exv10w01



 





Exhibit 10.01




INTERWOVEN, INC.




1999 EQUITY INCENTIVE PLAN




As Adopted July 22, 1999

As Amended and Adjusted Thereafter




     1. PURPOSE. The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are important to the success of
the Company, its Parent and Subsidiaries, by offering them an opportunity to participate in the
Company’s future performance through awards of Options, Restricted Stock, Stock Bonuses and
Restricted Stock Units (RSU). Capitalized terms not defined in the text are defined in Section 24.



     2. SHARES SUBJECT TO THE PLAN.



          2.1 Number of Shares Available. Subject to Sections 2.2 and 19, the total number of
Shares reserved and available for grant and issuance pursuant to this Plan will be
6,900,000. 1 Shares plus Shares that are subject to: (a) issuance upon exercise of an
Option but cease to be subject to such Option for any reason other than exercise of such Option;
(b) an Award granted hereunder but are forfeited or are repurchased by the Company at the original
issue price; and (c) an Award that otherwise terminates without Shares being issued. In addition,
any authorized shares not issued or subject to outstanding grants under the 1996 Stock Option Plan
and the 1998 Stock Option Plan (the “Prior Plans”) on the Effective Date (as defined below) and any
shares issued under the Prior Plans that are forfeited or repurchased by the Company or that are
issuable upon exercise of options granted pursuant to the Prior Plans that expire or become
unexercisable for any reason without having been exercised in full, will no longer be available for
grant and issuance under the Prior Plans, but will be available for grant and issuance under this
Plan. At all times the Company shall reserve and keep available a sufficient number of Shares as
shall be required to satisfy the requirements of all outstanding Options granted under this Plan
and all other outstanding but unvested Awards granted under this Plan.




          2.2 Adjustment of Shares. In the event that the number of outstanding shares is
changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of the Company without
consideration, then (a) the number of Shares reserved for issuance under this Plan, (b) the
Exercise Prices of and number of Shares subject to outstanding Options, and (c) the number of
Shares subject to other outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and compliance with applicable
securities laws; provided, however, that fractions of a Share will not be issued but will either be
replaced by a cash payment equal to the Fair Market Value of such fraction of a Share or will be
rounded up to the nearest whole Share, as determined by the Committee.




     3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. All other Awards may be granted to employees, officers, directors,
consultants, independent contractors and advisors of the Company or any Parent or Subsidiary of the
Company; provided such consultants, contractors and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising transaction. No person will
be eligible to receive more than 1,000,000 Shares in any calendar year under this Plan pursuant to
the grant of Awards hereunder, other than new employees of the Company or of a Parent or Subsidiary
of the Company (including new employees who are also officers and directors of the Company or any
Parent or





 




			
	1	 	Adjusted to reflect (i) the authorization of 2,000,000
additional shares of Common Stock for issuance under the Plan approved by the
Company’s stockholders on June 1, 2000; (ii) the 2-for-1 split of the Company’s
Common Stock, paid in the form of a dividend, effected in July 2000 with
respect to stockholders of record on June 22, 2000; (iii) the authorization of
4,000,000 additional shares of Common Stock for issuance under the Plan
approved by the Company’s stockholders on December 12, 2000; (iv) the 2-for-1
split of the Company’s Common Stock, paid in the form of a dividend, effected
in December 2000 with respect to stockholders of record on December 13, 2000;
and (v) the 1-for-4 reverse stock split of the Company’s Common Stock effected
in November 2003.




 









 










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1999 Equity Incentive Plan



Subsidiary of the Company), who are eligible to receive up to a maximum of 1,500,000
Shares in the calendar year in which they commence their employment. A person may be granted more
than one Award under this Plan.




     4. ADMINISTRATION.



          4.1 Committee Authority. This Plan will be administered by the Committee or by the
Board acting as the Committee. Except for automatic grants to Outside Directors pursuant to
Section 10 hereof, and subject to the general purposes, terms and conditions of this Plan, and to
the direction of the Board, the Committee will have full power to implement and carry out this
Plan. Except for automatic grants to Outside Directors pursuant to Section 10 hereof, the
Committee will have the authority to:





	 	(a)	 	construe and interpret this Plan, any Award Agreement
and any other agreement or document executed pursuant to this Plan;
	 
	 	(b)	 	prescribe, amend and rescind rules and regulations
relating to this Plan or any Award;
	 
