Document:

Prepared by R.R. Donnelley Financial -- 1998 Equity Incentive Plan

  
 Exhibit 10.01 
  
 CONCUR TECHNOLOGIES, INC. 
 1998 EQUITY INCENTIVE PLAN1 
  
 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 and Stock Bonuses. Capitalized terms not defined in the text are defined in
Section 23. 
  
 2.    Shares Subject to the Plan. 
  

2.1    Number of Shares Available.    Subject to Sections 2.2 and 18, the total number of Shares reserved and
available for grant and issuance pursuant to this Plan will be 7,490,000 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; or (c) an Award that otherwise terminates without Shares being issued. In addition, any authorized shares not issued or subject to outstanding
grants under the Company’s 1994 Stock Option Plan (the “Prior Plan”) on the Effective Date (as defined below) and any shares issued under the Prior Plan that are forfeited or repurchased by the Company or that are issuable upon
exercise of options granted pursuant to the Prior Plan 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 Plan, 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. The total number of Shares issued under the Plan upon exercise of ISOs (as defined in Section 5 below) will in no event exceed 25,000,000 Shares (adjusted in proportion to any adjustment under Section 2.2
below) over the term of the 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 
 

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	As adopted on August 21, 1998 and as amended on December 1, 1999, January 19, 2001, and January 18, 2002. On January 18, 2002, the Board of Directors approved
the amendment to the Plan subject to approval by the stockholders at the Company’s annual meeting of stockholders that will be held on March 6, 2002. 
 

 

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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 1,200,000 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 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. 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. Without
limitation, 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; 
 

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 (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.    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”), and 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. 
 

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 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 8 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, Disability or Cause, 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 (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, 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 ten (10)
days after the Termination Date, but in
 
 

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any event, no later than the expiration date of the Options. In making such determination, the Board shall give the Participant an opportunity to present to the Board evidence on his behalf.

  
 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: 
 

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 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 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 8 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 
 

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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 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.    Payment for Share Purchases. 
  
 8.1    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; 
 

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 (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
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. 
  
 8.2    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. 
  
 9.    Withholding Taxes.

  
 9.1    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. 

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 9.2    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. 
  
 10.    Privileges of Stock Ownership. 
  
 10.1    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 Section 12. 
  
 10.2    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. 
  
 11.    Transferability.    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. During the lifetime of the Participant an Award will be exercisable only by the Participant, and any elections with respect to an Award may be made only by the
Participant unless otherwise determined by the Committee and set forth in the Award Agreement with respect to Awards that are not ISOs. 
  
 12.    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
 
 

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Termination Date and the date Participant purchases Shares under this Plan, for cash and/or cancellation of purchase money indebtedness, at the Participant’s Exercise Price or Purchase
Price, as the case may be. 
  
 13.    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. 
  
 14.    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. 
  
 15.    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. 
  
 16.    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
 
 

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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. 
  
 17.    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. 
  
 18.    Corporate Transactions. 
  
 18.1    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 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 Participant, 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 18.1, 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 18. 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

 

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exercised prior to the consummation of the corporate transaction, they shall terminate at such time as determined by the Committee. 
  
 18.2    Other Treatment of Awards.    Subject to any greater rights granted to Participants under the foregoing
provisions of this Section 18, in the event of the occurrence of any transaction described in Section 18.1, any outstanding Awards will be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or
sale of assets. 
  
 18.3    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. 
  
 19.    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 granted pursuant to such increase will be cancelled, and any purchase of Shares pursuant to such increase will
be rescinded. 
  
 20.    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
 
 

 12 

 
thereunder shall be governed by and construed in accordance with the laws of the State of California. 
  
 21.    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.

  
 22.    Nonexclusivity of 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. 
  
 23.    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 or Stock
Bonus. 
  
 “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 Concur Technologies, 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. 
 

 13 

  
 “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; 
  
 (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. 
  
 “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. 
  
 “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;  
 

 14 

  
 (c)  Operating income and/or operating income growth; 

 
 (d)  Net income and/or net income growth; 
  
 (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 Concur
Technologies, Inc. 1998 Equity Incentive Plan, as amended from time to time. 
  
 “Restricted Stock
Award” means an award of Shares pursuant to Section 6. 
  
 “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 18, 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 
 

 15 

 
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. 
 

