Document:

Exhibit
10.10

 

METASTORM, INC.
2004 OMNIBUS STOCK PLAN (THE “PLAN”)

 

RESTRICTED
STOCK UNIT GRANT AGREEMENT

 

This Restricted Stock
Unit Grant Agreement (the “Agreement”) is entered into by and between Metastorm, Inc.,
a Maryland Corporation, (the “Corporation”) and                 ,
the (“Grantee”) effective as                 ,
the (“Grant Date”).

 

Grantee
acknowledges and agrees that this Agreement replaces and supersedes in its
entirety all previous commitments or agreements by the Corporation to pay to Grantee
a special bonus, portion of a bonus pool or “carve-out” based on a Change in
Control of the Corporation, and no such previous commitment or agreement shall
be of any further force or effect.

 

1.                                      AWARD
OF RESTRICTED STOCK UNITS:

 

Subject to the provisions
of this Agreement and pursuant to the provisions of the Plan, the Committee hereby
grants to the Grantee a Restricted Stock Unit Award on the Grant Date subject
to the vesting requirements, restrictions and other conditions stated herein, for
such number of Restricted Stock Units of the Corporation (“Units”), as are stated
in the Restricted Stock Unit Overview below. Each Unit entitles the Grantee to
the issuance of one share of the Class AA Preferred Stock of the Corporation
(a “Share”) subject to the vesting requirements, restrictions and other
conditions stated herein, but does not entitle the Grantee to any of the rights
of a Corporation shareholder except as otherwise stated herein.

 

RESTRICTED STOCK
UNIT OVERVIEW

 

Number of Units:                    

 

2.                                      RESTRICTIONS:

 

(a)                                  Vesting Schedule. The
Units shall be subject to forfeiture until such Units vest in accordance with
the applicable schedule set forth below:

 

(i)                                     Regular Vesting Schedule: 
Fifty percent (50%)  of the Units will
vest on September 1, 2004, and an additional six and one-quarter percent
(6.25%) of the Units will vest on the first day of each third month thereafter,
until the Units are one hundred percent (100%) vested on September 1, 2006,
provided Grantee has continued in the employment of the Corporation or any
Parent or Subsidiary of the Corporation from the Grant Date through any such vesting
date.

 

 

(ii)                                  Accelerated Vesting Schedule:  One hundred percent (100%) of the unvested
Units will vest upon the earliest of the following:

 

(A) the first
anniversary of a Change in Control of the Corporation occurring after the Grant
Date, provided the Grantee has continued in the employment of the Corporation
or any Parent or Subsidiary of the Corporation from the Grant Date through the
date of the Change in Control and in the employment of the acquiring or
surviving entity or a parent or subsidiary from the date of the Change in
Control through such first anniversary;

 

(B)  the date of
such a Change in Control of the Corporation, provided the Grantee has continued
in the employment of the Corporation or any Parent or Subsidiary of the
Corporation from the Grant Date through the date of the Change in Control and
Grantee is not offered a position in the acquiring or surviving entity or a
parent or subsidiary at a salary and benefits that are comparable in the
aggregate to those received by Grantee from the Corporation or any Parent or
Subsidiary of the Corporation immediately prior to the Change in Control; or

 

(C) the date of
termination of Grantee’s employment without Cause (as defined below) by the
acquiring or surviving entity or a parent or subsidiary or resignation of the
Grantee for Good Reason (as defined below) from any such entity after such
Change in Control and prior to the first anniversary thereof.

 

(b)                                 Other Restrictions.

 

(i)                                     Nontransferable. The Units are not transferable by the Grantee
by means of sale, assignment, exchange, pledge, hypothecation, or otherwise
(other than by will or the laws of descent and distribution).

 

(ii)                                  No Rights of Shareholder. The Grantee shall not be entitled
to any of the rights of a shareholder of the Corporation prior to issuance of
the Shares subject to the Units, including the right to vote the Shares which
are referenced in the Units and receive dividends and/or other distributions
declared on such Shares.

 

(iii)                               Dividend Equivalents. If on any date prior to issuance of
the Shares subject to the Units, the Corporation shall pay any dividend on the
Shares (other than a dividend payable in Shares), the number of Units credited
to Grantee shall as of such date be increased by an amount equal to:  (A) the product of the number of Units
credited to the Grantee as of the record date for such dividend, multiplied by
the per share amount of any dividend (or, in the case of any dividend payable
in property other than cash, the per share value of such dividend, as
determined in good faith by the Board of Directors of the Corporation), divided
by (B) the Fair Market Value of a Share on the payment date of such dividend.
In the case of any dividend declared on Shares which is payable in Shares, the
number of Units credited to the Employee shall be increased by a

 

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number equal to the
product of (X) the aggregate number of Units that have been credited to
the Grantee through the related dividend record date, multiplied by (Y) the
number of Shares (including any fraction thereof) payable as a dividend on a
Share.

 

(c)                                  Definitions.