	 	(c)	 	select persons to receive Awards;
	 
	 	(d)	 	determine the form and terms of Awards;
	 
	 	(e)	 	determine the number of Shares or other consideration
subject to Awards;
	 
	 	(f)	 	determine whether Awards will be granted singly, in
combination with, in tandem with, in replacement of, or as alternatives
to, other Awards under this Plan or any other incentive or compensation
plan of the Company or any Parent or Subsidiary of the Company;
	 
	 	(g)	 	grant waivers of Plan or Award conditions;
	 
	 	(h)	 	determine the vesting, exercisability and payment of
Awards;
	 
	 	(i)	 	correct any defect, supply any omission or reconcile
any inconsistency in this Plan, any Award or any Award Agreement;
	 
	 	(j)	 	determine whether an Award has been earned; and
	 
	 	(k)	 	make all other determinations necessary or advisable
for the administration of this Plan.





          4.2 Committee Discretion. Except for automatic grants to Outside Directors pursuant
to Section 10 hereof, any determination made by the Committee with respect to any Award will be
made in its sole discretion at the time of grant of the Award or, unless in contravention of any
express term of this Plan or Award, at any later time, and such determination will be final and
binding on the Company and on all persons having an interest in any Award under this Plan. The
Committee may delegate to one or more officers of the Company the authority to grant an Award under
this Plan to Participants who are not Insiders of the Company.




     5. OPTIONS. The Committee may grant Options to eligible persons and will determine
whether such Options will be Incentive Stock Options within the meaning of the Code (“ISO”) or
Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the Option, the Exercise
Price of the Option, the period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:



          5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by an
Award Agreement which will expressly identify the Option as an ISO or an NQSO (“Stock Option
Agreement”),




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and, except as otherwise required by the terms of Section 10 hereof, will be in such
form and contain such provisions (which need not be the same for each Participant) as the Committee
may from time to time approve, and which will comply with and be subject to the terms and
conditions of this Plan.




          5.2 Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, unless otherwise specified by the
Committee. The Stock Option Agreement and a copy of this Plan will be delivered to the Participant
within a reasonable time after the granting of the Option.




          5.3 Exercise Period. Options may be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration of ten (10) years from
the date the Option is granted; and provided further that no ISO granted to a person who directly
or by attribution owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary of the Company (“Ten Percent
Stockholder”) will be exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee also may provide for Options to become exercisable at one time or from time
to time, periodically or otherwise, in such number of Shares or percentage of Shares as the
Committee determines.




          5.4 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may be not less than 85% of the Fair Market Value of the
Shares on the date of grant; provided that: (i) the Exercise Price of an ISO will be not less than
100% of the Fair Market Value of the Shares on the date of grant; and (ii) the Exercise Price of
any ISO granted to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with
Section 9 of this Plan.




          5.5 Method of Exercise. Options may be exercised only by delivery to the Company of a
written stock option exercise agreement (the “Exercise Agreement”) in a form approved by the
Committee (which need not be the same for each Participant), stating the number of Shares being
purchased, the restrictions imposed on the Shares purchased under such Exercise Agreement, if any,
and such representations and agreements regarding Participant’s investment intent and access to
information and other matters, if any, as may be required or desirable by the Company to comply
with applicable securities laws, together with payment in full of the Exercise Price for the number
of Shares being purchased.




          5.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option
Agreement, exercise of an Option will always be subject to the following:





	 	(a)	 	If the Participant is Terminated for any reason
except death or Disability, then the Participant may exercise such
Participant’s Options only to the extent that such Options would have been
exercisable upon the Termination Date no later than three (3) months after
the Termination Date (or such shorter or longer time period not exceeding
five (5) years as may be determined by the Committee, with any exercise
beyond three (3) months after the Termination Date deemed to be an NQSO),
but in any event, no later than the expiration date of the Options.
	 
	 	(b)	 	If the Participant is Terminated because of
Participant’s death or Disability (or the Participant dies within three
(3) months after a Termination other than for Cause or because of
Participant’s Disability), then Participant’s Options may be exercised
only to the extent that such Options would have been exercisable by
Participant on the Termination Date and must be exercised by Participant
(or Participant’s legal representative or authorized assignee) no later
than twelve (12) months after the Termination Date (or such shorter or
longer time period not exceeding five (5) years as may be determined by
the Committee, with any such exercise beyond (a) three (3) months after
the Termination Date when the Termination is for any reason other than the
Participant’s death or Disability, or




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	 	(b)	 	twelve (12) months after the
Termination Date when the Termination is for Participant’s death or
Disability, deemed to be an NQSO), but in any event no later than the
expiration date of the Options.
	 
