-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HYh764yXRaM7qXvqOngcImYfObzcMORaU0fAD5XsGDhW64n+k2DoES1YhA2fJtVn EUxCI5XxTEUHtGldXLyzeA== 0001206774-04-001519.txt : 20041026 0001206774-04-001519.hdr.sgml : 20041026 20041026160553 ACCESSION NUMBER: 0001206774-04-001519 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20041020 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041026 DATE AS OF CHANGE: 20041026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: E PIPHANY INC CENTRAL INDEX KEY: 0001089613 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 770443392 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27183 FILM NUMBER: 041096794 BUSINESS ADDRESS: STREET 1: 475 CONCAR DRIVE STREET 2: 475 CONCAR DRIVE CITY: SAN MATEO STATE: CA ZIP: 94402 BUSINESS PHONE: 6504962430 8-K 1 ep908917.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 October 20, 2004 Date of Report (Date of earliest event reported) E.PIPHANY, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 000-27183 77-0443392 ---------------------------- ----------- ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 475 Concar Drive, San Mateo, California 94402 ------------------------------------------------------------ (Address of principal executive offices, including zip code) (650) 356-3800 ---------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable ------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT On October 20, 2004, the Board of Directors of E.piphany, Inc. approved a written Executive Bonus Plan (the "Plan"). The Plan reflects the Company's existing executive bonus program and includes no substantive change to the current program. A copy of the Plan is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein. The Plan is intended to increase shareholder value by motivating executive officers and key employees. A committee appointed by our board of directors (the "Committee") shall administer the Plan, shall determine which employees participate in the Plan during any given performance period and shall determine the target awards for each participant under the Plan. For each performance period, which shall generally be periods of either three months or twelve months, the Committee shall establish a bonus pool available for distribution to the participants. The Committee shall, in its sole discretion, determine the performance requirements applicable to any target award and the Committee may, in its sole discretion, increase, reduce or eliminate the amount allocated to the bonus pool or any participant's actual award. The Company has not paid bonuses to any of our executive officers for services rendered during the first and second quarters of this year and does not intend to pay bonuses for services rendered during the third quarter. On October 20, 2004, the Company's Board of Directors also approved a form of Restricted Stock Purchase Agreement for grants to our executive officers (the "Agreement"). Our board of directors approved restricted stock awards consisting of an aggregate of 285,000 shares of restricted common stock to four of our executive officers. Under the Agreement, our repurchase right on the restricted stock shall lapse fifty percent on October 1, 2006 and fifty percent on October 1, 2008. Our repurchase right, however, shall lapse 100% upon a change of control of the company. These shares of restricted stock were granted pursuant to our 1999 Stock Plan. A copy of the form of Agreement used to make these grants is attached as Exhibit 99.2 to this current report on Form 8-K and is incorporated by reference herein. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (c) (1) Executive Bonus Plan, adopted by the board of directors on October 20, 2004. (2) Form of Restricted Stock Purchase Agreement, adopted by the board of directors on October 20, 2004. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. E.PIPHANY, INC. /s/ Kevin J. Yeaman ---------------------------- Kevin J. Yeaman Chief Financial Officer Date: October ___, 2004 EXHIBIT INDEX Exhibit No. Description - ----------- ----------------------------------------------------------------- 99.1 Executive Bonus Plan, adopted by the board of directors on October 20, 2004. 99.2 Form of Restricted Stock Purchase Agreement, adopted by the board of directors on October 20, 2004. EX-99.1 2 ep908917ex991.txt EXHIBIT 99.1 E.PIPHANY, INC. EXECUTIVE BONUS PLAN TABLE OF CONTENTS
Page ---- SECTION 1 BACKGROUND, PURPOSE AND DURATION....................................................................1 1.1 Effective Date......................................................................................1 1.2 Purpose of the Plan.................................................................................1 SECTION 2 DEFINITIONS.........................................................................................1 2.1 "Actual Award"......................................................................................1 2.2 "Affiliate".........................................................................................1 2.3 "Board".............................................................................................1 2.4 "Bonus Pool"........................................................................................1 2.5 "Code"..............................................................................................1 2.6 "Committee".........................................................................................1 2.7 "Company"...........................................................................................1 2.8 "Disability"........................................................................................2 2.9 "Employee"..........................................................................................2 2.10 "Participant".......................................................................................2 2.11 "Performance Period"................................................................................2 2.12 "Plan"..............................................................................................2 2.13 "Shares"............................................................................................2 2.14 "Target Award"......................................................................................2 2.15 "Termination of Service"............................................................................2 SECTION 3 SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS...............................................2 3.1 Selection of Participants...........................................................................2 3.2 Determination of Target Awards......................................................................2 3.3 Bonus Pool..........................................................................................3 3.4 Discretion to Modify Awards.........................................................................3 3.5 Discretion to Determine Criteria....................................................................3 SECTION 4 PAYMENT OF AWARDS...................................................................................3 4.1 Right to Receive Payment............................................................................3 4.2 Timing of Payment...................................................................................3 4.3 Form of Payment.....................................................................................3 4.4 Payment in the Event of Death or Disability.........................................................3 SECTION 5 ADMINISTRATION......................................................................................4 5.1 Committee is the Administrator......................................................................4 5.2 Committee Authority.................................................................................4 5.3 Decisions Binding...................................................................................4 5.4 Delegation by the Committee.........................................................................4
-i- TABLE OF CONTENTS (Continued)
Page ---- SECTION 6 GENERAL PROVISIONS..................................................................................4 6.1 Tax Withholding.....................................................................................4 6.2 No Effect on Employment or Service..................................................................4 6.3 Participation.......................................................................................4 6.4 Successors..........................................................................................5 6.5 Beneficiary Designations............................................................................5 6.6 Nontransferability of Awards........................................................................5 SECTION 7 AMENDMENT, TERMINATION AND DURATION.................................................................5 7.1 Amendment, Suspension or Termination................................................................5 7.2 Duration of the Plan................................................................................5 SECTION 8 LEGAL CONSTRUCTION..................................................................................5 8.1 Gender and Number...................................................................................5 8.2 Severability........................................................................................5 8.3 Requirements of Law.................................................................................6 8.4 Governing Law.......................................................................................6 8.5 Captions............................................................................................6
-ii- E.PIPHANY, INC. EXECUTIVE BONUS PLAN SECTION 1 BACKGROUND, PURPOSE AND DURATION 1.1 Effective Date. The Compensation Committee of the Board adopted the Plan effective as of [DATE]. 1.2 Purpose of the Plan. The Plan is intended to increase shareholder value and the success of the Company by motivating selected employees (a) to perform to the best of their abilities, and (b) to achieve the Company's objectives. SECTION 2 DEFINITIONS The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context: 2.1 "Actual Award" means as to any Performance Period, the actual award (if any) payable to a Participant for the Performance Period, subject to the Committee's authority under Section 3.4 to modify the award. 2.2 "Affiliate" means any corporation or other entity (including, but not limited to, partnerships and joint ventures) controlled by the Company. 2.3 "Board" means the Board of Directors of the Company. 2.4 "Bonus Pool" means the pool of funds available for distribution to Participants. Subject to the terms of the Plan, the Committee establishes the Bonus Pool for each Performance Period. 2.5 "Code" means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation. 2.6 "Committee" means the committee appointed by the Board (pursuant to Section 5.1) to administer the Plan. Until otherwise determined by the Board, (a) the Company's Compensation Committee shall constitute the Committee, and (b) for administrative convenience, the independent, non-employee members of the Board also may act as the Committee from time to time. 2.7 "Company" means E.piphany, Inc., a Delaware corporation, or any successor thereto. 2.8 "Disability" means a permanent and total disability determined in accordance with uniform and nondiscriminatory standards adopted by the Committee from time to time. 2.9 "Employee" means any executive or key employee of the Company or of an Affiliate, whether such individual is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan. 2.10 "Participant" means as to any Performance Period, an Employee who has been selected by the Committee for participation in the Plan for that Performance Period. 