 

(i)                                     Cause. For purposes of this Agreement, “Cause” means (A) the
substantial failure to perform the duties of Grantee’s position (other
than as a result of disability) which, if capable of correction, has not been
corrected by Grantee for a period of ninety (90) days following notice of same,
(B) willful misconduct or gross negligence, (C) conviction of a
felony, or (D) Grantee’s engaging in actions or inactions intentionally
designed to provoke the termination of Grantee’s employment and subsequent
continuation of these behaviors after being advised to desist by the Board.

 

(ii)                                  Good Reason. For purposes of this Agreement, “Good Reason”
means (A) a decrease in salary or benefits to a level not comparable in
the aggregate to those received by Grantee from the Corporation or any Parent
or Subsidiary of the Corporation immediately prior to the Change in Control, (B) a
material diminution of duties or responsibilities of the Grantee other than by
reason of being in a comparable position with a division, subsidiary, affiliate
or other unit of the acquiring or surviving entity or its parent or (C) the
Grantee’s relocation, without his consent, to an office of the Corporation or
any Parent or subsidiary of the Corporation or any surviving entity or unit
thereof located more than fifty (50) miles from Columbia, Maryland.

 

3.                                      ISSUANCE
OF SHARES:

 

(a)                                  Issuance of Shares. Shares equal in
number to the Units which have then vested under Section 2, if any, shall
be registered on the Corporation’s books and records (except for any Shares
which are withheld to satisfy any tax withholding requirement) in the name of
the Grantee and/or share certificates covering such Shares shall be delivered
to the Grantee (or his estate, as may be applicable) in full payment and
satisfaction of such Units as soon as practicable after the earliest of the
following dates which comes on or after the date of vesting:

 

(i)  The fifth
anniversary of the Grant Date;

 

(ii)  The date of a
Change in Control of the Corporation; or

 

(iii)  The date of
any accelerated vesting of the Units that occurs under Section 2(a)(ii).

 

(b)                                 Transfer Restrictions. Transfer of such
Shares by the Grantee shall be subject to the Articles of Incorporation and
Bylaws of the Corporation and Appendix A hereto and any applicable securities
laws or regulations governing transferability of shares of the Corporation.

 

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(c)                                  Securities Regulations.  In the
event that the Units and any Shares issued hereunder are issued without
registration under the Securities Act of 1933, as amended (the “Act”), the
Grantee agrees to the following representations and understandings:

 

(i)                                     The
Grantee is acquiring the Units and Shares for his own account for investment
with no present intention of dividing the interest with others or of reselling
or otherwise disposing of any of the Units.

 

(ii)                                  As
a condition to any transfer of the Units and Shares, the Grantee understands
that the Corporation will require an opinion of counsel satisfactory to the Corporation
to the effect that such transfer does not require registration under the Act or
any state securities law.

 

(iii)                               The
Corporation is not obligated to comply with the registration requirements of
the Act or with the requirements for an exemption under Regulation A under the
Act for benefit of the Grantee.

 

(iv)                              The
certificates for any Shares to be issued to the Grantee shall contain
appropriate legends to reflect the restrictions on transferability imposed by
the Act.

 

(v)                                 Since
the Units and/or Shares have not been registered under the Act, they must be
held indefinitely until an exemption from the registration requirements of the
Act is available or they are subsequently registered.

 

(d)                                 Stock Restrictions Appendix.  As a
condition to the grant of an Award hereunder, Shares issued hereunder shall be
subject to Appendix A hereto entitled “Stock Restrictions”.

 

4.                                      TERMINATION
OF EMPLOYMENT:

 

(a)                                  Vesting. If the Grantee terminates
employment with the Corporation or any Parent or Subsidiary of the Corporation for
any reason, the Units shall be vested only to the extent that they were vested
as of such date of termination of employment, and no further vesting shall
occur thereafter, unless the Committee and the Grantee shall otherwise agree in
a written modification to this Agreement.

 

(b)                                 Forfeiture. Any Units which have
not then become vested pursuant to Section 2 hereof shall be forfeited to
the Corporation upon a termination of employment of the Grantee with the Corporation
or any Parent or Subsidiary of the Corporation for any reason. No consideration
shall be payable to the Grantee from the Corporation or otherwise with respect
to the forfeited Units, except as otherwise determined by the Committee.

 

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5.                                      MISCELLANEOUS:

 

(a)                                  Withholding Taxes.  The Corporation
or any Parent or Subsidiary of the Corporation shall effect a withholding of
Shares to be issued hereunder in such number whose aggregate Fair Market Value
at such time equals the amount of any federal, state or local taxes or any applicable
taxes or other withholding of any jurisdiction required by law to be withheld
as a result of the issuance of the Shares in whole or in part; provided,
however, that the value of the Shares withheld by the Corporation may not
exceed the statutory minimum withholding amount required by law. In lieu of
such deduction, the Grantee may elect to make a cash payment to the Corporation
or any Parent or Subsidiary of the Corporation equal to the amount required to
be withheld.

