Document:

exv10w3

 

Exhibit
10.3

COMPELLANT TECHNOLOGIES, INC.

2002 STOCK OPTION PLAN

Section 1. General Purpose of Plan; Definitions.

     The name of this plan is the Compellent Technologies, Inc. 2002 Stock Option Plan (the
“Plan”). The purpose of the Plan is to enable Compellent Technologies, Inc. (the “Company”) and
its Subsidiaries to retain and attract executives, other employees, members of the Board of
Directors, and Consultants who contribute to the Company’s success by their ability, ingenuity and
industry, and to enable such individuals to participate in the long-term success and growth of the
Company by giving them a proprietary interest in the Company.

     For purposes of the Plan, the following terms shall be defined as set forth below:

     (a) “Agreement” means an agreement by and between the Company and an Optionee under
the Plan setting forth the terms and conditions of the Option.

     (b) “Board” means the Board of Directors of the Company as it may be comprised from
time to time.

     (c) “Cause” means, except as may otherwise be provided in the terms of the Option
Agreement or in a written employment agreement between the Company and the Optionee, a material
breach of any written employment agreement between the Company and the Optionee, a material breach
of any code of conduct established by the Company, a felony conviction of an Optionee or the
failure of an Optionee to contest prosecution for a felony, or an Optionee’s willful misconduct or
dishonesty which is injurious to the Company.

     (d) “Change in Control” means, except as may otherwise be provided in the terms of the
Option Agreement or in a written employment agreement between the Company and the Optionee, any of
the following:

          (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934) acquires or becomes a “beneficial owner” (as defined in Rule 13d-3 or any successor
rule under the Exchange Act), directly or indirectly, of securities of the Company representing 50%
or more of the combined voting power of the Voting Securities, provided, however, that the
following shall not constitute a Change in Control pursuant to this paragraph (d)(i):

	 	(A)	 	any acquisition of Voting Securities or Stock of the Company directly from the Company
other than in connection with a transaction described in Section 1(d)(iii) below;
	 
	 	(B)	 	any acquisition or beneficial ownership by the Company or a subsidiary;
	 
	 	(C)	 	any acquisition or beneficial ownership by any employee benefit plan (or related trust)
sponsored or maintained by the Company or one or more of its subsidiaries;

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	 	(D)	 	any acquisition or beneficial ownership by any corporation with respect to which,
immediately following such acquisition, more than 50% of both the combined voting power of the
Company’s then outstanding Voting Securities and the Stock of the Company is then beneficially
owned, directly or indirectly, by all or substantially all of the persons who beneficially owned
Voting Securities and Stock of the Company immediately prior to such acquisition in substantially
the same proportions as their ownership of such Voting Securities and Stock, as the case may be,
immediately prior to such acquisition;

          (ii) A majority of the members of the Board of the Company shall not be Continuing Directors;

          (iii) Approval by the stockholders of the Company of a reorganization, merger or consolidation
of the Company or a statutory exchange of outstanding Voting Securities of the Company, unless,
immediately following such reorganization, merger, consolidation or exchange, all or substantially
all of the persons who were the beneficial owners, respectively, of Voting Securities and Stock of
the Company immediately prior to such reorganization, merger, consolidation or exchange
beneficially own, directly or indirectly, more than 50% of, respectively, the combined voting power
of the then outstanding voting securities entitled to vote generally in the election of directors
and the then outstanding shares of common stock, as the case may be, of the corporation resulting
from such reorganization, merger, consolidation or exchange in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger, consolidation or exchange, of
the Voting Securities and Stock of the Company, as the case may be; or

          (iv) Approval by the stockholders of the Company of (x) a complete liquidation or dissolution
of the Company or (y) the sale or other disposition of all or substantially all of the assets of
the Company (in one or a series of transactions), other than to a corporation with respect to
which, immediately following such sale or other disposition, more than 50% of, respectively, the
combined voting power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors and the then outstanding shares of common stock of such
corporation is then beneficially owned, directly or indirectly, by all or substantially all of the
persons who were the beneficial owners, respectively, of the Voting Securities and Stock of the
Company immediately prior to such sale or other disposition in substantially the same proportions
as their ownership, immediately prior to such sale or other disposition, of the Voting Securities
and Stock of the Company, as the case may be.

     (e) “Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any successor statute.

     (f) “Committee” means the Committee referred to in Section 2 of the Plan.

     (g) “Company” means Compellent Technologies, Inc., a corporation organized under the
laws of the State of Delaware (or any successor corporation).

     (h) “Consultant” means any natural person providing bona fide services to the Company
or a Parent Corporation or a Subsidiary of the Company (other than persons either

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providing services in connection with the offer or sale of securities in a capital raising
transaction or directly or indirectly promoting or maintaining a market for the Company’s Stock),
who is compensated for such services and who is not an employee of the Company or any Parent
Corporation or Subsidiary of the Company. A Non-Employee Director may serve as a Consultant.

     (i) “Continuing Directors” means (A) individuals who, on the date hereof, are
directors of the Company, (B) individuals elected as directors of the Company subsequent to the
date hereof for whose election proxies shall have been solicited by the Board or (C) any individual
elected or appointed by the Board to fill vacancies on the Board caused by death or resignation
(but not by removal) or to fill newly-created directorships.

     (j) “Disability” means, except as may otherwise be provided in the terms of the Option
Agreement or in a written employment agreement between the Company and the Optionee, permanent and
total disability as determined by the Committee.

     (k) “Event” means the actual effective date of (a) a transaction described in Section
l(d)(iii), without regard to the exception contained therein; or (b) a transaction described in
Section 1(d)(iv), without regard to the exception contained therein.

     (l) “Fair Market Value” of Stock on any given date shall be determined by the
Committee as follows:

     (i) if the Stock is listed for trading on one or more national securities exchanges, or is
traded on the Nasdaq Stock Market (including the Nasdaq Small Cap Market), the last reported sales
price on such national securities exchange or the Nasdaq Stock Market on the day prior to the date
in question, or if such Stock shall not have been traded on such principal exchange on such date,
the last reported sales price on such principal exchange on the first day prior thereto on which
such Stock was so traded; or

     (ii) if the Stock is not listed for trading on a national securities exchange or the Nasdaq
Stock Market, but is traded in the over-the-counter market, including the Nasdaq OTC Bulletin
Board, the closing bid price for such Stock on the day prior to the date in question, or if there
is no closing bid price for such Stock on such date, the closing bid price on the first day prior
thereto on which such price existed; or

     (iii) if neither (i) nor (ii) is applicable, by any means fair and reasonable by the
Committee, which determination shall be final and binding on all parties.

     (m) “Incentive Option” means any Option intended to be and designated as an “Incentive
Option” within the meaning of Section 422 of the Code.

     (n) “Non-Employee Director” means a non-employee director within the meaning of Rule
16b-3(b)(3) under the Securities Exchange Act of 1934.

     (o) “Non-Qualified Option” means any Option that is not an Incentive Option.

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     (p) “Option” means any Option to purchase Stock granted pursuant to Section 5 below.

     (q) “Outside Director” means a Director who: (i) is not a current employee of the
Company or any member of an affiliated group which includes the Company; (ii) is not a former
employee of the Company who receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year; (iii) has not been an officer of the
Company; (iv) does not receive remuneration from the Company, either directly or indirectly, in any
capacity other than as a director, except as otherwise permitted under Section 162(m) of the Code
and regulations thereunder. For this purpose, remuneration includes any payment in exchange for
goods or services. The provisions of Section 162(m) of the Code and regulations promulgated
thereunder shall further govern this definition.

     (r) “Parent Corporation” means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of the 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 the chain.

     (s) “Stock” means the common stock, $0.001 par value per share, of the Company.

     (t) Intentionally omitted.

     (u) “Subsidiary” means any corporation (other than the Company), foreign or domestic,
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 the chain.

     (v) “Voting Securities” means the Company’s then outstanding securities entitled to
vote generally in the election of directors.

Section 2. Administration.