2.11 "Performance Period" means the period of time for the measurement of the performance criteria that must be met to receive an Actual Award, as determined by the Committee in its sole discretion. A Performance Period may be divided into one or more shorter periods if, for example, but not by way of limitation, the Committee desires to measure some performance criteria over 12 months and other criteria over 3 months. 2.12 "Plan" means the E.piphany, Inc. Executive Bonus Plan, as set forth in this instrument and as hereafter amended from time to time. 2.13 "Shares" means shares of the Company's common stock. 2.14 "Target Award" means the target award, at 100% performance achievement, payable under the Plan to a Participant for the Performance Period, as determined by the Committee in accordance with Section 3.2. 2.15 "Termination of Service" means a cessation of the employee-employer relationship between an Employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability, retirement, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or an Affiliate. SECTION 3 SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS 3.1 Selection of Participants. The Committee, in its sole discretion, shall select the Employees who shall be Participants for any Performance Period. Participation in the Plan is in the sole discretion of the Committee, on a Performance Period by Performance Period basis. Accordingly, an Employee who is a Participant for a given Performance Period in no way is guaranteed or assured of being selected for participation in any subsequent Performance Period or Periods. 3.2 Determination of Target Awards. The Committee, in its sole discretion, shall establish a Target Award for each Participant. -2- 3.3 Bonus Pool. Each Performance Period, the Committee, in its sole discretion, shall establish a Bonus Pool. Actual Awards shall be paid from the Bonus Pool. 3.4 Discretion to Modify Awards. Notwithstanding any contrary provision of the Plan, the Committee may, in its sole discretion and at any time, (a) increase, reduce or eliminate a Participant's Actual Award, and/or (b) increase, reduce or eliminate the amount allocated to the Bonus Pool. The Committee may determine the amount of any reduction on the basis of such factors as it deems relevant, and shall not be required to establish any allocation or weighting with respect to the factors it considers. 3.5 Discretion to Determine Criteria. Notwithstanding any contrary provision of the Plan, the Committee shall, in its sole discretion, determine the performance requirements applicable to any Target Award. The requirements may be on the basis of any factors the Committee determines relevant, and may be on an individual, divisional, business unit or Company-wide basis. Failure to meet the requirements will result in a failure to earn the Target Award, except as provided in Section 3.4. SECTION 4 PAYMENT OF AWARDS 4.1 Right to Receive Payment. Each Actual Award shall be paid solely from the general assets of the Company. Nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant's claim of any right other than as an unsecured general creditor with respect to any payment to which he or she may be entitled. 4.2 Timing of Payment. Payment of each Actual Award shall be made as soon as practicable as determined by the Committee after the end of the Performance Period during which the Actual Award was earned. Unless otherwise determined by the Committee, a Participant must be employed by the Company or any Affiliate on the last day of the Performance Period to receive a payment under the Plan. 4.3 Form of Payment. Each Actual Award shall be paid in cash (or its equivalent) in a single lump sum. 4.4 Payment in the Event of Death or Disability. If a Participant dies or becomes Disabled prior to the payment of an Actual Award earned by him or her prior to death or Disability for a prior Performance Period, the Actual Award shall be paid to his or her estate or to the Participant, as the case may be, subject to the Committee's discretion to reduce or eliminate any Actual Award otherwise payable. -3- SECTION 5 ADMINISTRATION 5.1 Committee is the Administrator. The Plan shall be administered by the Committee. The Committee shall consist of not less than two (2) members of the Board. The members of the Committee shall be appointed from time to time by, and serve at the pleasure of, the Board. 5.2 Committee Authority. It shall be the duty of the Committee to administer the Plan in accordance with the Plan's provisions. The Committee shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) determine which Employees shall be granted awards, (b) prescribe the terms and conditions of awards, (c) interpret the Plan and the awards, (d) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Employees who are foreign nationals or employed outside of the United States, (e) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and (f) interpret, amend or revoke any such rules. 5.3 Decisions Binding. All determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law. 5.4 Delegation by the Committee. The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Company. SECTION 6 GENERAL PROVISIONS 6.1 Tax Withholding. The Company shall withhold all applicable taxes from any Actual Award, including any federal, state and local taxes (including, but not limited to, the Participant's FICA and SDI obligations). 6.2 No Effect on Employment or Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant's employment or service at any time, with or without cause. For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Affiliates (or between Affiliates) shall not be deemed a Termination of Service. Employment with the Company and its Affiliates is on an at-will basis only. The Company expressly reserves the right, which may be exercised at any time and without regard to when during a Performance Period such exercise occurs, to terminate any individual's employment with or without cause, and to treat him or her without regard to the effect that such treatment might have upon him or her as a Participant. 