	 	(c)	 	Notwithstanding the provisions in paragraph 5.6(a)
above, if a Participant is terminated for Cause, neither the Participant,
the Participant’s estate nor such other person who may then hold the
Option shall be entitled to exercise any Option with respect to any Shares
whatsoever, after termination of service, whether or not after termination
of service the Participant may receive payment from the Company or
Subsidiary for vacation pay, for services rendered prior to termination,
for services rendered for the day on which termination occurs, for salary
in lieu of notice, or for any other benefits. In making such
determination, the Board shall give the Participant an opportunity to
present to the Board evidence on his behalf. For the purpose of this
paragraph, termination of service shall be deemed to occur on the date
when the Company dispatches notice or advice to the Participant that his
service is terminated.





          5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of
Shares that may be purchased on any exercise of an Option, provided that such minimum number will
not prevent Participant from exercising the Option for the full number of Shares for which it is
then exercisable.




          5.8 Limitations on ISO. The aggregate Fair Market Value (determined as of the date of
grant) of Shares with respect to which ISO are exercisable for the first time by a Participant
during any calendar year (under this Plan or under any other incentive stock option plan of the
Company, Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value
of Shares on the date of grant with respect to which ISO are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the first $100,000
worth of Shares to become exercisable in such calendar year will be ISO and the Options for the
amount in excess of $100,000 that become exercisable in that calendar year will be NQSOs. In the
event that the Code or the regulations promulgated thereunder are amended after the Effective Date
of this Plan to provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISO, such different limit will be automatically incorporated herein and will apply to
any Options granted after the effective date of such amendment.




          5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution therefor, provided that
any such action may not, without the written consent of a Participant, impair any of such
Participant’s rights under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the
Code. The Committee may reduce the Exercise Price of outstanding Options without the consent of
Participants affected by a written notice to them; provided, however, that the Exercise Price may
not be reduced below the minimum Exercise Price that would be permitted under Section 5.4 of this
Plan for Options granted on the date the action is taken to reduce the Exercise Price.




          5.10 No Disqualification. Notwithstanding any other provision in this Plan, no term
of this Plan relating to ISO will be interpreted, amended or altered, nor will any discretion or
authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of
the Code or, without the consent of the Participant affected, to disqualify any ISO under Section
422 of the Code.




     6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to sell to
an eligible person Shares that are subject to restrictions. The Committee will determine to whom
an offer will be made, the number of Shares the person may purchase, the price to be paid (the
“Purchase Price”), the restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:



          6.1 Form of Restricted Stock Award. All purchases under a Restricted Stock Award made
pursuant to this Plan will be evidenced by an Award Agreement (“Restricted Stock Purchase
Agreement”) that will




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be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. The offer of Restricted Stock will be accepted by the Participant’s
execution and delivery of the Restricted Stock Purchase Agreement and full payment for the Shares
to the Company within thirty (30) days from the date the Restricted Stock Purchase Agreement is
delivered to the person. If such person does not execute and deliver the Restricted Stock Purchase
Agreement along with full payment for the Shares to the Company within thirty (30) days, then the
offer will terminate, unless otherwise determined by the Committee.




          6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock
Award will be determined by the Committee on the date the Restricted Stock Award is granted, except
in the case of a sale to a Ten Percent Stockholder, in which case the Purchase Price will be 100%
of the Fair Market Value. Payment of the Purchase Price may be made in accordance with Section 9
of this Plan.




          6.3 Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to
such restrictions as the Committee may impose. These restrictions may be based upon completion of
a specified number of years of service with the Company or upon completion of the performance goals
as set out in advance in the Participant’s individual Restricted Stock Purchase Agreement.
Restricted Stock Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Committee shall: (a) determine
the nature, length and starting date of any Performance Period for the Restricted Stock Award; (b)
select from among the Performance Factors to be used to measure performance goals, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to the payment of any
Restricted Stock
Award, the Committee shall determine the extent to which such Restricted Stock Award has been
earned. Performance Periods may overlap and Participants may participate simultaneously with
respect to Restricted Stock Awards that are subject to different Performance Periods and having
different performance goals and other criteria.