     The Plan shall be administered by the Board or by a Committee appointed by the Board
consisting of at least two members of the Board. At such time as the Company becomes subject to
the reporting requirements of the Securities Exchange Act of 1934, and regulations promulgated
thereunder, all of the members of the Committee shall be Non-Employee Directors and at such time as
the Company is subject to the limits under Section 162(m) of the Code, and regulations promulgated
thereunder, all of the members of the Committee shall be Outside Directors, each of whom shall
serve at the pleasure of the Board. If at any time no Committee shall be in office, then the Board
shall exercise the functions of the Committee specified in the Plan. Any or all of the functions
of the Committee specified in the Plan may be exercised by the Board, except for Options intended
to comply with regulations under Section 162(m) of the Code and regulations promulgated thereunder.

     The Committee shall have the power and authority to grant Options pursuant to the terms of the
Plan. In particular, the Committee shall have the authority:

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     (a) to select Optionees to whom Options may from time to time be granted hereunder;

     (b) to determine whether and to what extent Incentive Options, Non-Qualified Options, or a
combination of the foregoing, are to be granted hereunder;

     (c) to determine the number of shares of Stock to be covered by each such award granted
hereunder;

     (d) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
award granted hereunder (including, but not limited to, any restriction on any Option and/or the
Stock relating thereto) provided, however, that upon the occurrence of an Event,
the applicable provisions of Section 7 of the Plan shall govern the acceleration of the vesting of
any Option; and

     (e) to make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the plan.

     The Committee shall have the authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall, from time to time, deem advisable; to
interpret the terms and provisions of the Plan and any award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration of the Plan. Except to
the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee
may delegate to the chief executive officer of the Company the authority to exercise the powers
specified in clauses (a), (b), (c) and (d) above; provided, however, that from and after the date
that the Company is subject to the limits under Section 162(m) of the Code, and regulations
promulgated thereunder, such authority shall not be exercised by the chief executive officer with
respect to persons who are either the chief executive officer of the Company or the four highest
paid officers of the Company other than the chief executive officer.

     The Committee may amend the terms of any Option theretofore granted, prospectively or
retroactively, to the extent such amendment is consistent with the terms of the Plan, but no such
amendment shall impair the rights of any Optionee without his or her consent except to the extent
authorized under the Plan. The Committee may also substitute new Options for previously granted
Options, including previously granted Options having higher exercise prices.

     All decisions made by the Committee pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Company and all Optionees.

Section 3. Stock Subject to Plan.

     (a) Shares Reserved for Issuance. The total number of shares of Stock reserved and
available for distribution under the Plan shall be 3,857,143. Such shares shall consist of
authorized and unissued shares of Stock of the Company.

     If any shares of Stock become available as a result of canceled, unexercised, lapsed or
terminated Options under this Plan, such shares shall again be available for distribution in
connection with future awards under the Plan. Upon a stock-for-stock exercise of an Option or

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upon the withholding of Stock for the payment of the Option price or taxes, only the net
number of shares of Stock issued to the Optionee shall be used to calculate the number of shares
remaining available for distribution under the Plan.

     (b) Adjustments. The grant of an Option pursuant to the Plan shall not limit in any
way the right or power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge, exchange or consolidate or to dissolve,
liquidate or transfer all or any part of its business or assets.

     In the event of a corporate transaction involving the Company (including, without limitation,
any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, other
change in corporate structure affecting the Stock, or spin-off or other distribution of assets to
stockholders) or other event affecting the Stock which would be reasonably likely to result in the
diminution or enlargement of any of the benefits intended to be made available under the Plan or an
Option, the Committee may, without the consent of any holder of an Option, make such adjustment as
it determines in its discretion to be appropriate as to the number and kind of shares of Stock
subject to and reserved under this Plan, the purchase price of each share subject to an outstanding
Option and, in order to prevent dilution or enlargement of rights of participants in this Plan, the
number and kind of securities issuable upon exercise of an outstanding Option and the exercise
price thereof; provided that the number of shares of Stock subject to any Option shall always be a
whole number. Additional shares of Stock that may be credited pursuant to such adjustment shall be
subject to the same restrictions as are applicable to the Stock with respect to which the
adjustment relates.

Section 4. Eligibility.

     Officers, other employees of the Company and its Subsidiaries, members of the Board, and
Consultants who are responsible for or contribute to the management, growth and/or profitability of
the business of the Company and its Subsidiaries are eligible to be granted Options under the Plan.
Optionees under the Plan shall be selected from time to time by the Committee, in its sole
discretion, from among those eligible.

Section 5. Terms and Conditions of Options.

     Each Option shall be evidenced by a written Agreement, in such form as the Committee may
approve from time to time, which Agreement shall be subject to the provisions of this Plan and to
such other terms and conditions as the Committee may deem appropriate. The Options granted under
the Plan may be of two types: (i) Incentive Options and (ii) Non-Qualified Options. No Incentive
Option may be issued more than 10 years after the earlier of the date the Plan is adopted by the
Board or is approved by the shareholders.

     To the extent that any Option or portion of an Option does not qualify as an Incentive Option,
it shall constitute a separate Non-Qualified Option. A Non-Qualified Option may be granted to an
employee, in connection with hiring, retention or otherwise, prior to the date the employee first
performs services for the Company or the Subsidiary, provided that such Option shall not become
vested prior to the date the employee first performs such services.

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     Notwithstanding anything in the Plan to the contrary, no term of the Plan relating to an
Incentive Option shall be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify either the Plan or any Incentive Option
under Section 422 of the Code. The preceding sentence shall not preclude any modification or
amendment to an outstanding Incentive Option, whether or not such modification or amendment results
in disqualification of such Options as an Incentive Option, provided the Optionee consents in
writing to the modification or amendment.

     Options granted under the Plan shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable:

     (a) Limitation under Section 162(m) of the Code. At such time as the Company is
subject to the limits under Section 162(m) of the Code and regulations promulgated thereunder, no
person shall receive grants of Options under this Plan that exceed 400,000 shares of Stock during
any fiscal year of the Company.

     (b) Annual Limit on Incentive Options. The aggregate Fair Market Value (determined as
of the time the Option is granted) of the Stock with respect to which an Incentive Option under
this Plan or any other plan of the Company and any Subsidiary or Parent Corporation is exercisable
for the first time by a person during any calendar year shall not exceed $100,000.

     (c) Option Exercise Price. The exercise price per share of Stock purchasable under an
Option shall be determined by the Committee at the time of grant, except that the exercise price of
an Incentive Option shall not be less than 100% of the Fair Market Value of the Stock on the date
of grant of such Option; and (ii) the exercise price of a Non Qualified Option shall not be less
than 50% of the Fair Market Value of the Stock of the Company as of the date of grant of such
Option. If an employee owns or is deemed to own (by reason of the attribution rules applicable
under Section 424(d) of the Code) more than 10% of the combined voting power of all classes of
capital stock of the Company or any Parent Corporation or Subsidiary and an Incentive Option is
granted to such employee, the Option exercise price shall be no less than 110% of the Fair Market
Value of the Stock on the date of grant of such Option.

     (d) Option Term. The Committee shall fix the term of each Option, except that no
Incentive Option shall be exercisable more than ten years after the date of grant of such Option.
In the event that the Committee does not fix the term of an Option, the term shall be ten years
from the date the Option is granted, subject to earlier termination as otherwise provided herein.
Notwithstanding the foregoing, if an employee owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the combined voting power of all
classes of capital stock of the Company or any Parent Corporation or Subsidiary and an Incentive
Option is granted to such employee, the term of such Option shall be no more than five years from
the date of grant of such Option.

     (e) Exercisability. An Option shall be exercisable in accordance with such terms and
conditions and during such periods as determined by the Committee at or after grant, subject to the
restrictions stated Section 5(b) above. In the event the Committee does not determine the

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time at which an Option shall be exercisable, such Option shall be exercisable in equal
installments of 25% of the shares of Stock subject to the Option on and after the first anniversary
of the date of grant of the Option and an additional 25% of the shares of Stock subject to the
Option on and after the second, third and forth anniversaries of the date of grant of the Option,
subject to earlier termination as otherwise provided herein.