6.3 Participation. No Employee shall have the right to be selected to receive an award under this Plan, or, having been so selected, to be selected to receive a future award. -4- 6.4 Successors. All obligations of the Company under the Plan, with respect to awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company. 6.5 Beneficiary Designations. If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid award shall be paid in the event of the Participant's death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Committee. In the absence of any such designation, any vested benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate. 6.6 Nontransferability of Awards. No award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 6.5. All rights with respect to an award granted to a Participant shall be available during his or her lifetime only to the Participant. SECTION 7 AMENDMENT, TERMINATION AND DURATION 7.1 Amendment, Suspension or Termination. The Board, in its sole discretion, may amend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Actual Award theretofore earned by such Participant. No award may be granted during any period of suspension or after termination of the Plan. 7.2 Duration of the Plan. The Plan shall commence on the date specified herein, and subject to Section 7.1 (regarding the Board's right to amend or terminate the Plan), shall remain in effect thereafter. SECTION 8 LEGAL CONSTRUCTION 8.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. 8.2 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. -5- 8.3 Requirements of Law. The granting of awards under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 8.4 Governing Law. The Plan and all awards shall be construed in accordance with and governed by the laws of the State of California, but without regard to its conflict of law provisions. 8.5 Captions. Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan. -6- EX-99.2 3 ep908917ex992.txt EXHIBIT 99.2 E.PIPHANY, INC. 1999 STOCK PLAN RESTRICTED STOCK AGREEMENT E.piphany, Inc. (the "Company") hereby grants you, [NAME OF EMPLOYEE] (the "Employee"), a Stock Purchase Right to purchase restricted Common Stock of the Company (the "Restricted Stock") under the Company's 1999 Stock Plan. The date of this Restricted Stock Agreement (the "Agreement") is October 20, 2004 (the "Grant Date"). Subject to the provisions of Appendix A (attached hereto), the principal features of this grant are as follows: Total Number of Shares of Restricted Stock: [NUMBER] Purchase Price per Share: $0.0001, par value SCHEDULED VESTING DATES: NUMBER OF SHARES: - --------------------------------------------------- ----------------- Grant Date 0 October 1, 2006 (the "Two-year Anniversary Date")* [1/2 OF SHARES] October 1, 2008 (the "Four-year Anniversary Date")* [1/2 OF SHARES] *Except as otherwise provided in Appendix A, Employee will not vest in the Restricted Stock unless he or she is employed by the Company or one of its Affiliates through the applicable vesting date. Your signature below indicates your agreement to purchase the Shares subject to this grant and your agreement and understanding that this grant is subject to all of the terms and conditions contained in Appendix A and the Plan. For example, important additional information on vesting and forfeiture of the Shares covered by this grant is contained in Paragraphs 3 through 6 of Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS AGREEMENT. E.PIPHANY, INC. EMPLOYEE By:_______________________ ----------------------------- [NAME] Title:____________________ Date:_____________________ Date: ______________, 2004 APPENDIX A TERMS AND CONDITIONS OF RESTRICTED STOCK AGREEMENT 1. Grant. The Company hereby grants to the Employee an award of [NUMBER] Shares of Restricted Stock at a purchase price $0.0001 (par value) per share, commencing on the Grant Date, subject to all of the terms and conditions in this Agreement and the Plan. By accepting this grant of Restricted Stock, the par value purchase price for each Share of Restricted Stock will be deemed paid by the Employee by past services rendered by the Employee. 2. Shares Held in Escrow. Unless and until the Shares of Restricted Stock shall have vested in the manner set forth in Paragraph 3, such Shares shall be issued in the name of the Employee and held by the Secretary of the Company (or its designee) as escrow agent (the "Escrow Agent"), and shall not be sold, transferred or otherwise disposed of, and shall not be pledged or otherwise hypothecated. The Company may determine to issue the Shares in book entry form and/or may instruct the transfer agent for its Common Stock to place a legend on the certificates representing the Restricted Stock or otherwise note its records as to the restrictions on transfer set forth in this Agreement and the Plan. The certificate or certificates representing such Shares shall not be delivered by the Escrow Agent to the Employee unless and until the Shares have vested and all other terms and conditions in this Agreement have been satisfied. 3. Vesting Schedule/Period of Restriction. Subject to Paragraphs 4 and 5 of this Agreement and Section 14 of the Plan, the Shares of Restricted Stock awarded by this Agreement shall vest in accordance with the vesting provisions set forth on the first page of this Agreement. Shares of Restricted Stock shall not vest in the Employee in accordance with any of the provisions of this Agreement unless the Employee shall have been continuously employed by the Company or by one of its Affiliates from the Grant Date until the date otherwise is scheduled to occur. For purposes of this Agreement, "Affiliate" means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company. 4. Administrator Discretion and Acceleration. The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the unvested Shares of Restricted Stock at any time, subject to the terms of the Plan. If so accelerated, such Shares will be considered as having vested as of the date specified by the Administrator. 