          6.4 Termination During Performance Period. If a Participant is Terminated during a
Performance Period for any reason, then such Participant will be entitled to payment (whether in
Shares, cash or otherwise) with respect to the Restricted Stock Award only to the extent earned as
of the date of Termination in accordance with the Restricted Stock Purchase Agreement, unless the
Committee will determine otherwise.




     7. STOCK BONUSES.



          7.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which may consist
of Restricted Stock) for services rendered to the Company or any Parent or Subsidiary of the
Company. A Stock Bonus may be awarded for past services already rendered to the Company, or any
Parent or Subsidiary of the Company pursuant to an Award Agreement (the “Stock Bonus Agreement”)
that will be in such form (which need not be the same for each Participant) as the Committee will
from time to time approve, and will comply with and be subject to the terms and conditions of this
Plan. A Stock Bonus may be awarded upon satisfaction of such performance goals as are set out in
advance in the Participant’s individual Award Agreement (the “Performance Stock Bonus Agreement”)
that will be in such form (which need not be the same for each Participant) as the Committee will
from time to time approve, and will comply with and be subject to the terms and conditions of this
Plan. Stock Bonuses may vary from Participant to Participant and between groups of Participants,
and may be based upon the achievement of the Company, Parent or Subsidiary and/or individual
performance factors or upon such other criteria as the Committee may determine.




          7.2 Terms of Stock Bonuses. The Committee will determine the number of Shares to be
awarded to the Participant. If the Stock Bonus is being earned upon the satisfaction of
performance goals pursuant to a Performance Stock Bonus Agreement, then the Committee will: (a)
determine the nature, length and starting date of any Performance Period for each Stock Bonus; (b)
select from among the Performance Factors to be used to measure the performance, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to the payment of any
Stock Bonus, the Committee shall determine the extent to which such Stock Bonuses have been earned.
Performance Periods may overlap and Participants may participate simultaneously with respect to
Stock Bonuses that are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with such performance
goals and criteria as




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may be determined by the Committee. The Committee may adjust the performance
goals applicable to the Stock Bonuses to take into account changes in law and accounting or tax
rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.




          7.3 Form of Payment. The earned portion of a Stock Bonus may be paid currently or on
a deferred basis with such interest or dividend equivalent, if any, as the Committee may determine.
Payment may be made in the form of cash or whole Shares or a combination thereof, either in a lump
sum payment or in installments, all as the Committee will determine.




     8. RESTRICTED STOCK UNITS.



          8.1 Award of Restricted Stock Units. An RSU is an award to a Participant covering a
number of Shares that may be settled in cash, or by issuance of those Shares for services to be
rendered or for past services already rendered to the Company or any Subsidiary. RSUs will vest
over a minimum of three years as measured from the date of grant.




          8.2 Form and Timing of Settlement. To the extent permissible under applicable law,
the Committee may permit a Participant to defer payment under a RSU to a date or dates after the
RSU is earned, provided that the terms of the RSU and any deferral satisfy the requirements of
Section 409A of the Code (or any successor) and any regulations or rulings promulgated thereunder.
Payment may be made in the form of cash or whole Shares or a combination thereof in a lump sum
payment, all as the Committee determines.




     9. PAYMENT FOR SHARE PURCHASES.



          9.1 Payment. Payment for Shares purchased pursuant to this Plan may be made in cash
(by check) or, where expressly approved for the Participant by the Committee and where permitted by
law:





	 	(a)	 	by cancellation of indebtedness of the Company to the
Participant;
	 
	 	(b)	 	by surrender of shares that either: (1) have been
owned by Participant for more than six (6) months and have been paid for
within the meaning of SEC Rule 144 (and, if such shares were purchased
from the Company by use of a promissory note, such note has been fully
paid with respect to such shares); or (2) were obtained by Participant in
the public market;
	 
	 	(c)	 	by tender of a full recourse promissory note having
such terms as may be approved by the Committee and bearing interest at a
rate sufficient to avoid imputation of income under Sections 483 and 1274
of the Code; provided, however, that Participants who are
not employees or directors of the Company will not be entitled to purchase
Shares with a promissory note unless the note is adequately secured by
collateral other than the Shares;
	 
	 	(d)	 	by waiver of compensation due or accrued to the
Participant for services rendered;
	 
	 	(e)	 	with respect only to purchases upon exercise of an
Option, and provided that a public market for the Company’s stock exists:






	 	(1)	 	through a “same day sale” commitment from
the Participant and a broker-dealer that is a member of the National
Association of Securities Dealers (an “NASD Dealer”) whereby the
Participant irrevocably elects to exercise the Option and to sell a
portion of the Shares so purchased to pay for the Exercise Price,
and whereby the NASD Dealer




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	 	 	 	irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the Company; or
	 
	 	(2)	 	through a “margin” commitment from the
Participant and a NASD Dealer whereby the Participant irrevocably
elects to exercise the Option and to pledge the Shares so purchased
to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or






	 	(f)	 	by any combination of the foregoing.