 16Prepared by R.R. Donnelley Financial -- 1998 Directors Stock Opinion Plan

 Exhibit 10.02 
  
 CONCUR TECHNOLOGIES, INC. 
  
 1998 DIRECTORS STOCK OPTION PLAN1 
  
 1.    Purpose.    This 1998 Directors Stock Option Plan (this “Plan”) is established to provide equity incentives for certain nonemployee members of the Board of Directors of Concur
Technologies, Inc. (the “Company”), who are described in Section 6.1 below, by granting such persons options to purchase shares of stock of the Company. 
  
 2.    Adoption and Stockholder Approval.    After this Plan is adopted by the Board of Directors of the Company (the “Board”),
this Plan will become effective on the time and date (the “Effective Date”) on which the registration statement filed by the Company with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended
(the “Securities Act”), to register the initial public offering of the Company’s Common Stock is declared effective by the SEC. This Plan shall be approved by the stockholders of the Company, consistent with applicable laws, within
twelve (12) months after the date this Plan is adopted by the Board. 
  
 3.    Types of Options and
Shares.    Options granted under this Plan shall be non-qualified stock options (“NQSOs”). The shares of stock that may be purchased upon exercise of Options granted under this Plan (the “Shares”) are
shares of the Common Stock of the Company. 
  
 4.    Number of Shares.    The
maximum number of Shares that may be issued pursuant to Options granted under this Plan (the “Maximum Number”) is 640,000 Shares, subject to adjustment as provided in this Plan. If any Option is terminated for any reason without being
exercised in whole or in part, the Shares thereby released from such Option shall be available for purchase under other Options subsequently granted under this Plan. At all times during the term of this Plan, the Company shall reserve and keep
available such number of Shares as shall be required to satisfy the requirements of outstanding Options granted under this Plan; provided, however that if the aggregate number of Shares subject to outstanding Options granted under this Plan plus the
aggregate number of Shares previously issued by the Company pursuant to the exercise of Options granted under this Plan equals or exceeds the Maximum Number, then notwithstanding anything herein to the contrary, no further Options may be granted
under 
 

	1
	 
	As adopted on August 21, 1998 and as amended on January 19, 2001, March 8, 2001 and January 18, 2002. On January 18, 2002, the Board of Directors approved an
amendment to the Plan, subject to approval by the stockholders at the Company’s annual meeting of stockholders that will be held on March 6, 2002. 
 

 

 1 

 
this Plan until the Maximum Number is increased or the aggregate number of Shares subject to outstanding Options granted under this Plan plus the aggregate number of Shares previously issued by
the Company pursuant to the exercise of Options granted under this Plan is less than the Maximum Number. 
  
 5.    Administration.    This Plan shall be administered by the Board or by a committee of not less than two members of the Board appointed to administer this Plan (the “Committee”).
As used in this Plan, references to the Committee shall mean either such Committee or the Board if no Committee has been established. The interpretation by the Committee of any of the provisions of this Plan or any Option granted under this Plan
shall be final and binding upon the Company and all persons having an interest in any Option or any Shares purchased pursuant to an Option. 
  
 6.    Eligibility and Award Formula. 
  
 6.1    Eligibility.    Options shall be granted only to directors of the Company who are not employees of the Company or any Parent, Subsidiary or Affiliate of the Company, as those terms are
defined in Section 17 below (each such person referred to as an “Optionee”). 
  
 6.2    Initial Grant.    Each Optionee who is or becomes a member of the Board on or after the Effective Date will automatically be granted an Option for 50,000 Shares (an “Initial
Grant”) on the later of the Effective Date or on the date such Optionee first becomes a member of the Board. 
  
 6.3    Succeeding Grants.    At each Annual Meeting of the Company, each Optionee will automatically be granted an Option for 20,000 Shares (a “Succeeding Grant”), provided the
Optionee is a member of the Board on such date and has served continuously as a member of the Board since the date of such Optionee’s Initial Grant. 
  
 6.4    Additional Grants.    In addition to the foregoing, the Board shall have the authority, in its sole discretion, to
determine: (i) the Optionees who shall be granted options in addition to the option grants described above; (ii) the times when such additional options shall be granted; (iii) the number of shares of Common Stock to be subject to each such
additional option; (iv) whether and under what conditions to accelerate the date of exercise of any such additional option; (v) whether to restrict the sale or other disposition of the shares of Common Stock acquired upon the exercise of such an
option and, if so, whether to waive any such restriction; (vi) whether to subject the exercise of all or any portion of an option to the fulfillment of contingencies as specified in the stock option contract referred to in Section 7 below and to
determine whether such contingencies have been met; and (vii) with the consent of the Optionee, to cancel or modify an option, provided that the modified provision is permitted to be included in an option granted under the Plan on the date of the
modification. 
  