 

(b)                                 Impact on Other Benefits.  The
value of the Units (either on the Grant Date or at the time the Units are
vested or distributable) shall not be includable as compensation or earnings
for purposes of any other benefit plan offered by the Corporation.

 

(c)                                  Right to Continued Employment.  Nothing
in the Plan or this Agreement shall be construed as a contract of employment
between the Corporation or any Parent or Subsidiary of the Corporation and the
Grantee, or as a contractual right of the Grantee to continue in the employ of
the Corporation or any Parent or Subsidiary of the Corporation, or as a
limitation of the right of the Corporation or any Parent or Subsidiary of the Corporation
to discharge the Grantee at any time.

 

(d)                                 Prevailing Laws.  This
Agreement shall be construed and enforced in accordance with and governed by
the laws of the state of Maryland.

 

(e)                                  Successors.  This Agreement
shall be binding upon and inure to the benefit of the successors, assigns and
heirs of the respective parties.

 

(f)                                    Headings. Headings in this Agreement
are for reference purposes only and shall not affect the meaning or
interpretation of this agreement.

 

(g)                                 Notices.  All notices and
other communications made or given pursuant to the Agreement shall be in
writing and shall be sufficiently made or given if hand delivered or mailed by
certified mail, addressed to Grantee at the address contained in the records of
the Corporation, or addressed to the Committee, care of the Corporation for the
attention of its Secretary at its principal office or, if the receiving party
consents in advance, transmitted and received via telecopy or via such other
electronic transmission mechanism as may be available to the parties.

 

(h)                                 Entire Agreement; Modification.  The
Agreement contains the entire agreement between the parties with respect to the
subject matter contained herein and may not be modified, except as
provided in the Plan or in a written document signed by each of the parties
hereto.

 

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(i)                                     Conformity with Plan. This
Agreement is intended to conform in all respects with, and is subject to
all applicable provisions of, the Plan, which is incorporated herein by
reference. Unless stated otherwise herein, capitalized terms in this Agreement
shall have the same meaning as defined in the Plan. Inconsistencies between
this Agreement and the Plan shall be resolved in accordance with the terms of
the Plan. In the event of any ambiguity in the Agreement or any matters as to
which the Agreement is silent, the Plan shall govern including, without
limitation, the provisions thereof pursuant to which the Committee has the
power, among others, to (i) interpret the Plan and Grant Agreements
related thereto, (ii) prescribe, amend and rescind rules and
regulations relating to the Plan, and (iii) make all other determinations
deemed necessary or advisable for the administration of the Plan. The Grantee
acknowledges by signing this Agreement that he or she has received and reviewed
a copy of the Plan.

 

(j)                                     Cancellation. Notwithstanding
anything herein to the contrary, in the event of a Change in Control of the Corporation,
the Committee in its sole discretion may in connection with the closing of
the respective transaction cancel this Agreement and the Units in exchange for
the payment to Grantee of the Fair Market Value of a number of Shares equal to
the number of Units, subject to any applicable tax withholding. For this
purpose, the Fair Market Value of the Shares shall be calculated on the basis
of the valuation of the Shares for purposes of the respective transaction. Payment
may be made in cash or cash equivalents or in the form of the
consideration paid or exchanged for Shares of the Corporation in the respective
transaction.

 

IN
WITNESS WHEREOF, the Corporation has caused this Agreement to
be executed by its duly authorized officer, and the Grantee has hereunto set
his hand and seal, on this        day of                         ,
200  .

 

 

	
   

  	
  METASTORM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

	
   

  	
  Title: 

  	
   

  

 

	
   

  	
   

  
	
   

  	
   

  	
  (Seal)

  
	
   

  	
  Grantee

  

 

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APPENDIX A — STOCK
RESTRICTIONS

 

1.             Shareholder.  As used in this Appendix, the term
“Shareholder” shall include the Grantee and his or her permitted successors,
assigns, transferees (whether by sale, gift, or other disposition), heirs, and
personal representatives.

 

2.             Shares Covered.  Except as otherwise provided herein, all of
the provisions of this Appendix shall apply to, and the term “Shares” shall
include, any and all Shares of the Corporation that are issued (now or in the
future) pursuant to the rights of the Shareholder under the Grant Agreement and
all other Shares or other equity securities of the Corporation or any successor
entity which may be issued hereafter to the Shareholder in consequence of his
ownership of such Shares of the Corporation as the result of the exchange or
reclassification of shares, corporate reorganization, or any form of
recapitalization, consolidation, merger, share split, share dividend, or
similar event.

 

3.             Transfer Restrictions.  No purchase, sale, gift, endorsement,
assignment, transfer, pledge, encumbrance or other disposition, whether
voluntary, involuntary or by operation of law, including, without limitation,
any transfer pursuant to a divorce decree, of any of the Shares shall be valid
and binding except as provided in, and in accordance with, the terms and
conditions of this Appendix or as otherwise approved by the Committee.  In addition, no such transfer may be made
unless, in the opinion of counsel to the Corporation, such transfer complies
with applicable securities laws.