     (f) Method of Exercise. An Option may be exercised in whole or in part at any time
during the Option period by giving written notice of exercise to the Company, specifying the number
of shares of Stock to be purchased. Such notice shall be accompanied by payment in full of the
purchase price, either by certified or bank check, or by any other form of legal consideration
deemed sufficient by the Committee and consistent with the Plan’s purpose and applicable law,
including promissory notes or delivery of irrevocable instructions to a broker acceptable to the
Company to promptly deliver to the Company the amount of sale or loan proceeds to pay the entire
exercise price and any tax withholding resulting from such exercise. As determined by the
Committee at the time of grant or exercise, in its sole discretion, payment in full or in part may
also be made by tendering, by either actual delivery of Stock or attestation, Stock already owned
by the Optionee and valued at Fair Market Value (which, in the case of Stock acquired upon exercise
of an Option, the Committee may, in its discretion, require have been owned for more than six
months on the date of surrender); provided, however, that, in the case of an
Incentive Option, the right to make a payment in the form of already owned shares of Stock may be
authorized only at the time the Option is granted. No Stock shall be issued until full payment
therefor has been made. An Optionee shall generally have the rights to dividends and other rights
of a shareholder with respect to Stock subject to the Option when the Optionee has given written
notice of exercise, has paid in full for such Stock, and, if requested, has given the
representation described in Section 10(a).

     (g) Tax Withholding. Each Optionee shall, no later than the date as of which any part
of the value of an award first becomes includable as compensation in the gross income of the
Optionee for federal income tax purposes, pay to the Company, or make arrangements satisfactory to
the Committee regarding payment of, any federal, state, or local taxes of any kind required by law
to be withheld with respect to the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company, any Parent Corporation, and any
Subsidiary shall, to the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Optionee. If the terms of an Option so permit, an
Optionee may elect by written notice to the Company to satisfy part or all of the withholding tax
requirements associated with the award by:

     (i) authorizing the Company to retain from the number of shares of Stock that would otherwise
be deliverable to the Optionee, or

     (ii) delivering to the Company from Stock already owned by the Optionee, that number of shares
having an aggregate Fair Market Value equal to part or all of the tax payable by the Optionee under
this Section, and in the event shares of Stock are withheld, the amount withheld shall not exceed
the minimum required federal, state and FICA withholding amount.

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     Any such election shall be in accordance with, and subject to, applicable tax and securities
laws, regulations and rulings.

     (h) Transferability of Options.

     (i) No Incentive Option shall be transferable by the Optionee otherwise than by will or by the
laws of descent and distribution, and all Incentive Options shall be exercisable, during the
Optionee’s lifetime, only by the Optionee.

     (ii) The Committee may, in its discretion, authorize all or a portion of any Nonqualified
Option to be granted to an Optionee to be on terms which permit transfer by such Optionee to: (A)
the spouse, children or grandchildren of the Optionee (“Immediate Family Members”), (B) a trust or
trusts for the exclusive benefit of such Immediate Family Members, or (C) a partnership or
partnerships in which such Immediate Family Members are the only partners, provided that: (1) there
may be no consideration for any such transfer, (2) the Option pursuant to which such Stock is
granted must be approved by the Committee, and must expressly provide for transferability in a
manner consistent with this Section 5(h)(ii), and (3) subsequent transfers of a transferred Option
shall be prohibited except those in accordance with Section 5(g)(ii). Following transfer, any such
Option shall continue to be subject to the same terms and conditions as were applicable immediately
prior to transfer, provided that the term “Optionee” herein shall in such event be deemed to refer
to the transferee, except that the events of termination of employment and the provisions of
Sections 5(h), 5(i) and 5(j) hereof shall continue to be applied with respect to the original
Optionee, following which the Option shall be exercisable by the transferee only to the extent, and
for the periods specified in such Sections.

     (i) Termination by Death or Disability. Unless the Option Agreement provides
otherwise or the Committee determines, if an Optionee’s employment by the Company or any Subsidiary
or Parent Corporation terminates by reason of death or Disability, the Option may thereafter be
exercised, to the extent it was exercisable at the time of death or Disability (or on such
accelerated basis as the Committee shall determine at or after grant), by the Optionee or the legal
representative of the estate or by the legatee of the Optionee under the will of the Optionee, but
may not be exercised after one year from the date of such Disability or death or the expiration of
the stated term of the Option, whichever period is shorter. In the event of termination of
employment by reason of death or Disability, if an Incentive Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the Code, the Option
will thereafter he treated as a Non-Qualified Option.

     (j) Intentionally Omitted.

     (k) Other Termination. Unless the Option Agreement provides otherwise or the
Committee determines:

     (i) if an Optionee’s employment by the Company or any Subsidiary or Parent Corporation
terminates for any reason other than death, Disability or as provided in Section 5(k)(ii), the
Option shall immediately terminate; and

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     (ii) if the Company or any Subsidiary or Parent Corporation terminates the Optionee without
Cause, the Option may thereafter be exercised to the extent it was exercisable at the time of such
termination for three months from the date of such termination or the expiration of the stated
period of the Option, whichever period is shorter.

Section 6. Change in Control.

     (a) Acceleration of Vesting. Unless otherwise provided in an Agreement or by
Committee action with respect to any outstanding Option, no Option shall become exercisable solely
as a result of a Change in Control of the Company, and such Option shall be exercisable only to the
extent it was exercisable immediately prior to the Change in Control or otherwise becomes
exercisable after a Change in Control in accordance with its terms and conditions.

     (b) Cash Payment. If a Change in Control of the Company shall described in Section
1(d)(i) occurs, then, so long as a majority of the members of the Board are Continuing Directors,
the Committee, in its sole discretion, and without the consent of the holder of any Option affected
thereby, may determine that some or all outstanding Options shall be cancelled as of the effective
date of any such Change in Control and that the holder or holders of such cancelled Options shall
receive, with respect to all of the Stock subject to such cancelled Options, as of the date of such
cancellation, cash in an amount, for each share subject to an Option, equal to the excess of the
per share Fair Market Value of such Stock immediately prior to such Change in Control of the
Company over the exercise price per share of such Option.

     (c) Limitation on Change in Control Payments. Notwithstanding anything in
subparagraph 6(a) or 6(b) above or paragraph 7 below to the contrary, if, with respect to an
Optionee, the acceleration of the exercisability of an Option or the payment of cash in exchange
for all or part of an Option as provided in subparagraph 6(a) or 6(b) above or paragraph 7 below
(which acceleration or payment could be deemed a “payment” within the meaning of Section 280G(b)(2)
of the Code), together with any other payments which such Optionee has the right to receive from
the Company or any corporation which is a member of an “affiliated group” (as defined in Section
1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a
member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code),
then, unless otherwise provided in the applicable Option Agreement, such acceleration of
exercisability and payments pursuant to subparagraph 6(a) or 6(b) above or paragraph 7 below shall
be reduced to the largest amount as, in the sole judgment of the Committee, will result in no
portion of such payments being subject to the excise tax imposed by Section 4999 of the Code.

Section 7. Dissolution, Liquidation, Merger.

     Upon an Event, the Committee may, but shall not be obligated to, either (i) if the Event is a
merger, consolidation or statutory share exchange, make appropriate provision for the protection of
outstanding Options granted under this Plan by the substitution, in lieu of such Options, of
Options to purchase appropriate voting common stock (the “Survivor’s Stock”) of the corporation
surviving any such merger or consolidation or, if appropriate, the parent corporation of the
Company or such surviving corporation, or, alternatively, by the delivery of a