 7.    Terms and Conditions of Options.    Subject to the following
and to Section 6 above: 
 

 2 

  
 7.1    Form of Option
Grant.    Each Option granted under this Plan shall be evidenced by a written Stock Option Grant (“Grant”) in such form (which need not be the same for each Optionee) as the Committee shall from time to time
approve, which Grant shall comply with and be subject to the terms and conditions of this Plan. 
  
 7.2    Vesting.    The date an Optionee receives an Initial Grant or a Succeeding Grant is referred to in this Plan as the “Start Date” for such Option. 
  
 (a)    Initial Grants.    Each Initial Grant will vest as to twenty-five percent (25%)
of the Shares on the first anniversary of the Start Date for such Initial Grant, and as to one thirty-sixth (1/36th) of the Shares on each subsequent monthly anniversary of the Start Date, so long as the Optionee continuously remains a director or a
consultant of the Company. 
  
 (b)    Succeeding Grants.    Each
Succeeding Grant will vest as to twenty-five percent (25%) of the Shares on the first anniversary of the Start Date for such Succeeding Grant, and as to one thirty-sixth ( 1/36th) of the Shares on each subsequent monthly anniversary of the Start Date, so long as the Optionee continuously remains a director or a consultant of the Company. 

 
 7.3    Exercise Price.    The exercise price of an Option shall be the Fair
Market Value (as defined in Section 17.4) of the Shares, at the time that the Option is granted. 
  
 7.4    Termination of Option.    Except as provided below in this Section, each Option shall expire ten (10) years after its Start Date (the “Expiration Date”). The Option shall cease
to vest when the Optionee ceases to be a member of the Board or a consultant of the Company. The date on which the Optionee ceases to be a member of the Board or a consultant of the Company shall be referred to as the “Termination Date”.
An Option may be exercised after the Termination Date only as set forth below: 
  
 (a)    Termination Generally.    If the Optionee ceases to be a member of the Board or a consultant of the Company for any reason except death of the Optionee or disability of the Optionee
(whether temporary or permanent, partial or total, as determined by the Committee), then each Option then held by such Optionee, to the extent (and only to the extent) that it would have been exercisable by the Optionee on the Termination Date, may
be exercised by the Optionee no later than seven (7) months after the Termination Date, but in no event later than the Expiration Date. 
  
 (b)    Death or Disability.    If the Optionee ceases to be a member of the Board or a consultant of the Company because of the death of the Optionee or the disability of
the Optionee (whether temporary or permanent, partial or total, as determined by the Committee), then each Option then held by such Optionee to the extent (and only to the extent) that it would have been exercisable by the Optionee on the
Termination Date, may be exercised by the Optionee (or the Optionee’s legal
 
 

 3 

 
representative) no later than twelve (12) months after the Termination Date, but in no event later than the Expiration Date. 
  
 8.    Exercise of Options. 
  
 8.1    Exercise Period.    Subject to the provisions of Section 8.5 below, Options shall be exercisable as they vest; provided that the Committee may provide that such Options shall be
immediately exercisable subject to repurchase in accordance with the vesting schedule set forth in Section 7. 
  
 8.2    Notice.    Options may be exercised only by delivery to the Company of an exercise agreement in a form approved by the Committee stating the number of Shares being purchased, the
restrictions imposed on the Shares and such representations and agreements regarding the Optionee’s investment intent and access to information as may be required 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. 
  
 8.3    Payment.    Payment for the Shares purchased upon exercise of an Option may be made (a) in cash or by check; (b) by surrender of shares of Common Stock of the Company that have been
owned by the Optionee for more than six (6) months (and which 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 were obtained by the Optionee in the open public market, having a Fair Market Value equal to the exercise price of the Option; (c) by waiver of compensation due or accrued to the Optionee for services rendered; (d) provided that a public
market for the Company’s stock exists, through a “same day sale” commitment from the Optionee and a broker-dealer that is a member of the National Association of Securities Dealers (an “NASD Dealer”) whereby the Optionee
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 irrevocably commits upon receipt of such Shares to forward the exercise price directly to the
Company; (e) provided that a public market for the Company’s stock exists, through a “margin” commitment from the Optionee and an NASD Dealer whereby the Optionee 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. 
  