 

4.             Involuntary Transfer.

 

(a)           If any portion of the Shares are
attached or taken in execution, or if the Shareholder applies for the benefit
of, or files a case under, any provision of the federal bankruptcy law or any
other law relating to insolvency or relief of debtors, or if a case or
proceeding is brought against the Shareholder under any provision of the
federal bankruptcy law or any other law relating to insolvency or relief of
debtors which is not dismissed within sixty (60) days after the commencement
thereof, or if the Shareholder makes an assignment for the benefit of
creditors, or if any portion of the Shares are made subject to charging order,
or if any portion of the Shares are transferred pursuant to a divorce decree
(each such event shall be referred to as an “Involuntary Transfer”), such
Shareholder (the “Insolvent Shareholder”) shall give immediate written notice
of the Involuntary Transfer to the Corporation and the Corporation shall have
the option to purchase any or all of the Shares of the Insolvent Shareholder at
the price and upon the terms provided in Sections 7 and 8 in accordance with
the provisions of this Section 4.

 

(b)           The Corporation shall have the
option, exercisable upon written notice to the Insolvent Shareholder, for a
period of one hundred twenty (120) days following receipt by the Corporation of
the written notice of such Involuntary Transfer, to 

 

 

acquire all or any of the
Shares of the Insolvent Shareholder which are subject to such Involuntary
Transfer.

 

(c)           If the Corporation has actual
knowledge of an Insolvent Shareholder’s Involuntary Transfer, the Corporation
shall give written notice to such effect to the Insolvent Shareholder, and
giving such written notice shall constitute the Insolvent Shareholder’s giving
written notice to the Corporation for purposes of this Section 4.

 

(d)           The Corporation shall settle with an
assignee, trustee in bankruptcy, attaching court or officer or successor in
interest holding Shares received in an Involuntary Transfer by taking any or
all such Shares in execution and paying to them the purchase price for each
share as provided in Section 7, but not exceeding the Insolvent
Shareholder’s indebtedness and proper items of expense.  The balance of the value of such Shares shall
be distributable to the Insolvent Shareholder in accordance with the provisions
of Section 8.

 

5.             Corporation’s Call Right Upon  Termination of Employment.

 

(a)           The Corporation shall have an option
for a period of seven (7) months following both (i) the date of
termination or resignation of the Grantee’s employment with the Corporation, or
any Parent or Subsidiary of the Corporation for any reason and (ii) any
later issuance of any Shares under the Grant Agreement, to purchase all (but
not less than all) of the Shares which are held by the Shareholder at the time
of exercise of the Corporation’s option, at the price and upon the terms
provided in Sections 7 and 8 of this Appendix. 
To exercise such option, the Corporation must send written notice to the
Shareholder for receipt by the Shareholder during such period specifying the
number of such Shares for which the Option is being exercised and the
certificate numbers, if any, for such Shares. 
The Shareholder hereby agrees that in the event the Corporation
exercises its option pursuant to this Section 5(a), he shall be bound to
take any and all commercially reasonable actions necessary to enable the
Corporation to purchase said Shares.

 

(b)           If, for any reason, the Corporation
does not purchase (pursuant to Section 5(a)) said Shares, such Shares
shall continue to be subject to the terms and conditions of this Appendix.

 

6.             Corporation’s Call Right Upon Death of Shareholder.

 

(a)           Upon the death of the Shareholder,
for a period of seven (7) months following the date of the appointment of
such Shareholder’s personal representative, the Corporation shall have an
option to purchase all (but not less than all) of the Shares which are held by
the Shareholder at the time of his or her death, at the price and upon the
terms provided in Sections 7 and 8 of this Appendix.  The Shareholder hereby agrees that in the
event the Corporation exercises its option pursuant to this Section 6(a),
his personal representative shall be bound to take any and all action necessary
to enable the Corporation to purchase said Shares.

 

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(b)           If, for any reason, the Corporation
(pursuant to Section 6(a)) does not purchase all of the Shares, such
Shares not purchased shall continue to be subject to the terms and conditions
of this Appendix, and the heirs and recipients of such Shares shall, as a
condition of receipt of such Shares, execute an instrument acceptable to
counsel for the Corporation pursuant to which they become parties to this
Appendix and agree to be bound by all of the provisions and terms and
conditions hereof.

 

7.             Purchase Price of Shares.

 

(a)           Agreement of Parties.  The purchase price of the Shares payable
under Sections 4, 5 and 6 shall be the “Fair Market Value” of such Shares as of
the “Disposition Date”.  The Disposition
Date is the date on which the Corporation exercises its option to purchase
Shares under Section 4, 5 or 6.