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number of shares of the Survivor’s Stock which has a Fair Market Value as of the effective
date of such merger, consolidation or statutory share exchange equal to the product of (x) the
excess of (A) the Event Proceeds per Share (as hereinafter defined) covered by the Option as of
such effective date over (B) the exercise price per share of the Stock subject to such Option,
times (y) the number of shares of Stock covered by such Option, or (ii) declare, at least twenty
days prior to the Event, and provide written notice to each Optionee of the declaration, that each
outstanding Option, whether or not then exercisable, shall be cancelled at the time of, or
immediately prior to the occurrence of, the Event (unless it shall have been exercised prior to the
occurrence of the Event). In connection with any declaration pursuant to clause (ii) of the
preceding sentence, the Committee may, but shall not be obligated to, cause payment to be made,
within twenty days after the Event, in exchange for each cancelled Option to each holder of an
Option that is cancelled, of cash equal to the amount (if any), for each share of Stock covered by
the cancelled Option, by which the Event Proceeds per Share exceeds the exercise price per share of
Stock covered by such Option. At the time of any declaration pursuant to clause (ii) of the first
sentence of this paragraph 7, each Option that has not previously expired or been cancelled
pursuant to paragraph 6(b) of this Plan shall immediately become exercisable in full and each
holder of an Option shall have the right, during the period preceding the time of cancellation of
the Option, to exercise his or her Option as to all or any part of the Stock covered thereby. In
the event of a declaration pursuant to clause (ii) of the first sentence of this paragraph 7, each
outstanding Option granted pursuant to this Plan that shall not have been exercised prior to the
Event shall be cancelled at the time of, or immediately prior to, the Event, as provided in the
declaration, and this Plan shall terminate at the time of such cancellation, subject to the payment
obligations of the Company provided in this paragraph 7. Notwithstanding the foregoing, no person
holding an Option shall be entitled to the payment provided in this paragraph 7 if such Option
shall have expired or been cancelled pursuant to paragraph 6(b) of this Plan. In addition, in the
event of the proposed dissolution or liquidation of the Company, the Committee may provide that any
Company repurchase Option applicable to the Stock shall lapse as to all such Stock, provided that
the proposed dissolution or liquidation takes place at the time and in the manner provided. For
purposes of this paragraph 7, “Event Proceeds per Share” shall mean the cash plus the fair market
value, as determined in good faith by the Committee, of the non-cash consideration to be received
per share of Stock by the stockholders of the Company upon the occurrence of the Event.

Section 8. Substitute Options.

     Options may be granted under this Plan from time to time in substitution for stock Options
held by employees of other corporations who are about to become employees of the Company, or any
parent or subsidiary thereof, or whose employer is about to become a subsidiary of the Company, as
the result of a merger or consolidation of the Company or a subsidiary of the Company with another
corporation, the acquisition by the Company or a subsidiary of the Company of all or substantially
all the assets of another corporation or the acquisition by the Company or a subsidiary of the
Company of at least 50% of the issued and outstanding stock of another corporation. The terms and
conditions of the substitute Option so granted may vary from the terms and conditions set forth in
this Plan to such extent as the Board of the Company at the time of the grant may deem appropriate
to conform, in whole or in part, to the provisions of the stock Options in substitution for which
they are granted, but with respect to stock Options which are incentive stock Options, no such
variation shall be permitted which

 11.

 

affects the status of any such substitute Option as an incentive stock Option without the
consent of the Optionee.

Section 9. Amendments and Termination.

     The Board may amend, alter, or discontinue the Plan, but no amendment, alteration, or
discontinuation shall be made: (a) which would impair the rights of an Optionee or Optionee under
an Option theretofore granted, without the Optionee’s or Optionee’s consent; or (b) which, without
the approval of the shareholders of the Company, would cause the Plan no longer to comply with Rule
16b-3 under the Securities Exchange Act of 1934, Section 422 of the Code, or the rules of the
Nasdaq Stock Market or any stock exchange upon which the Stock is then traded, or any other
regulatory requirements. Adjustments made by the Committee pursuant to Section 3 (relating to
adjustments of Stock) shall not be subject to the limitations of this Section 9.

Section 10. General Provisions.

     (a) Compliance With Laws. No Stock will be issued pursuant to the Plan unless in
compliance with applicable legal requirements, including without limitation, those relating to
securities laws and stock exchange listing requirements. The Committee may require each person
purchasing Stock pursuant to an Option under the Plan to represent to and agree with the Company in
writing that such person is acquiring the Stock without a view to distribution thereof.

     All certificates for Stock delivered under the Plan shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock exchange upon which the
Stock is then listed, and any applicable federal or state securities laws, and the Committee may
cause a legend or legends to be put on any such certificates to make appropriate reference to such
restrictions. The issuance or Stock may be effected on a non-certificated basis to the extent not
prohibited by applicable law or the applicable rules of any stock exchange upon which the Stock is
then listed.

     (b) No Rights to Employment; No Rights as a Shareholder. The adoption of the Plan
shall not confer upon any employee or Consultant of the Company, any Parent Corporation, or any
Subsidiary any right to continued employment or contract with the Company, any Parent Corporation,
or any Subsidiary, as the case may be, nor shall it interfere in any way with the right of the
Company, any Parent Corporation, or any Subsidiary to terminate the employment of any of its
employees or Consultants at any time.

     (c) Repurchase Right. The Committee may, at the time of the grant of an award under
the Plan, provide the Company with the right to repurchase Stock acquired pursuant to the Plan,
pursuant to which the Optionee shall be required to offer to the Company upon termination of
employment for any reason any Stock that the Optionee acquired under the Plan, with the price being
the then Fair Market Value of the Stock or, in the case of a termination for Cause, an amount equal
to the cash consideration paid for the Stock whichever is lesser, subject to such other terms and
conditions as the Committee may specify at the time of grant.

 12.

 

     The Committee may, at the time of grant of an Option under the Plan, obligate the Company to
repurchase Stock acquired pursuant to the Plan at the election of the Optionee. In such event, the
Company may satisfy the purchase price in cash or by a combination of cash and promissory note for
not more than 75% of the total purchase price payable over a period not to exceed five years,
together with reasonable interest in installments no less often than annually.

     (d) Forfeiture for Competition. The Committee may, at the time of the grant of an
award under the Plan, provide the Company with the right to repurchase, or require the forfeiture
of, Stock acquired pursuant to the Plan by any Optionee who, at any time within a period of time
specified by the Committee not to exceed twelve (12) months after the Optionee’s termination of
services with the Company or any Subsidiary or Parent Corporation, directly or indirectly competes
with, or is employed by a competitor of, the Company or any Subsidiary or Parent Corporation or
solicits employees or customers of the Company or any Subsidiary or Parent Corporation.

     (e) Restrictions on Transfer. As a further condition to the grant of any Option or
the issuance of Stock to the Optionee, the Optionee agrees to the following:

     (i) In the event the Company advises the Optionee that it plans an underwritten public
offering of its Stock in compliance with the Securities Act of 1933, as amended, and the
underwriter(s) seek to impose restrictions under which certain shareholders may not sell or
contract to sell or grant any Option to buy or otherwise dispose of part or all of their stock
purchase rights of the underlying Stock, the Optionee will not, for a period not to exceed 180 days
from the prospectus, sell or contract to sell or grant an option to buy or otherwise dispose of any
Option granted to Optionee pursuant to the Plan or any of the underlying Stock without the prior
written consent of the underwriter(s) or its representative(s)

     (ii) In the event the Company makes any public offering of its securities and determines in
its sole discretion that it is necessary to reduce the number of issued but unexercised stock
purchase rights so as to comply with any state’s securities or Blue Sky law limitations with
respect thereto, the Board shall have the right: (A) to accelerate the exercisability of any
Option and the date on which such Option must be exercised, provided that the Company gives the
Optionee prior written notice of such acceleration, and (B) to cancel any Option or portion of any
Option thereof which the Optionee does not exercise prior to or contemporaneously with such public
offering.

     The Company reserves the right to place a legend on any stock certificate issued upon the
exercise of an Option pursuant to the Plan to assure compliance with this Section 10.

     (f) Effect of Transfer/Leave of Absence. For purposes of any Option, the following
events shall not be deemed a termination of employment:

          (i) a transfer of an employee from the Company to a Parent Corporation or a Subsidiary, or a
transfer of an employee from a Parent Corporation or a Subsidiary to the Company or any other
Parent Corporation or Subsidiary; and

 13.

 

          (ii) a leave of absence, approved in writing by the Committee, for military service or
sickness, or for any other purpose approved by the Company if the period of such leave does not
exceed ninety (90) days (or such longer period as the Committee may approve, in its sole
discretion); and

          (iii) a leave of absence in excess of ninety (90) days, approved in writing by the Committee,
but only if the employee’s right to reemployment is guaranteed either by a statute or by contract,
and provided that, in the case of any leave of absence, the employee returns to work within 30 days
after the end of such leave.

Section 11. Effective Date of Plan.

     The Plan shall be effective on the date it is adopted by the Board. Adoption of the Plan is
subject to the condition of approval by the shareholders of the Company within 12 months before or
after the adoption of the Plan by the Board. Any Incentive Option granted after adoption of the
Plan by the Board will be treated as a Non-Qualified Option if shareholder approval is not obtained
within such 12-month period.