 8.4    Withholding
Taxes.    Prior to issuance of the Shares upon exercise of an Option, the Optionee shall pay or make adequate provision for any federal or state withholding obligations of the Company, if applicable. 
  
 8.5    Limitations on Exercise.    Notwithstanding the exercise periods set forth in
the Grant, exercise of an Option shall always be subject to the following limitations: 
 

 4 

  
 (a)  An Option shall not be exercisable unless such exercise is in
compliance with the Securities Act and all applicable state securities laws, as they are in effect on the date of exercise. 
  
 (b)  The Committee may specify a reasonable minimum number of Shares that may be purchased upon any exercise of an Option, provided that such minimum number will not prevent the Optionee from exercising the
full number of Shares as to which the Option is then exercisable. 
  
 9.    Nontransferability of
Options.    During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee or by the Optionee’s guardian or legal representative, unless otherwise determined by the Committee. No Option may be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent and distribution, unless otherwise determined by the Committee. 
  
 10.    Privileges of Stock Ownership.    No Optionee shall have any of the rights of a stockholder with respect to any Shares subject to an
Option until the Option has been validly exercised. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date of exercise, except as provided in this Plan. The Company shall provide to
each Optionee a copy of the annual financial statements of the Company at such time after the close of each fiscal year of the Company as they are released by the Company to its stockholders. 
  

11.    Adjustment of Option Shares.    In the event that the number of outstanding shares of Common Stock of the Company is changed by
a stock dividend, stock split, reverse stock split, combination, reclassification or similar change in the capital structure of the Company without consideration, the number of Shares available under this Plan and the number of Shares subject to
outstanding Options and the exercise price per share of such outstanding Options shall be proportionately adjusted, subject to any required action by the Board or stockholders of the Company and compliance with applicable securities laws; provided,
however, that no fractional shares shall be issued upon exercise of any Option and any resulting fractions of a Share shall be rounded up to the nearest whole Share. 
  
 12.    No Obligation to Continue as Director.    Nothing in this Plan or any Option granted under this Plan shall confer on any Optionee
any right to continue as a director of the Company. 
  
 13.    Compliance With
Laws.    The grant of Options and the issuance of Shares upon exercise of any Options shall be subject to and conditioned upon compliance with all applicable requirements of law, including without limitation compliance with
the Securities Act, compliance with all other applicable state securities laws and compliance with the requirements of any stock exchange or national market system on which the Shares may be listed. The Company shall be under no obligation to
register the Shares
 
 

 5 

 
with the SEC or to effect compliance with the registration or qualification requirement of any state securities laws, stock exchange or national market system. 
  
 14.    Acceleration of Options on Certain Corporate Transactions.    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 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 Options granted under this Plan are assumed, converted or replaced by the successor corporation, which assumption,
conversion or replacement will be binding on all Optionees), (c) a merger in which the Company is the surviving corporation but after which the stockholders of the Company (other than any stockholder which merges (or which owns or controls another
corporation which merges) with the Company in such merger) cease to own their shares or other equity interests 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, the vesting of all options granted pursuant to this Plan will accelerate and the options will become exercisable in full prior to the consummation of such event at such
times and on such conditions as the Committee determines, and must be exercised, if at all, within seven months of the consummation of said event. Any options not exercised within such seven-month period shall expire. 
  
 15.    Amendment or Termination of Plan.    The Board may at any time terminate or amend this Plan or any
outstanding option, provided that the Board may not terminate or amend the terms of any outstanding option without the consent of the Optionee. In any case, no amendment of this Plan may adversely affect any then outstanding Options or any
unexercised portions thereof without the written consent of the Optionee. 
  
 16.    Term of
Plan.    Options may be granted pursuant to this Plan from time to time within a period of ten (10) years from the Effective Date. 
  
 17.    Certain Definitions.    As used in this Plan, the following terms shall have the following meanings: 
  
 17.1    “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. 
  
 17.2    “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. 
 

 6 

  
 17.3    “Affiliate” means any
corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another corporation, where “control” (including the terms “controlled by” and “under
common control with”) means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise. 

 
 17.4    “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; 
  
 (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 Option granted 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. 
 

 7

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