          9.2 Loan Guarantees. The Committee may help the Participant pay for Shares purchased
under this Plan by authorizing a guarantee by the Company of a third-party loan to the Participant.




     10. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS.



          10.1 Types of Options and Shares. Options granted under this Plan and subject to this
Section 10 shall be NQSOs.




          10.2 Eligibility. Options subject to this Section 10 shall be granted only to Outside
Directors.




          10.3 Annual Grants. Each Outside Director who was a member of the Board before the
Effective Date will automatically be granted an Option for 10,000 Shares on the Effective Date,
unless such Outside Director received a grant of Options before the Effective Date. Each Outside
Director who first becomes a member of the Board on or after the Effective Date will automatically
be granted an Option for 10,0002 Shares on the date such Outside Director first becomes a
member of the Board.
Immediately following each annual meeting of stockholders, all Outside Directors will
automatically be granted an Option for 10,0003 Shares, provided the Outside Director is
a member of the Board on such date and has served continuously as a member of the Board for a
period of at least one year since the date when such Outside Director first became a member of the
Board (the “Annual Grant”).




          10.4 Vesting. Each Annual Grant shall be 100% vested and immediately exercisable as
of the date of grant.




          10.5 Exercise Price. The exercise price of an Annual Grant shall be the Fair Market
Value of the Shares, at the time that the Option is granted.




     11. WITHHOLDING TAXES.



          11.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan, the Company may require the Participant to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an amount sufficient
to satisfy federal, state, and local withholding tax requirements.






 




			
	2	 	Adjusted to reflect an amendment to: (i)
increase the number of shares subject to grant by 20,000 shares, which was
approved by the Company’s stockholders on June 6, 2002; and (ii) reduce the
number of shares subject to grant by 30,000 shares, which was effected by the
Board in November 2003.
	 
	3	 	Adjusted to reflect an amendment to: (i) increase the
number of shares subject to grant by 10,000 shares, which was approved by the
Company’s stockholders on June 6, 2002; and (ii) reduce the number of shares
subject to grant by 10,000 shares, which was effected by the Board in November
2003.




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          11.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax
liability in connection with the exercise or vesting of any Award that is subject to tax
withholding and the Participant is obligated to pay the Company the amount required to be withheld,
the Committee may in its sole discretion allow the Participant to satisfy the minimum withholding
tax obligation by electing to have the Company withhold from the Shares to be issued that number of
Shares having a Fair Market Value equal to the minimum amount required to be withheld, determined
on the date that the amount of tax to be withheld is to be determined. All elections by a
Participant to have Shares withheld for this purpose will be made in accordance with the
requirements established by the Committee and be in writing in a form acceptable to the Committee




     12. TRANSFERABILITY.



          12.1 Except as otherwise provided in this Section 12, Awards granted under this Plan, and any
interest therein, will not be transferable or assignable by Participant, and may not be made
subject to execution, attachment or similar process, otherwise than by will or by the laws of
descent and distribution or as determined by the Committee and set forth in the Award Agreement
with respect to Awards that are not ISOs.




          12.2 All Awards other than NQSO’s. All Awards other than NQSO’s shall be exercisable:
(i) during the Participant’s lifetime, only by (A) the Participant, or (B) the Participant’s
guardian or legal representative; and (ii) after Participant’s death, by the legal representative
of the Participant’s heirs or legatees.




          12.3 NQSOs. Unless otherwise restricted by the Committee, an NQSO shall be
exercisable: (i) during the Participant’s lifetime only by (A) the Participant, (B) the
Participant’s guardian or legal representative, (C) a Family Member of the Participant who has
acquired the NQSO by “permitted transfer;” and (ii) after Participant’s death, by the legal
representative of the Participant’s heirs or legatees. “Permitted transfer” means, as authorized
by this Plan and the Committee in an NQSO, any transfer effected by the Participant during the
Participant’s lifetime of an interest in such NQSO but only such transfers which are by gift or
domestic relations order. A permitted transfer does not include any transfer for value and neither
of the following are transfers for value: (a) a transfer of under a domestic relations order in
settlement of marital property rights or (b) a transfer to an entity in which more than fifty
percent of the voting interests are owned by Family Members or the Participant in exchange for an
interest in that entity.