Section 12. Governing Law.

     To the extent that federal laws do not otherwise control, this Plan and all determinations
made and actions taken under this Plan shall be governed by the laws of the State of Delaware,
without regard to the conflicts of law provisions thereof, and construed accordingly.

 14.

 

AMENDMENT TO THE COMPELLENT TECHNOLOGIES, INC.

2002 STOCK OPTION PLAN

Section 5 of the Plan is hereby amended to add the following subsection (1):

     (1) Early Issuance and Repurchase Rights. The Committee shall have the discretion to
authorize the issuance of unvested shares of Stock pursuant to the exercise of an Option. In the
event of termination of the Optionee’s employment or services, all shares of Stock issued upon
exercise of an Option which are unvested at the time of cessation of employment or services shall
be non-transferable and subject to repurchase at the exercise price paid for such shares of Stock.
The terms and conditions upon which such repurchase right shall be exercisable (including the
period and procedure for exercise) shall be established by the Committee and set forth in the
agreement evidencing such right. All of the Company’s outstanding repurchase rights under this
Section are assignable by the Company at any time and shall remain in full force and effect in the
event of a Change in Control; provided that if the vesting of Options is accelerated as permitted
under the Plan, the repurchase rights under this Section shall terminate and all shares of Stock
subject to such terminated rights shall immediately vest in full. The Committee shall have the
discretionary authority, exercisable either before or after the Optionee’s cessation of employment
or services, to cancel the Company’s outstanding repurchase rights with respect to one or more
shares of Stock purchased or purchasable by the Optionee under an Option and thereby accelerate the
vesting of such Shares in whole or in part at any time.

Effective: March 25, 2003

 

 

SECOND AMENDMENT TO THE

COMPELLENT TECHNOLOGIES, INC. 2002 STOCK OPTION PLAN

	1.	 	Amendment of Section 1(d). The Plan is hereby amended by deleting Section 1(d)(ii)
so that the following language is no longer a part thereof:

     “(ii) A majority of the members of the Board of the Company shall not
be continuing directors.”

	2.	 	Remaining Terms. Except as modified hereby, the terms of the Plan shall remain in
full force and effect.

Effective April 7, 2005

 

 

THIRD AMENDMENT TO THE

COMPELLENT TECHNOLOGIES, INC. 2002 STOCK OPTION PLAN

	1.	 	Increase in Authorized Shares. An amendment to the Plan changing the number in the
first sentence of Section 3(a) of the Plan from “3,857,143” to “5,057,143” is hereby approved
and adopted.
	 
	2.	 	Remaining Terms. Except as amended hereby, the terms of the Plan shall remain in
full force and effect.

Adopted by written action of the Stockholders dated as of May 3, 2006.

 

 

FOURTH AMENDMENT TO THE

COMPELLENT TECHNOLOGIES, INC. 2002 STOCK OPTION PLAN

	1.	 	Increase in Authorized Shares. An amendment to the Plan changing the number in the
first sentence of Section 3(a) of the Plan from “5,057,143” to “7,857,143” is hereby approved
and adopted.
	 
	2.	 	Remaining Terms. Except as amended hereby, the terms of the Plan shall remain in
full force and effect.

Adopted, subject to Stockholder approval, by the Board of Directors on March 12, 2007.exv10w4

 

Exhibit
10.4

[Form Not Permitting

Exercise prior to Vesting]

Grant #       

INCENTIVE STOCK OPTION AGREEMENT

COMPELLENT TECHNOLOGIES, INC. 2002 STOCK OPTION PLAN

     THIS OPTION AGREEMENT is made as of the ___day of _________, 200___(the
 “Grant Date”)
between Compellent Technologies, Inc., a Minnesota corporation (the “Company”), and
_________, an employee of the Company (the “Optionee”).

     In accordance with the Company’s 2002 Stock Option Plan (as amended to date, the “Plan”), the
Company desires, by affording the Optionee an opportunity to purchase shares of its common stock
(the “Stock”), to provide the Optionee with an added incentive to continue his or her services to
the Company, and through his or her proprietary interest, to increase his or her personal
participation in the success of the Company.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto have agreed, and do hereby agree, as follows:

     1. Grant of Option. The Company hereby grants as of the Grant Date to the
Optionee the right and option (the “Option”) to purchase from the Company all or any part of an
aggregate amount of ___shares of the Stock of the Company on the terms and conditions herein
set forth. The Option is intended to be an “incentive stock option” as that term is defined in
Section 422 of the Internal Revenue Code.

     2. Purchase Price. The purchase price of the shares of the Stock covered by
this Option (“Option Shares”) shall be $.___per share.

     3. Exercise of Option. This Option shall be immediately exercisable. If
this Option is exercised for Option Shares that have not yet vested pursuant to the provisions of
Section 4, then any such shares of Stock shall be “Unvested Shares” until such time as they vest
pursuant to the provisions of Sections 4 or 5 and subject to a right of repurchase by the Company
as set forth in Section 7.

     4. Vesting of Option. Subject to the other provisions of this Agreement,
the Option and Option Shares shall be vested by the Optionee as follows:

	 	(a)	 	From and after the first anniversary of the Grant Date, if the Optionee is
then performing services for the Company, the Option is exercisable with respect to 25%
(rounded to the next lower whole share) of the aggregate Option Shares hereunder or any
part thereof; and
	 
	 	(b)	 	From and after each monthly anniversary of the Grant Date, beginning with the
13th month anniversary and ending on the 48th month anniversary
of the Grant

 

 

	 	 	 	Date, if the Optionee is then performing services for the Company on such
monthly anniversary date, the Option is exercisable with respect to an additional
2.0833% (rounded to the next lower whole share) of the aggregate Option Shares
hereunder or any part thereof; and
	 
	 	(c)	 	From and after the fourth anniversary of the Grant Date, if the Optionee is
then performing services for the Company, the Option is exercisable with respect to
100% of the aggregate Option Shares hereunder or any part thereof.

In no event shall the Option or any Option Shares vest after Optionee’s termination of employment
with the Company.

     5. Acceleration of Vesting. The vesting of the Option and the Option Shares
shall be accelerated such that 75% of the aggregate number of Option Shares shall be vested, if not
previously vested, upon the occurrence of the effective date of a Change in Control of the Company,
as defined in the Plan. Option Shares shall continue to vest pursuant to the provisions of Section
4(b) hereof, in the event that the vesting of such Option Shares has not been accelerated pursuant
to the provisions of this Section 5.

     6. Expiration of Option. The term of the Option shall be for a period of
ten (10) years from the Grant Date, subject to earlier termination as follows:

	 	(a)	 	In the event of the Optionee’s termination of employment with the Company by
reason of the Optionee’s disability, retirement or death, the Optionee (or in the event
of death, his or her personal representative or the person or persons to whom the
Optionee’s rights under the Option shall pass by will or the laws of descent and
distribution) may exercise the Option but only for part or all of the Option Shares for
which the Option is exercisable as of the date of the Optionee’s termination for a
period of one year following such termination, and thereafter any unexercised portion
of the Option shall terminate and be deemed canceled.
	 
	 	(b)	 	In the event of the Optionee’s termination of employment with the Company for
Cause, as defined in the Plan, the Option shall terminate immediately upon such
termination of service.
	 
	 	(c)	 	In the event of the Optionee’s termination of employment with the Company for
any other reason other than as described in (a) and (b) above, the Optionee may
exercise the Option but only for part or all of the Option Shares for which the Option
is exercisable as of the date of termination for a period of 90 days
following such termination, and thereafter any unexercised portion of the Option
shall terminate and be deemed canceled.

Neither the Plan nor this Agreement shall confer any right to continued service as an employee of
the Company, nor interfere with the right of the Optionee to resign or be removed as an employee of
the Company.

 

 

     7. Repurchase Right.

	 	(a)	 	Grant. The Corporation shall have the right (the “Repurchase Right”)
to repurchase, at the Exercise Price, any or all of the Option Shares which are
Unvested Shares at the time Optionee’s employment with the Company ceases.
	 
