Section 8(a) above, and at any time
thereafter but prior to the Listing Date the Optionee (including any permitted transferee of the Optionee's shares under Section 8(c)) receives a bona fide offer to purchase all or any of the
vested shares exercised pursuant to the Option (the "Offer") from a third party other than a permitted transferee of his shares under Section 8(c) (the "Offeror") 



3







 




which
the Optionee wishes to accept, the Optionee may transfer such shares pursuant to and in accordance with the following provisions: 



        (i)    the Optionee shall cause the Offer to be reduced to writing and shall notify the Company in writing of his or her desire
to accept the Offer and otherwise comply with the provisions of this Section 8(b). The Optionee's notice shall constitute an irrevocable offer to sell such shares to the Company at a price
equal to the price contained in, and on the same terms and conditions of, the Offer. The notice shall be accompanied by a true copy of the Offer (which shall identify the Offeror). 


        (ii)   the Company shall have the right to offer to purchase all, but not less than all, of the shares covered by the Offer. To
exercise such right, the Company shall, within fifteen (15) days of receipt of such written notice, communicate in writing such election to the Optionee. Such written election to purchase shall
constitute a valid, legally binding and enforceable agreement for the sale and purchase of all of the shares covered by the Offer. 




        (c)   Permitted transfers by an Optionee are (i) transfers to the Optionee's spouse or children, to a trust of which the
Optionee is the settlor or a trustee for the benefit of his spouse or children, and (ii) transfers upon an Optionee's death to his heirs, executors or administrators or to a trust under his or
her will or to his or her guardian or conservator, provided that in any such case the transferee shall have entered into an enforceable written agreement providing that all shares so transferred shall
continue to be subject to the provisions of Section 8(b) and (c) as if such shares were still held by the Optionee, and provided further that such permitted transferee shall not be
permitted to make any further transfers without complying with the provisions of Section 8(b) and (c). Anything to the contrary herein notwithstanding, transferees permitted by this
Section 8(c) shall take any shares so transferred subject to all obligations under Section 8(b) and (c) as if such shares were still held by the Optionee whether or not such
transferees so expressly agree. 




        9.     Transferability.    This 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 this option. 


        10.   Option Not a Service Contract.    This option is not an employment contract and nothing in this option shall be
deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. In addition, nothing in
this option shall obligate the Company or any Affiliate of the Company, or their respective stockholders, Board of Directors, officers or employees to continue any relationship which you might have as
a Director or Consultant for the Company or Affiliate of the Company. 


        11.   Notices.    Any notices provided for in this 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 the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate by written notice to the Company. 



        12.   Governing Plan Document.    This option is subject to all the provisions of the Plan, a copy of which is
attached hereto and its provisions are hereby made a part of this option, including without limitation the provisions of Section 6 of the Plan relating to option provisions, and is further
subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of
this option and those of the Plan, the provisions of the Plan shall control. 


4







 

        Dated
the            day
of                                        .




	 	 	Very truly yours,
	

 	
 	

By:	

    

	 	 	 	Duly authorized on behalf of the Board of Directors





Attachments:

PROS Holdings, Inc. 1999 Equity Incentive Plan

Notice of Exercise 


The
undersigned: 



        (a)   Acknowledges receipt of the foregoing option and the attachments referenced therein and understands that all rights and
liabilities with respect to this option are set forth in the option and the Plan; and 


        (b)   Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned
Optionee and the Company and its Affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of (i) the
options previously granted and delivered to the undersigned under stock option plans of the Company, and (ii) the following agreements only: 




                NONE



	 	    
(Initial Here if No Other Agreements)
	 	                                        
                                     





                OTHER



	 	    

	

 	

    
(If Other Agreements Please Identify Here)
	

 	

 	
 	
Signature:	

    

	 	 	 	Printed Name:	    

	 	 	 	Address:	    
    





5







 
 
 

NOTICE OF EXERCISE    
    



	PROS HOLDINGS, INC.	 	 
	3100 Main Street, Suite 900	 	 
	Houston, Texas 77002-9312	 	Date of Exercise:  _______________________________





Ladies
and Gentlemen: 


        This
constitutes notice under my stock option that I elect to purchase the number of shares for the price set forth below. 