 

(b)           Fair Market Value.  The “Fair Market Value” shall be determined
by mutual agreement of the Committee and the Shareholder.  If the Committee and the Shareholder are
unable to mutually agree upon the Fair Market Value within five (5) days
of the Disposition Date, the Committee and Shareholder shall each promptly
appoint an independent appraiser and such two (2) appraisers shall appoint
a third independent appraiser (the “Appraiser”).  The Appraiser shall determine the Fair Market
Value and shall render a written report of its opinion thereon.  All appraisers appointed hereunder shall be
qualified by experience and ability and the fees and other costs of each
appraiser shall be borne by the Corporation. 
In determining Fair Market Value, the Appraiser (i) shall assume
that any restrictions on transfer of securities or other assets and any
applicable securities law restrictions on transfer are not applicable, and (ii) shall
not take into account any “minority ownership discounts” or “liquidity
discounts.”  All appraisers appointed
shall be provided with the most recent, available annual and year-to-date
financial statements of the Corporation and any other information reasonably
necessary to make such appraisal and shall have reasonable access to all books
and records of the Corporation.

 

(c)           Change in Control.  If a Change in Control of the Corporation
occurs within three (3) months of the Closing Date under Section 8(c),
in which consideration is paid for the shares of the Corporation’s Class AA
Preferred Stock which is one hundred five percent (105%) or more of the Fair
Market Value determined under Section 7(b), the Shareholder shall be paid
any excess of such consideration over such Fair Market Value at the same time
as such portion of the consideration is received by the Corporation’s
shareholders in the Change in Control transaction.

 

8.             Payment of Purchase Price.  The payment of the
purchase price for the Shares as determined pursuant to Section 7 or 9(b),
as applicable, shall be made as follows:

 

(a)           Payment.  In the event of any transfer pursuant to Section 4,
5 or 6 hereof, the total purchase price of the Shares shall be paid by check by
the Corporation at the Closing Date, as defined in Section 8(c) hereof.
In the event of any purchase by the 

 

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Corporation pursuant to Section 9(b) hereof,
the purchase price shall be paid on the terms set forth in the Shareholder’s
Offer.

 

(b)           Debt Due From Shareholder.  Any debt due by the Shareholder to the
Corporation shall be payable according to its terms, as shall any debt due by
the Corporation to the Shareholder; except, however, that, regardless of the
terms of any such debt due by the Shareholder to the Corporation, any cash
payment due under Section 8(a) with respect to the purchase of the
Shares shall, instead of being paid to the Shareholder, be first applied to the
discharge of any such indebtedness, until all such indebtedness is fully
discharged.  Any debt due the Shareholder
from the Corporation as of the date of any payment by the Corporation to the
Shareholder under Section 8(a) shall be payable in full by the
Corporation as of such date.

 

(c)           Closing.  Closing on the purchase or sale of any Shares
sold pursuant to this Agreement shall, unless otherwise agreed to in writing by
the parties, be held at the principal place of business of the Corporation
thirty (30) days from the date of notice by the Corporation with respect to the
exercise of an option hereunder regarding the purchase by the Corporation of
the Shares (the “Closing Date”).  At such
closing, upon payment of the purchase price, the certificates representing the
Shares to be purchased and sold hereunder shall be delivered by the Shareholder
to the Corporation, accompanied by appropriately endorsed share transfer forms
in blank.  If the certificates
representing any Shares to be so transferred have not been surrendered by the
Shareholder, all rights of the holder thereof with respect to said Shares
(including voting rights) nonetheless shall cease and terminate.

 

9.             Voluntary Transfers of Shares.

 

(a)           The Shareholder agrees that, during
his lifetime, he will not sell any of his Shares, except (i) upon the
conditions set forth in this Section 9; or (ii) with the prior
written consent of the Corporation.

 

(b)           Offer From Third Party.  In the event that the Shareholder receives a
bona fide offer from an independent third party capable of consummating such a
sale to purchase all or any of the authorized, issued and outstanding Shares
then registered in such Shareholder’s name, such Shareholder shall first offer
in writing (the “Shareholder’s Offer”) to sell such Shares (the “Offered
Shares”) to the Corporation at the price and on the terms of which such selling
Shareholder proposes to transfer the Offered Shares to the proposed third party
transferee.  The Shareholder’s Offer
shall set forth (i) the number of shares of the Offered Shares, (ii) the
name and address of the proposed transferee, (iii) the amount of
consideration to be received by the selling Shareholder, and (iv) the
method of proposed payment.  The
Corporation shall have the option to acquire all or any of the shares of
Offered Shares at the price and upon the terms provided in the Shareholder’s
Offer.  The Corporation shall have the
right to exercise its option for a period of fifteen (15) days following its
receipt of the Shareholder’s Offer by notifying the selling Shareholder in
writing of its intention to purchase at Closing (as defined in Section 8(d) 

 

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hereof) all or any shares
of the Offered Shares on the same terms and conditions set forth in the
Shareholder’s Offer.