	 	(b)	 	Exercise of Repurchase Right. The Repurchase Right shall be
exercisable by written notice delivered to Optionee at any time during the sixty day
period following the date Optionee ceases for any reason to be employed by the Company.
The notice shall indicate the number of Unvested Shares to be repurchased, the
aggregate repurchase price to be paid for such shares and the date on which repurchase
is to be effected, such date to be not more than thirty days after the date of such
notice. The certificates representing the Unvested Shares to be repurchased shall be
delivered to the Corporation on the closing date specified for the repurchase.
Concurrently with the receipt of such stock certificates, the Corporation shall pay to
the Optionee, in cash or cash equivalents, an amount equal to the aggregate repurchase
price.
	 
	 	(c)	 	Termination of Repurchase Right. The Repurchase Right shall terminate
with respect to any Unvested Shares for which it is not timely exercised under this
Section 6. In addition, the Repurchase Right shall terminate and cease to be
exercisable as and when the Option Shares vest in accordance with the provisions of
Section 4.

     8. Method of Exercising Option. Subject to the terms and conditions of this
Option Agreement, the Option may be exercised by written notice to the Secretary of the Company at
the principal office of the Company. Such notice shall (i) state the election to exercise the
Option and the number of Option Shares in respect of which it is being exercised, (ii) be signed by
the person so exercising the Option, and (iii) be accompanied by payment of the full purchase price
of such shares. The purchase price shall be payable in cash or by check or bank draft payable to
the Company, or, provided such form of payment does not result in a charge to earnings of the
Company for financial accounting purposes, by delivery of shares of unrestricted Stock of the
Company with a fair market value equal to the purchase price or by a combination of cash and such
Stock, whose fair market value shall equal the purchase price. For purposes of this paragraph, the
“fair market value” of the Stock of the Company shall be the fair market value of the Stock as of
the date the Option is exercised established in the manner set forth in the Plan. In the event any
person other than the Optionee shall exercise the Option, such notice shall be accompanied by
appropriate proof of the right of such person to exercise the Option. All shares of Stock that
shall be purchased upon the exercise of the Option as provided herein shall be fully paid and
nonassessable.

     9. Investment Certificate. Prior to the receipt of the certificates
pursuant to the exercise of the Option granted hereunder, the Optionee shall, if required in the
Company’s discretion, demonstrate an intent to hold the Stock acquired by exercise of the Option
for investment and not with a view to resale or distribution thereof to the public, by delivering
to the Company an investment certificate or letter in such form as the Company may require.

 

 

     10. Transfer of Option Shares; Deposit of Option Shares.

	 	(a)	 	The Optionee acknowledges that (i) Optionee shall not transfer, assign,
encumber or otherwise dispose of any Options Shares that are Unvested Shares and (ii)
Option Shares that are not Unvested Shares may not be sold, transferred, pledged or
otherwise disposed of unless the Stock is registered under the Securities Act of 1933,
or unless the Company has received an opinion of counsel satisfactory to the Company
that said registration is not required. Stock certificates representing Option Shares
that are Unvested Shares shall be endorsed with a restrictive legend substantially in
the following form:
	 
	 	 	 	“The shares represented by this certificate are subject to certain repurchase rights
granted to the Corporation and accordingly may not be sold, assigned, transferred,
encumbered, or in any manner disposed of except in conformity with the terms of a
written agreement between the Corporation and the registered holder of the shares.
A copy of such agreement is maintained at the Corporation’s principal corporate
offices.”
	 
	 	(b)	 	Each certificate representing Unvested Shares that is issued pursuant to
Section 8 hereof shall be deposited by the Corporation with Secretary of the
Corporation or a custodian designated by the Secretary. Annually, or at such other
time as the Optionee may reasonably request, the Corporation shall promptly cause to be
issued a certificate or certificates registered in the Optionee’s name representing any
Option Shares that have vested pursuant to Sections 4 or 5 hereof, free of the legend
set forth in Section 10(a) above (but containing any legend required by securities
laws), and shall cause such certificate to be delivered to Optionee.

     11. Company’s Right of First Refusal. In addition to the Company’s right to
repurchase Unvested Shares in accordance with Section 7, before any shares of Stock acquired upon
exercise of this Option by the Optionee or any transferee of the Optionee (the Optionee or such
transferee, the “Holder”) may be sold or otherwise transferred, the Company shall have a right of
first refusal to purchase such Option Shares on the terms and conditions set forth below (the
“Right of First Refusal”):

	 	(a)	 	The Holder shall deliver to the Company a written notice (the “Notice”)
stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Option
Shares; (ii) the name of each proposed purchaser or other transferee (”Proposed
Transferee”); (iii) the number of Option Shares to be transferred to each Proposed
Transferee; and (iv) the bona fide cash price or other consideration for which the
Holder proposes to transfer such Option Shares (the “Offered Price”), and the
Holder shall offer the Option Shares at the Offered Price to the Company or its
assignee.
	 
	 	(b)	 	At any time within 30 days after receipt of the Notice, the Company or its
assignee may, by giving written notice to the Holder, elect to purchase all, but not
less than all, of the Option Shares proposed to be transferred to any one or more

 

 

	 	 	 	of the Proposed Transferees, at the purchase price determined in accordance with Section
11(c) below.
	 
	 	(c)	 	The purchase price (“Purchase Price”) for the Option Shares purchased by the
Company or its assignee under this Section 11 shall be the Offered Price. If the
Offered Price includes consideration other than cash, the cash equivalent value of the
non-cash consideration shall be determined by the Board of Directors of the Company in
good faith.
	 
	 	(d)	 	Payment of the Purchase Price shall be made, at the option of the Company or
its assignee, in cash (by check) within 30 days after receipt of the Notice, or in the
manner and at the times set forth in the Notice.
	 
	 	(e)	 	If all of the Option Shares proposed in the Notice to be transferred to a
Proposed Transferee are not purchased by the Company or its assignee as provided in
this Section 11, then the Holder may sell or otherwise transfer such Option Shares to
such Proposed Transferee at the Offered Price or at a higher price, provided that (i)
such sale or other transfer is consummated within 120 days after the date of the
Notice, (ii) such sale or other transfer is effected in accordance with any applicable
securities laws and (iii) the Proposed Transferee agrees in writing that the provisions
of this Section 11 shall continue to apply to the Option Shares in the hands of such
Proposed Transferee. If the Option Shares described in the Notice are not transferred
to the Proposed Transferee within such period, the Company or its assignee shall again
be offered the Right of First Refusal before any Option Shares held by the Holder may
be sold or otherwise transferred.
	 
	 	(f)	 	Anything to the contrary contained in this Section 11 notwithstanding, the
transfer of any or all of the Option Shares by will or laws of descent and distribution
upon the death of the Optionee or by gift (provided the Optionee obtains the Company’s
prior written consent to such transfer by gift) will be exempt from the provisions of
this Section 11. In such case, the recipient of the Option Shares shall receive and
hold the Option Shares so transferred subject to the provisions of this Section 11, and
there shall be no further transfer of such Option Shares except in accordance with the
terms hereof.
	 
	 	(g)	 	The Right of First Refusal shall terminate upon the first sale of shares of
Stock to the general public pursuant to a registration statement filed with and
declared effective by the Securities and Exchange Commission under the Securities Act
of 1933.

     12. Limitation on Stock Received Upon Exercise. In the event the Company
advises the Optionee that it plans an underwritten public offering of its Stock in compliance with
the Securities Act of 1933, as amended, and the underwriter(s) seek to impose restrictions under
which certain stockholders may not sell or contract to sell or grant any option to buy or otherwise
dispose of part or all of any Stock acquired pursuant to the exercise of options granted under the
Plan, the Optionee will not, for a period not to exceed 180 days from the effective date of the
Company’s registration statement, sell or contract to sell or grant an option to buy or otherwise

 

 

dispose of any shares of Stock acquired pursuant to the exercise of any option granted to Optionee
pursuant to the Plan without the prior written consent of the underwriter(s) or its
representative(s).

     13. Transfer of Option. The Option may not be transferred by the Optionee
except pursuant to will or the laws of descent and distribution, and the Option may be exercised,
during the lifetime of the Optionee, only by the Optionee.