	Type of option (check one):	 	Incentive o	 	Nonstatutory o
	

Stock option dated:	
 	

  ________________________	
 	

 
	

Number of shares as to which option is exercised:	
 	

  ________________________	
 	

 
	

Certificates to be issued in name of:	
 	

  ________________________	
 	

 
	

Total exercise price:	
 	

$ ________________________	
 	

 
	

Cash payment delivered here with:	
 	

$ ________________________	
 	

 
	

Value of             shares of PROS HOLDINGS, INC.:	
 	

$ ________________________	
 	

 






        By
this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the 1999 Equity Incentive Plan, (ii) to provide for the
payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock
option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the shares of Common Stock issued upon exercise of this option that occurs within two
(2) years after the date of grant of this option or within one (1) year after such shares of Common Stock are issued upon exercise of this option. 



        I
hereby make the following certifications and representations with respect to the number of shares of Common Stock of the Company listed above (the "Shares"), which are being acquired
by me for my own account upon exercise of the Option as set forth above: 


        I
acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and are deemed to constitute "restricted securities" under
Rule 701 and "control securities" under Rule 144 promulgated under the Act. I warrant and represent to the Company that I have no present intention of distributing or selling said
Shares, except as permitted under the Act and any applicable state securities laws. 



        I
further acknowledge that I will not be able to resell the Shares for at least ninety days after the stock of the Company becomes publicly traded (i.e., subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that more restrictive conditions apply to affiliates of the Company under Rule 144. 


        I
further acknowledge and agree that under the provisions of the Option, the Company may elect, prior to 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 (the
"Listing Date"), to repurchase all or any part of the Shares on the terms and conditions provided in the Option and that 


6







 



such
right of repurchase may be assigned by the Company. I further acknowledge and agree that if the Company does not elect to exercise such right of repurchase, and at any time thereafter but prior
to the Listing Date, I (including any permitted transferee of the Shares under the provisions of the Option) receive a bona fide offer to purchase all or any of the Shares from a third party (other
than such a permitted transferee) which I wish to accept, I may only transfer such Shares pursuant to and in accordance with the provisions of the Option which provide the Company with a right of
first refusal. 


        I
further acknowledge that all certificates representing any of the Shares subject to the provisions of the Option shall have endorsed thereon appropriate legends reflecting the
foregoing limitations, as well as any legends reflecting restrictions pursuant to the Company's Articles of Incorporation, Bylaws, and/or applicable securities laws. 


        I
further agree that, if required by the Company (or a representative of the underwriters) in connection with the first underwritten registration of the offering of any securities of the
Company under the Act, I will not sell or otherwise transfer or dispose of any shares of Common Stock or other securities of the Company during such period (not to exceed one hundred eighty
(180) days) following the effective date of the registration statement of the Company filed under the Act (the "Effective Date") as may be requested by the Company or the representative of the
underwriters. I further agree that the Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period. 



	 	 	Very truly yours,
	

 	
 	

    
    
 Printed Name




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QuickLinks


PROS Holdings, Inc. 1999 EQUITY INCENTIVE PLAN 1. Purposes.

2. Definitions.

3. Administration.

4. Shares Subject to the Plan.

5. Eligibility.

6. Option Provisions.

7. Terms of Stock Bonuses and Purchases of Restricted Stock.

8. Stock Appreciation Rights.

9. Cancellation and Re-Grant of Options.

10. Covenants of the Company.

11. Use of Proceeds from Stock.

12. Miscellaneous.

13. Adjustments upon Changes in Stock.

14. Amendment of the Plan and Stock Awards.

15. Termination or Suspension of the Plan.

16. Effective Date of Plan.


PROS HOLDINGS, INC. 1999 EQUITY INCENTIVE PLAN INCENTIVE STOCK OPTION GRANT

NOTICE OF EXERCISE