     13. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.



          13.1 Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the Participant. After
Shares are issued to the Participant, the Participant will be a stockholder
and have all the rights of a stockholder with respect to such Shares, including the right to
vote and receive all dividends or other distributions made or paid with respect to such Shares;
provided, that if such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such Shares by virtue of
a stock dividend, stock split or any other change in the corporate or capital structure of the
Company will be subject to the same restrictions as the Restricted Stock; provided, further, that
the Participant will have no right to retain such stock dividends or stock distributions with
respect to Shares that are repurchased at the Participant’s Purchase Price or Exercise Price
pursuant to this Section 13.




          13.2 Financial Statements. The Company will provide financial statements to each
Participant prior to such Participant’s purchase of Shares under this Plan, and to each Participant
annually during the period such Participant has Awards outstanding; provided, however, the Company
will not be required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.




          13.3 Restrictions on Shares. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Award Agreement a right to repurchase a portion of
or all Unvested Shares held by a Participant following such Participant’s Termination at any time
within ninety (90) days after the later of Participant’s Termination Date and the date Participant
purchases Shares under this Plan, for cash and/or




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cancellation of purchase money indebtedness, at
the Participant’s Exercise Price or Purchase Price, as the case may be.




     14. CERTIFICATES. All certificates for Shares or other securities delivered under
this Plan will be subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any applicable federal,
state or foreign securities law, or any rules, regulations and other requirements of the SEC or any
stock exchange or automated quotation system upon which the Shares may be listed or quoted.



     15. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant’s Shares,
the Committee may require the Participant to deposit all certificates representing Shares, together
with stock powers or other instruments of transfer approved by the Committee, appropriately
endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until
such restrictions have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase of Shares under this
Plan will be required to pledge and deposit with the Company all or part of the Shares so purchased
as collateral to secure the payment of Participant’s obligation to the Company under the promissory
note; provided, however, that the Committee may require or accept other or additional forms of
collateral to secure the payment of such obligation and, in any event, the Company will have full
recourse against the Participant under the promissory note notwithstanding any pledge of the
Participant’s Shares or other collateral. In connection with any pledge of the Shares, Participant
will be required to execute and deliver a written pledge agreement in such form as the Committee
will from time to time approve. The Shares purchased with the promissory note may be released from
the pledge on a pro rata basis as the promissory note is paid.



     16. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time to
time, authorize the Company, with the consent of the respective Participants, to issue new Awards
in exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may
at any time buy from a Participant an Award previously granted with payment in cash, Shares
(including Restricted Stock) or other consideration, based on such terms and conditions as the
Committee and the Participant may agree.



     17. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be effective
unless such Award is in compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are in effect on the
date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any
other provision in this Plan, the Company will have no obligation to issue or deliver certificates
for Shares under this Plan prior to: (a) obtaining any approvals from governmental agencies that
the Company determines are necessary or advisable; and/or (b) completion of any registration or
other qualification of such Shares under any state or federal law or ruling of any governmental
body that the Company determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock exchange or automated
quotation system, and the Company will have no liability for any inability or failure to do so.



     18. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted under this
Plan will confer or be deemed to confer on any Participant any right to continue in the employ of,
or to continue any other relationship with, the Company or any Parent or Subsidiary of the Company
or limit in any way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at any time, with or without cause.



     19. CORPORATE TRANSACTIONS.



          19.1 Assumption or Replacement of Awards by Successor. In the event of (a) a
dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is
not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary,
a reincorporation of the Company in a