     14. Status and Rights as a Shareholder. Neither the Optionee nor the
Optionee’s executor, administrator, heirs, or legatees, shall be or have any rights or privileges
of a shareholder of the Company in respect of the Stock transferable upon exercise of the Option
granted hereunder, unless and until certificates representing such Stock shall be endorsed,
transferred, and delivered, and the transferee has caused the Optionee’s name to be entered as the
shareholder of record on the books of the Company.

     15. Company Authority. The existence of the Option herein granted shall not
affect in any way the right or power of the Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital
structure of its business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference securities ahead of or affecting the Stock of the Company
or the rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

     16. Disputes. As a condition of the granting of the Option herein granted,
the Optionee agrees, for the Optionee and the Optionee’s personal representatives and successors,
that any dispute or disagreement which may arise under or as a result of or pursuant to this
Agreement shall be determined by the Board of Directors of the Company, in its sole discretion, and
that any interpretation by said Board of the terms of this Agreement shall be final, binding and
conclusive.

     17. Option Plan. This Option is subject to certain additional terms and
conditions set forth in the Plan pursuant to which this Option has been issued, which is hereby
incorporated by reference. A copy of the Plan is on file with the Secretary of the Company and by
acceptance hereof the Optionee agrees to and accepts this Option subject to the terms of the Plan.

     18. Binding Effect. This Agreement shall be binding upon the heirs,
executors, administrators and successor of the parties hereto.

 

 

     IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement as of the day
and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	COMPELLENT TECHNOLOGIES, INC.	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	OPTIONEE	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 

 

 

[Form Not Permitting

Exercise prior to Vesting]

Grant #       

INCENTIVE STOCK OPTION AGREEMENT

COMPELLENT TECHNOLOGIES, INC. 2002 STOCK OPTION PLAN

     THIS OPTION AGREEMENT is made as of the ___day of __________, 200___(the “Grant Date”) between
Compellent Technologies, Inc., a Minnesota corporation (the “Company”), and _________an
employee of the Company (the “Optionee”).

     In accordance with the Company’s 2002 Stock Option Plan (as amended to date, the “Plan”), the
Company desires, by affording the Optionee an opportunity to purchase shares of its common stock
(the “Stock”), to provide the Optionee with an added incentive to continue such Optionee’s services
to the Company, and, through the Optionee’s proprietary interest, to increase the Optionee’s
personal participation in the success of the Company.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto have agreed, and do hereby agree, as follows:

     1. Grant of Option. The Company hereby grants as of the Grant Date to the
Optionee the right and option (the “Option”) to purchase from the Company all or any part of an
aggregate amount of ___shares (the “Shares”) of the Stock of the Company on the terms
and conditions herein set forth. The Option is intended to be an “incentive stock option,” as such
term is defined in Section 422 of the Internal Revenue Code.

     2. Purchase Price. The purchase price of the Shares covered by this Option shall be
$.___per share.

     3. Exercise of Option. Subject to the other provisions of this Agreement, the Option
shall be exercisable by the Optionee as follows:

 

 

     (a) From and after the first anniversary of the Grant Date, if the Optionee is
then performing services for the Company, the Option is exercisable with respect to 25%
(rounded to the next lower whole share) of the Shares or any part thereof; and

     (b) From and after each monthly anniversary of the Grant Date, beginning with the
13th month anniversary and ending on the 48th month anniversary of the
Grant Date, if the Optionee is then performing services for the Company on such monthly
anniversary date, the Option is exercisable with respect to an additional 2.0833% (rounded
to the next lower whole Share) of the Shares or any part thereof; and

     (c) From and after the fourth anniversary of the Grant Date, if the Optionee
is then performing services for the Company, the Option is exercisable with respect to 100%
of the aggregate Shares or any part thereof.

     4. Expiration of Option. The term of the Option shall be for a period of ten (10)
years from the Grant Date, subject to earlier termination as follows:

     (a) In the event of the Optionee’s termination of employment with the Company by reason
of the Optionee’s disability, retirement or death, the Optionee (or in the event of death,
the Optionee’s personal representative or the person or persons to whom the Optionee’s
rights under the Option shall pass by will or the laws of descent and distribution) may
exercise the Option but only for part or all of the Shares for which the Option is
exercisable as of the date of the Optionee’s termination for a period of one year following
such termination, and, thereafter, any unexercised portion of the Option shall terminate and
be deemed canceled.

     (b) In the event of the Optionee’s termination of employment with the Company for
Cause, as such term is defined in the Plan, the Option shall terminate immediately upon such
termination of service.

     (c) In the event of the Optionee’s termination of employment with the Company for any
other reason other than as described in (a) and (b) above, the Optionee may exercise the
Option but only for part or all of the Shares for which the Option is exercisable as of the
date of termination for a period of 90 days following such termination, and, thereafter, any
unexercised portion of the Option shall terminate and be deemed canceled.

Neither the Plan nor this Agreement shall confer any right to continued service as an employee of
the Company, nor interfere with the right of the Optionee to resign or be removed as an employee of
the Company.

     5. Method of Exercising Option. Subject to the terms and conditions of this Option
Agreement, the Option may be exercised by written notice to the Secretary of the Company at the
principal office of the Company. Such notice shall (i) state the election to exercise the Option
and the number of Shares in respect of which it is being exercised, (ii) be signed by the person so
exercising the Option, and (iii) be accompanied by payment of the full purchase price of such
Shares. The purchase price shall be payable in cash or by check or bank draft payable to

 

 

the Company, or, provided such form of payment does not result in a charge to earnings of the
Company for financial accounting purposes, by delivery of shares of Stock of the Company with a
fair market value equal to the purchase price, or by a combination of cash and such shares, with a
fair market value equal the purchase price. For purposes of this paragraph, the “fair market
value” of the Stock of the Company shall be the fair market value of the Stock as of the date the
Option is exercised established in the manner set forth in the Plan. In the event any person other
than the Optionee shall exercise the Option, such notice shall be accompanied by appropriate proof
of the right of such person to exercise the Option. All Shares that shall be purchased upon the
exercise of the Option as provided herein shall be fully paid and nonassessable.

     6. Investment Intent; Securities Law Compliance. Prior to the receipt of the
certificates pursuant to the exercise of the Option granted hereunder, the Optionee shall, if
required in the Company’s discretion, demonstrate an intent to hold the Shares acquired upon
exercise of the Option for investment and not with a view to resale or distribution thereof to the
public, by delivering to the Company an investment letter in such form as the Company may require.
The Optionee acknowledges that the Shares acquired upon exercise of this Option may not be sold,
transferred, pledged or otherwise disposed of unless the Shares are registered under the Securities
Act of 1933, or unless the Company has received an opinion of counsel satisfactory to the Company
that such registration is not required.

     7. Company’s Right of First Refusal. Before any Shares acquired upon exercise of this
Option by the Optionee or any transferee of the Optionee (the Optionee or such transferee, the
“Holder”) may be sold or otherwise transferred, the Company shall have a right of first refusal to
purchase such Shares on the terms and conditions set forth below (the “Right of First Refusal”):

     (a) The Holder shall deliver to the Company a written notice (the “Notice”)
stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares;
(ii) the name of each proposed purchaser or other transferee (”Proposed Transferee”); (iii)
the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide
cash price or other consideration for which the Holder proposes to transfer such Shares (the
“Offered Price”), and the Holder shall offer the Shares at the Offered Price to the Company
or its assignee.

     (b) At any time within 30 days after receipt of the Notice, the Company or
its assignee may, by giving written notice to the Holder, elect to purchase all, but not
less than all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with Section 7(c) below.

     (c) The purchase price (“Purchase Price”) for the Shares purchased by the
Company or its assignee under this Section 7 shall be the Offered Price. If the Offered
Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith.

     (d) Payment of the Purchase Price shall be made, at the option of the Company
or its assignee, in cash (by check) within 30 days after receipt of the Notice, or

 

 

in the manner and at the times set forth in the Notice.