 

(c)           Transfers to Third Parties.  In the event that (i) a Shareholder
elects to transfer all or a portion of his Shares; (ii) said Shareholder
strictly complies with the provisions of Section 9(b); (iii) the
Corporation fails to purchase all of such shares of Offered Shares; and (iv) the
Shareholder who desires to transfer such Shares complies with the terms of this
Section 9(c), then any such Shares which are not so purchased by the
Corporation may be sold by the selling Shareholder to the third party named in
the Shareholder’s Offer within a period of fifteen (15) days after the
expiration of the fifteen (15) day period provided in Section 9(b).  Such shares of Offered Shares may be
transferred to the third party named in the Shareholder’s Offer provided that
such shares are sold at the price and on the terms set forth in the
Shareholder’s Offer.  Any shares of
Offered Shares not actually sold or transferred to such third party by the
selling Shareholder within such fifteen (15) day period at the price and on the
terms set forth in the Shareholder’s Offer shall remain subject to all of the
provisions of this Agreement.  Any shares
of Offered Shares which are sold or transferred to such third party by the
selling Shareholder within such fifteen (15) day period shall also remain
subject to all of the provisions of this Appendix.  Completion of such sale and transfer of the
shares on the books and records of the Corporation will be subject to the purchaser
of Offered Shares executing, with the Corporation, a shareholder agreement
containing the aforementioned provisions and such other documentation
customarily required by the Corporation including without limitation legal
opinions as to compliance with all securities laws, certificates of incumbency,
and lock-up agreement.

 

(d)           Sale of Corporation.  Notwithstanding the provisions of this Section 9
to the contrary, the restrictions set forth in this Section 9 shall not
apply to Shares sold or otherwise transferred in connection with (i) a
sale of the Corporation as a result of which more than fifty percent (50%) of
the total number of outstanding voting stock of the Corporation is sold,
exchanged, conveyed, or otherwise transferred to a third party in one or a
series of related transactions, or (ii) a merger or consolidation of the
Corporation as a result of which the holders of its voting stock (immediately
prior to such merger or consolidation) hold less than fifty percent (50%) of
the voting stock of the surviving or new entity, as the case may be.

 

10.                               Drag
Along Rights

 

(a)                                  Generally.  If at any time the holder(s) of a
majority of the shares of voting stock of the Corporation desire to sell,
exchange, convey, or otherwise transfer, in one or a series of related
transactions to an independent third party, all of the outstanding shares of
stock of the Corporation (“Selling Holder(s)”), then the Selling Holder(s) may
require the Shareholder to sell, exchange, convey, or otherwise transfer, and
the Shareholder agrees to sell, exchange, convey, or otherwise transfer all of
the Shares at the same price per share (as set forth below) and on the same
terms and conditions, as received by the Selling Holder(s) from the
independent third party for the same class of shares.

 

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(b)           Conditions
to Obligation.  The Shareholder’s
obligation to sell, exchange, convey or otherwise transfer the Shares under the
provisions of this Section 10 is subject to the requirements that (i) the
Selling Holder(s) shall give notice to the Shareholder of such sale,
exchange, conveyance, or transfer at least 15 days prior to the proposed date
of such event, specifying the price and terms upon which the Shares are to be
sold, exchanged, conveyed, or transferred, and the proposed date of such event,
and (ii) upon the consummation of said sale, exchange, conveyance, or
transfer, the Shareholder will receive the same form and amount of
consideration per share as received by the Selling Holder(s) for the same
class of shares, or, if the Selling Holder(s) are given an option as to
the form and amount of consideration to be received, the Shareholder will be
given the same option.

 

11.           Market Stand-Off Agreement.  If requested by the underwriter(s) (the
“Underwriter”) for the Corporation’s first firm commitment underwritten public
offering (pursuant to an effective registration statement under the Securities
Act of 1933, as then in effect, or any comparable statement under any similar
Federal statute then in force) of stock of the Corporation, the Shareholder
will execute and deliver to the Underwriter a written agreement (a “Lock-up
Agreement”) in such form as may be satisfactory to the Underwriter that
restricts the transfer of any of the Shares, without the prior written consent
of the Underwriter, for a period following the effective date of the
registration statement relating to such offering, as agreed upon by the Board
of Directors.  In the event that the Underwriter
requests the Shareholder to execute and deliver a Lock-up Agreement, whether or
not the Shareholder actually executes such Lock-up Agreement, (i) any
purported transfer of Shares other than in accordance with the terms of such
Lock-up Agreement shall be null and void, (ii) the Corporation shall
refuse to recognize any such transfer and shall not reflect on its records any
change in record ownership of the Shares pursuant to any such transfer, and (iii) the
Corporation may note upon its Shares transfer records a “stop transfer order”
with respect to the Shares in order to enforce the restrictions on transfer set
forth in such Lock-up Agreement.  The
Corporation or its agent shall not be liable for any refusal to transfer the
Shares upon the books of the Corporation, except in compliance with the terms
and conditions of such Lock-up Agreement.