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different jurisdiction, or other transaction in which there
is no substantial change in the stockholders of the Company or their relative stock holdings and
the Awards granted under this Plan are assumed, converted or replaced by the successor corporation,
which assumption will be binding on all Participants), (c) a merger in which the Company is the
surviving corporation but after which the stockholders of the Company immediately prior to such
merger (other than any stockholder that merges, or which owns or controls another corporation that
merges, with the Company in such merger) cease to own their shares or other equity interest in the
Company, (d) the sale of substantially all of the assets of the Company, or (e) the acquisition,
sale, or transfer of more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or replaced by the
successor corporation (if any), which assumption, conversion or replacement will be binding on all
Participants. In the alternative, the successor corporation may substitute equivalent Awards or
provide substantially similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor corporation may also
issue, in place of outstanding Shares of the Company held by the Participants, substantially
similar shares or other property subject to repurchase restrictions no less favorable to the
Participant. In the event such successor corporation (if any) refuses to assume or substitute
Awards, as provided above, pursuant to a transaction described in this Subsection 19.1, such Awards
will expire on such transaction at such time and on such conditions as the Committee will
determine. Notwithstanding anything in this Plan to the contrary, the Committee may, in its sole
discretion, provide that the vesting of any or all Awards granted pursuant to this Plan will
accelerate upon a transaction described in this Section 19. If the Committee exercises such
discretion with respect to Options, such Options will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the Committee determines, and if
such Options are not exercised prior to the consummation of the corporate transaction, they shall
terminate at such time as determined by the Committee.




          19.2 Other Treatment of Awards. Subject to any greater rights granted to Participants
under the foregoing provisions of this Section 19, in the event of the occurrence of any
transaction described in Subsection 19.1, any outstanding Awards will be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets.




          19.3 Assumption of Awards by the Company. The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in connection with an
acquisition of such other company or otherwise, by either; (a) granting an Award under this Plan in
substitution of such other company’s award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the substituted or
assumed award would have been eligible to be granted an Award under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company assumes an award
granted by another company, the terms and conditions of such award will remain unchanged (except
that the exercise price and the number and nature of Shares issuable upon exercise of any such
option will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the
Company elects to grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price.




     20. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on the date on
which the registration statement filed by the Company with the SEC under the Securities Act
registering the initial public offering of the Company’s Common Stock is declared effective by the
SEC (the “Effective Date”). This Plan shall be approved by the stockholders of the Company
(excluding Shares issued pursuant to this Plan), consistent with applicable laws, within twelve
(12) months before or after the date this Plan is adopted by the Board. Upon the Effective Date,
the Committee may grant Awards pursuant to this Plan; provided, however, that: (a) no Option may be
exercised prior to initial stockholder approval of this Plan; (b) no Option granted pursuant to an
increase in the number of Shares subject to this Plan approved by the Board will be exercised prior
to the time such increase has been approved by the stockholders of the Company; (c) in the event
that initial stockholder approval is not obtained
within the time period provided herein, all Awards granted hereunder shall be cancelled, any
Shares issued pursuant to any Awards shall be cancelled and any purchase of Shares issued hereunder
shall be rescinded; and (d) in the event that stockholder approval of such increase is not obtained
within the time period provided herein, all Awards granted pursuant to such increase will be
cancelled, any Shares issued pursuant to any Award



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granted pursuant to such increase will be
cancelled, and any purchase of Shares pursuant to such increase will be rescinded.




     21. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein, this
Plan will terminate ten (10) years from the date this Plan is adopted by the Board or, if earlier,
the date of stockholder approval. This Plan and all agreements thereunder shall be governed by and
construed in accordance with the laws of the State of California.



     22. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or amend
this Plan in any respect, including without limitation amendment of any form of Award Agreement or
instrument to be executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the stockholders of the Company, amend this Plan in any manner that
requires such stockholder approval.



     23. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the Board, the
submission of this Plan to the stockholders of the Company for approval, nor any provision of this
Plan will be construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.



     24. DEFINITIONS. As used in this Plan, the following terms will have the following
meanings:



     “Award” means any award under this Plan, including any Option, Restricted Stock, Stock Bonus
or RSU.



     “Award Agreement” means, with respect to each Award, the signed written agreement between the
Company and the Participant setting forth the terms and conditions of the Award.



     “Board” means the Board of Directors of the Company.



     “Cause” means the commission of an act of theft, embezzlement, fraud, dishonesty or a breach
of fiduciary duty to the Company or a Parent or Subsidiary of the Company.



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



     “Committee” means the Compensation Committee of the Board.



     “Company” means Interwoven, Inc. or any successor corporation.



     “Disability” means a disability, whether temporary or permanent, partial or total, as
determined by the Committee.



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



     “Exercise Price” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.