     (e) If all of the Shares proposed in the Notice to be transferred to a
Proposed Transferee are not purchased by the Company or its assignee as provided in this
Section 7, then the Holder may sell or otherwise transfer such Shares to such Proposed
Transferee at the Offered Price or at a higher price, provided that (i) such sale or other
transfer is consummated within 120 days after the date of the Notice, (ii) such sale or
other transfer is effected in accordance with any applicable securities laws and (iii) the
Proposed Transferee agrees in writing that the provisions of this Section 7 shall continue
to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in
the Notice are not transferred to the Proposed Transferee within such period, the Company or
its assignee shall again be offered the Right of First Refusal before any Shares held by the
Holder may be sold or otherwise transferred.

     (f) Anything to the contrary contained in this Section 7 notwithstanding, the
transfer of any or all of the Shares by will or laws of descent and distribution upon the
death of the Optionee or by gift (provided the Optionee obtains the Company’s prior written
consent to such transfer by gift) will be exempt from the provisions of this Section 7. In
such case, the recipient of the Shares shall receive and hold the Shares so transferred
subject to the provisions of this Section 7, and there shall be no further transfer of such
Shares except in accordance with the terms hereof.

     (g) The Right of First Refusal shall terminate upon the first sale of shares
of Stock to the general public pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of 1933.

     8. Limitation on Stock Received Upon Exercise. In the event the Company advises the
Optionee that it plans an underwritten public offering of its Stock in compliance with the
Securities Act of 1933, as amended, and the underwriters seek to impose restrictions under which
certain shareholders may not sell or contract to sell or grant any option to buy or otherwise
dispose of part or all of Stock acquired pursuant to the exercise of options granted under the
Plan, the Optionee will not, for a period not to exceed 180 days from the effective date of the
Company’s registration statement, sell or contract to sell or grant an option to buy or otherwise
dispose of any shares of Stock acquired pursuant to the exercise of any Option granted to Optionee
pursuant to the Plan without the prior written consent of the underwriters or their
representatives.

     9. Transfer of Option; Assignment. The Option may not be transferred by the Optionee
except pursuant to will or the laws of descent and distribution, and the Option may be exercised,
during the lifetime of the Optionee, only by the Optionee. The Right of First Refusal shall be
freely assignable by the Company.

     10. Status and Rights as a Shareholder. Neither the Optionee nor the Optionee’s
executor, administrator, heirs or legatees shall be or have any rights or privileges of a
shareholder of the Company in respect of the Shares transferable upon exercise of the Option
granted hereunder, unless and until certificates representing the Shares shall be endorsed,

 

 

transferred, and delivered, and the transferee has caused the Optionee’s name to be entered as
the shareholder of record on the books of the Company.

     11. Company Authority. The existence of the Option herein granted shall not affect in
any way the right or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure
of its business, or any merger or consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference securities ahead of or affecting the Stock of the Company or the
rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

     12. Disputes. As a condition of the granting of the Option herein granted, the
Optionee agrees, for the Optionee and the Optionee’s personal representatives and successors, that
any dispute or disagreement which may arise under or as a result of or pursuant to this Agreement
shall be determined by the Board of Directors of the Company, in its sole discretion, and that any
interpretation by said Board of the terms of this Agreement shall be final, binding and conclusive.

     13. Option Plan. This Option is subject to certain additional terms and conditions
set forth in the Plan pursuant to which this Option has been issued, which is hereby incorporated
by reference. A copy of the Plan is on file with the Secretary of the Company and by acceptance
hereof the Optionee agrees to and accepts this Option subject to the terms of the Plan.

     14. Binding Effect. This Agreement shall be binding upon the heirs, executors,
administrators and successor of the parties hereto.

     IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement as of the day
and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	COMPELLENT TECHNOLOGIES, INC.	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	OPTIONEE	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 

 

 

EXERCISE NOTICE

COMPELLENT TECHNOLOGIES, INC. 2002 STOCK OPTION PLAN

     Exercise of Option. Effective as of today,                                         , the undersigned

                                         (“Purchaser”) hereby elects to purchase                      shares (the “Shares”) of the
Common Stock of Compellent Technologies, Inc. (the “Company”) under and pursuant to the Compellent
Technologies, Inc. 2002 Stock Option Plan (as amended to date, the “Plan”) and Stock Option
Agreement #                     dated                                         , 200      (the “Option Agreement”). The purchase price for the
Shares shall be $                    , as required by the Option Agreement.

     Delivery of Payment. Purchaser herewith delivers to the Company the full purchase
price for the Shares in the following form:

	 	 	 	 	 
	 

	 	 
	 	Cash or check in the amount of $                    ; or
	 

	 	 	 	 
	 

	 	 	 	                     Shares of previously acquired shares of Common Stock.
	 

	 	 	 	 

     Representation of Optionee. Optionee acknowledges that Optionee is acquiring the
Shares for investment and without a view to distribution of the Shares to third parties.

     Rights as Shareholder. Subject to the terms and conditions of this Agreement,
Optionee shall have all of the rights of a shareholder of the Company with respect to the Shares
from and after the date that Optionee delivers full payment of the Exercise Price until such time
as Optionee disposes of the Shares. Optionee acknowledges that:

 

 

	 	(a)	 	There is presently no generally recognized public market through which the
Shares may be sold, and the Shares are not registered under federal or state securities
laws for sale to the public. The Company does not have any intent at the present time
to register such Shares for sale to the public. Therefore, the Optionee may not be
able to sell the Shares or recognize any value from the holding of such Shares.
	 
	 	(b)	 	In the event the Company registers its shares for sale to the public in an
initial public offering, the Company may choose not to register the Shares held by the
Optionee for sale in such public offering, and, in that event, the Optionee may be
restricted as to the time and manner in which such Shares may be sold in the public
market.
	 
	 	(c)	 	In the event the Company advises the Optionee that it plans an underwritten
public offering of its Common Stock in compliance with the Securities Act of 1933 and
the underwriters seek to impose restrictions under which the Optionee and other
shareholders may not sell, contract to sell or otherwise dispose of part or all of
their shares of Common Stock, the Optionee will not, for a period not to exceed 180
days from the prospectus, sell, contract to sell, grant an option to buy or otherwise
dispose of any Shares acquired upon exercise of an Option without the prior written
consent of the underwriters or their representatives.
	 
	 	(d)	 	The holding of any Shares received upon exercise of the Option shall not
entitle the Optionee to continued employment with the Company, nor shall it interfere
in any way with the right of the Company to terminate the Optionee’s employment at any
time.
	 
	 	(e)	 	The Company may cause a legend or legends to be put on any certificates
representing the Shares to make reference to securities law and other restrictions on
resale of the Shares.
	 
	 	(f)	 	If so provided in the Option Agreement, transfer of the Shares by the Optionee
is subject to a right of first refusal on the part of the Company or its assignee. If
so provided in the Option Agreement, the Shares are also subject to a right of
repurchase on the part of the Company if Optionee’s employment with the Company is
terminated.
	 
	 	(g)	 	This Exercise Notice, the Plan and the Option Agreement constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter hereof, and
such agreement is governed by Delaware law, except for that body of law pertaining to
conflict of laws or to the extent preempted by federal law.

     Tax Consultation. Optionee understands that Optionee may suffer adverse tax
consequences as a result of Optionee’s purchase or disposition of the Shares. Optionee represents
that Optionee has consulted with any tax consultants Optionee deems advisable in connection with
the purchase or disposition of the Shares, and that Optionee is not relying on the

 

 

Company for any tax advice. To the extent the exercise of the Option results in taxation to
the Optionee, the Optionee authorizes the Company, to the extent permitted by law, to satisfy the
withholding of taxes (not to exceed the minimum required federal, state and FICA withholding
amount) in the following manner:

	 	 	 	 	 
	 

	 	 
	 	Deduct any such taxes from any payment of any kind otherwise due to the Optionee.
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 
	 	Retain from the number of Shares that would otherwise be deliverable to the Optionee equal in value to the withholding obligation; or
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 
	 	Accept delivery of shares of Common Stock already owned by the Optionee equal in value to the withholding obligation.
	 

	 	 	 	 
	 
	 	 	 	 

 

 

	 	 	 	 	 	 	 
	Submitted by:	 	 	 	Accepted by:
	 

	 	 	 	 	 	 
	OPTIONEE	 	 	 	COMPELLENT TECHNOLOGIES, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 	 	 	 	 	 	 
	Signature
	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 
	 	 	 	 	 	 	 
	Print Name
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Social Security Number
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Address

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