 

12.           Severability.  It is the express intention of the parties
that the agreements contained in this Appendix shall have the widest
application possible.  If any provision
contained herein is found by a court having jurisdiction to be unreasonable in
scope or character, the Appendix and Grant Agreement shall not be rendered
unenforceable thereby, but rather the scope or character of such provision
shall be deemed reduced or modified with retroactive effect to render such
provision reasonable and such provision shall be enforced as thus
modified.  If the court having
jurisdiction will not review the provision, then the parties shall mutually
agree to a revision having an effect as close as permitted by law to the
provision declared unenforceable.  The
parties further agree that in the event a court having jurisdiction determines,
despite the express intent of the parties, that any portion of any provision
contained herein is not enforceable, the remaining provisions of this Appendix
and the Grant Agreement shall nonetheless remain valid and enforceable.

 

6

 

13.           Endorsement Of Certificate.  Each certificate of
Shares of the Corporation registered in the name of the Shareholder and subject
hereto shall be endorsed by the Secretary of the Corporation as follows:

 

“This certificate
is transferable only upon compliance with the provisions of a Grant Agreement,
by and among Metastorm, Inc. and the Shareholder, a copy of which is on
file in the office of the Secretary of the Corporation and is available upon
request of the Shareholder without charge.”

 

14.           Term.  Anything contained herein to the contrary
notwithstanding, this Appendix shall terminate, and all rights and obligations
hereunder shall cease upon the occurrence of any of the following events:

 

(a)           The written agreement of the Grantee
and the Corporation;

 

(b)           The cessation of the Corporation’s
business;

 

(c)           The bankruptcy, liquidation,
receivership, or dissolution of, or assignment for the benefit of creditors by,
the Corporation; or

 

(d)           Except as to Section 11 hereof,
the consummation of an initial public offering of stock of the Corporation’s
that meets the requirements of Section 11 or an exchange of the Shares in
a Change in Control of the Corporation for shares of an acquiring entity that
are registered under Sections 12(b) or (g) of the Exchange Act and
listed on any exchange or the Nasdaq national market.

 

15.           Specific Performance.  Because the Shares
cannot be readily purchased or sold in the open market, irreparable damage
would result in the event this Appendix is not specifically enforced.  Therefore, the rights to, or obligations of,
the Corporation and the Shareholder shall be enforceable in a court by a decree
of specific performance, and appropriate injunctive relief may be applied for
and granted in connection therewith. 
Such remedies, and all other remedies provided for in this Appendix,
shall, however, be cumulative and not exclusive and shall be in addition to any
other remedies which any party may have under this Appendix or otherwise.

 

7Exhibit
10.11

 

METASTORM

 

2007
OPERATING COMMITTEE COMPENSATION PLAN (OCCP)

 

The
2007 Metastorm OCCP (“Plan”) is designed to reward selected members of the
Company’s management team for efforts that increase shareholder value.

 

PLAN YEAR AND CONDITIONS

 

The
term of the Plan will be effective through December 31, 2007 or until all
payments contemplated herein have been made, upon which the Plan will
automatically expire unless such term is extended by the Plan
Administrators.  This Plan is not
intended to be and does not constitute an agreement of continued employment of
the participant by the Company.

 

Each
participant will be eligible to receive cash compensation, the amount of which
will be determined using the criteria outlined in Exhibit A.  If such criteria include financial metrics,
such financial metrics must adhere to Generally Accepted Accounting Principals
(“GAAP”), as determined by the Chief Financial Officer of the Company.

 

ADMINISTRATION

 

The
Plan will be administered by the Chief Executive Officer and the Chief
Financial Officer, with oversight by the Compensation Committee of the Board of
Directors.  These individuals will have
the power to interpret, change, terminate or amend the Plan, as well as to determine
which persons are eligible under the Plan.

 

PLAN DETAILS

 

Target
Payout:  Payouts under
the Plan will be based upon achievement of the corporate objectives outlined in
Exhibit A.  The benefit paid under the Plan is based upon
a pre-determined bonus target (the “Target Amount” or “Target Payout”) for each
participant, details of which are included in Exhibit A.

 

Payout
Date:  50% of any
amount(s) due under this OCCP will be paid on January 31, 2008
(utilizing un-audited management financial statements), with the remaining 50%
to be paid upon completion and publication of the CY2007 audit.  If Metastorm has not completed its CY2007
audit by May 31, 2008, payout will occur on May 31st 2008
utilizing management un-audited financials, which must be signed-off and
attested to by the Chief Executive Officer and Chief Financial Officer of
Metastorm, Inc.

 

BENEFITS AFTER TERMINATION

 

Participant
will be eligible for pay-out under this OCCP if participant was employed on December 31,
2007 but subsequently terminates employment after December 31, 2007 (for
any reason).