     “Fair Market Value” means, as of any date, the value of a share of the Company’s Common Stock
determined as follows:




	 	(a)	 	if such Common Stock is then quoted on the Nasdaq National Market, its closing
price on the Nasdaq National Market on the date of determination as reported in The
Wall Street Journal;
	 
	 	(b)	 	if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the principal
national securities exchange on which the Common Stock is listed or admitted to trading
as reported in The Wall Street Journal;




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	 	(c)	 	if such Common Stock is publicly traded but is not quoted on the Nasdaq National
Market nor listed or admitted to trading on a national securities exchange, the average
of the closing bid and asked prices on the date of determination as reported in The
Wall Street Journal;
	 
	 	(d)	 	in the case of an Award made on the Effective Date, the price
per share at which shares of the Company’s Common Stock are initially offered for sale to the public by the
Company’s underwriters in the initial public offering of the Company’s Common Stock
pursuant to a registration statement filed with the SEC under the Securities Act; or
	 
	 	(e)	 	if none of the foregoing is applicable, by the Committee in good faith.





     “Family Member” includes any of the following:




	 	(a)	 	child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law of the Participant, including any such
person with such relationship to the Participant by adoption;
	 
	 	(b)	 	any person (other than a tenant or employee) sharing the Participant’s household;
	 
	 	(c)	 	a trust in which the persons in (a) and (b) have more than fifty percent of the
beneficial interest;
	 
	 	(d)	 	a foundation in which the persons in (a) and (b) or the Participant control the
management of assets; or
	 
	 	(e)	 	any other entity in which the persons in (a) and (b) or the Participant own more
than fifty percent of the voting interest.





     “Insider” means an officer or director of the Company or any other person whose transactions
in the Company’s Common Stock are subject to Section 16 of the Exchange Act.



     “Option” means an award of an option to purchase Shares pursuant to Section 5.



     “Outside Director” means a member of the Board who is not an employee of the Company or any
Parent, Subsidiary or Affiliate of the Company.



     “Parent” means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if each of such corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain.



     “Participant” means a person who receives an Award under this Plan.



     “Performance Factors” means the factors selected by the Committee from among the following
measures to determine whether the performance goals established by the Committee and applicable to
Awards have been satisfied:




	 	(a)	 	Net revenue and/or net revenue growth;
	 
	 	(b)	 	Earnings before income taxes and amortization and/or earnings before income taxes
and amortization growth;
	 
	 	(c)	 	Operating income and/or operating income growth;
	 
	 	(d)	 	Net income and/or net income growth;




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1999 Equity Incentive Plan




	 	(e)	 	Earnings per share and/or earnings per share growth;
	 
	 	(f)	 	Total stockholder return and/or total stockholder return growth;
	 
	 	(g)	 	Return on equity;
	 
	 	(h)	 	Operating cash flow return on income;
	 
	 	(i)	 	Adjusted operating cash flow return on income;
	 
	 	(j)	 	Economic value added; and
	 
	 	(k)	 	Individual confidential business objectives.





     “Performance Period” means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured for Restricted Stock
Awards or Stock Bonuses.



     “Plan” means this Interwoven, Inc. 1999 Equity Incentive Plan, as amended from time to time.



     “Restricted Stock Award” means an award of Shares pursuant to Section 6.



     “RSU” means an Award granted pursuant to Section 8 of the Plan.



     “SEC” means the Securities and Exchange Commission.



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



     “Shares” means shares of the Company’s Common Stock reserved for issuance under this Plan, as
adjusted pursuant to Sections 2 and 19, and any successor security.



     “Stock Bonus” means an award of Shares, or cash in lieu of Shares, pursuant to Section 7.



     “Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.



     “Termination” or “Terminated” means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee, officer,
director, consultant, independent contractor, or advisor to the Company or a Parent or Subsidiary
of the Company. An employee will not be deemed to have ceased to provide services in the case of
(i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee,
provided, that such leave is for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute or unless provided otherwise pursuant
to formal policy adopted from time to time by the Company and issued and promulgated to employees
in writing. In the case of any employee on an approved leave of absence, the Committee may make
such provisions respecting suspension of vesting of the Award while on leave from the employ of the
Company or a Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Option agreement. The Committee will
have sole discretion to determine whether a Participant has ceased to provide services and the
effective date on which the Participant ceased to provide services (the “Termination Date”).



     “Unvested Shares” means “Unvested Shares” as defined in the Award Agreement.



     “Vested Shares” means “Vested Shares” as defined in the Award Agreement.



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