 

Upon
termination of employment prior to December 31, 2007, the following
conditions apply:

 

i.              Resignation of Participant.  Resignation of the Participant from the
employ of the company prior to December 31, 2007, for any reason whatsoever,
will result in forfeiture of all benefits due under the Plan.  Upon such notice of resignation the
Participant’s participation in the Plan will have deemed to expire midnight on
the day preceding the resignation.

 

ii.             Termination Upon Mutual
Agreement.  The Company and the Participant may, by
mutual written agreement, terminate the employment of the Participant at any
time.  Participant and the Plan

 

1

 

Administrators
will jointly determine payouts, if any, upon termination by mutual agreement,
as part; of the Participants overall termination package.

 

iii.            Termination upon Death or
Disability.  In the event (i) the Participant is
Disabled (as defined below), or (ii) the Participant’s employment is
terminated due to death of the Participant, the Company shall pay the
Participant (or, in the event of the Participant’s death or disability, his
heirs, legatees and/or legal representatives) any bonus which the Participant
would have otherwise been entitled to receive under the Plan (but the
Participant shall not be entitled to any bonuses with respect to any subsequent
fiscal year).  Such bonuses shall be
prorated based on the number of days during the fiscal year that the Participant
was employed by the Company and shall be paid to the Participant at the same
time such bonuses are payable to other Participants.  For this purpose, the Participant shall be “Disabled”
if he is unable to engage in any substantial gainful activity by reason of any
medically determinate physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.

 

iv.            Termination by the Company for
Cause.  Upon any termination of the Participant’s
employment for Cause prior to December 31, 2007, participation in the Plan
by the Participant will terminate effective upon the termination of
employment.  Upon termination for Cause,
the Participant will forfeit all benefits under this Plan.

 

“Cause”
shall mean (i) the termination of the Participant under (and in accordance
with) the Company’s policy of progressive documented discipline relating to the
performance of the Participant’s duties or compliance with Company policies,
practices and procedures; (ii) dishonesty, theft, embezzlement, fraud, or
any similar misconduct by the Participant; (iii) the Participant’s
indictment or arrest for a felony; (iv) conduct which, in the reasonable
judgment of the Company could have an adverse impact on the reputation,
business or affairs of the Company or an Affiliate; (v) any violation by
the Participant of the non-competition, non-interference and confidentiality
provisions contained in this Plan; (vi) any misrepresentation made by the
Participant to the Company or an Affiliate in connection with his employment.

 

2

 

METASTORM

 

2007
OPERATING COMMITTEE COMPENSATION PLAN (OCCP)

 

Exhibit A

Individual Plan and Acceptance

 

Plan
Overview:

 

·              Target Compensation is
                .

 

·                    % of Target Compensation based
upon achievement of consolidated revenue of
$           for CY2007
(Target Revenue).

 

·                    % of Target Compensation based
upon achievement of consolidated EBITDA of $            
for CY2007 (Target EBITDA).

 

Plan
Details:

 

·       Revenue Component of Target Compensation:

 

·      No payout on achievement less
than 90% of Target Revenue.

 

·      Payout of 50% of Target Revenue
Compensation upon achievement of 90% (or
$                    )
of Target Revenue.

 

·      Payout percentage of Target
Compensation (revenue component)increases 5% points for each 1% increase above
90% of Target Revenue up to 100% achievement. 
To illustrate, a 95% achievement of Target Revenue will result in a 75%
payout of Target Revenue Compensation.

 

·      Payout of 100% of Target Revenue
Compensation at 100% achievement.

 

·      REVENUE ACCELERATOR:  Payout increases by 5% points for each 1%
over 100% of Target Revenue (a 101% achievement on the Revenue Plan would
result in a 105% payout of Target Revenue Compensation).

 

·              EBITDA Component of Target
Compensation:

 

·      No payout on achievement less
than 90% of Target EBITDA.

 

·      Payout of 50% of Target
Compensation amount upon achievement of 90% (or
$                    )
of the Target EBITDA.

 

·      Payout percentage increases 5%
points for each 1% increase in EBITDA target above 90% achievement.  For illustrate, a 95% achievement of Target
EBITDA will result in a payout of 75% of Target EBITDA Compensation.

 

·      Payout of 100% of Target EBITDA
Comp. upon 100% achievement.

 

·      EBITDA ACCELERATOR:  Payout on EBITDA component increases 1% for
each 1% achievement over 100% of Target (payout accelerator in linear).  EBITDA Payout capped at 150% of Target Compensation
(EBITDA component).

 

3

 

·              All payouts capped at 200% of
Target Compensation.

 

By my
signature below, I accept the terms and conditions of the 2007 OCCP as detailed
in the Plan Document and this Exhibit A.

 

 

	
   

  	
   

  	
   

  
	
  Participant:

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  Approved: 

  	
   

  	
   

  
	
  

  	
   

  	
   

  
	
  Robert J. Farrell -
  Chief Executive Officer

  	
   

  	
   

  

 

4

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