5. Change of Control. In the event of a Change of Control, as defined in the Change of Control Severance Agreement between the Employee and the Company, the Employee shall immediately be vested in 100% of the Shares of Restricted Stock. 6. Forfeiture. Notwithstanding any contrary provision of this Agreement, the balance of the Shares of Restricted Stock that have not vested at the time of the Employee's Termination of Service will be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company. The Employee shall not be entitled to a refund of the price paid for the Shares returned to the Company pursuant to this paragraph 5. The Employee hereby appoints the Escrow Agent with full power of substitution, as the Employee's true and lawful attorney-in-fact with irrevocable power and authority in the name and on behalf of the Employee to take any action and execute all documents and instruments, including, without limitation, stock powers which may be necessary to transfer the certificate or certificates evidencing such unvested Shares to the Company upon such Termination of Service. For purposes of this Agreement, "Termination of Service" means a cessation of the employee-employer relationship between the Employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, disability, retirement, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or an Affiliate. 7. Death of Employee. Any distribution or delivery to be made to the Employee under this Agreement will, if the Employee is then deceased, be made to the administrator or executor of the Employee's estate. Any such administrator or executor must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer. -2- 8. Withholding of Taxes. The Company (or the employing Affiliate) will withhold a portion of the Shares of Restricted Stock that have an aggregate market value sufficient to pay the minimum federal, state and local income, employment and any other applicable taxes required to withheld by the Company or the employing Affiliate with respect to the Shares, unless the Employee makes alternate arrangements satisfactory to the Administrator for such withholdings in advance of the arising of any withholding obligations. Notwithstanding any contrary provision of this Agreement, no Restricted Stock will be granted unless and until satisfactory arrangements (as determined by the Administrator) will have been made by the Employee with respect to the payment of any income and other taxes which the Company determines must be withheld or collected with respect to such Shares. 9. Rights as Stockholder. Neither the Employee nor any person claiming under or through the Employee will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Employee or the Escrow Agent. After such issuance, recordation and delivery, the Employee will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares. 10. No Effect on Employment. Subject to any employment contract with the Employee, the terms of such employment will be determined from time to time by the Company, or the Affiliate employing the Employee, as the case may be, and the Company, or the Affiliate employing the Employee, as the case may be, will have the right, which is hereby expressly reserved, to terminate or change the terms of the employment of the Employee at any time for any reason whatsoever, with or without good cause. The transactions contemplated hereunder and the vesting schedule set forth on the first page of this Agreement do not constitute an express or implied promise of continued employment for any period of time. A leave of absence or an interruption in service (including an interruption during military service) authorized or acknowledged by the Company or the Affiliate employing the Employee, as the case may be, shall not be deemed a Termination of Service for the purposes of this Agreement. 11. Address for Notices. Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company, in care of its General Counsel, at E.piphany, Inc., 475 Concar Drive, San Mateo, CA 94402, or at such other address as the Company may hereafter designate in writing. 12. Changes in Shares. In the event that as a result of a stock dividend, stock split, reclassification, recapitalization, combination of Shares or the adjustment in capital stock of the Company or otherwise, or as a result of a merger, consolidation, spin-off or other reorganization, the Shares will be increased, reduced or otherwise changed, and by virtue of any such change the Employee will in his or her capacity as owner of unvested Shares of Restricted Stock which have been awarded to him or her (the "Prior Shares") be entitled to new or additional or different shares of stock, cash or securities (other than rights or warrants to purchase securities); such new or additional or different shares, cash or securities will thereupon be considered to be unvested Restricted Stock and will be subject to all of the conditions and restrictions which were applicable to the Prior Shares pursuant to this Agreement and the Plan. If the Employee receives rights or warrants with respect to any Prior Shares, such rights or warrants may be held or exercised by the Employee, provided that until such exercise any such rights or warrants and after such exercise any shares or other securities acquired by the exercise of such rights or warrants will be considered to be unvested Restricted Stock and will be subject to all of the conditions and restrictions which were applicable to the Prior Shares pursuant to the Plan and this Agreement. The Administrator in its absolute discretion at any time may accelerate the vesting of all or any portion of such new or additional shares of stock, cash or securities, rights or warrants to purchase securities or shares or other securities acquired by the exercise of such rights or warrants. 13. Grant is Not Transferable. Except to the limited extent provided in paragraph 7 above, the unvested Shares subject to this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any unvested Shares subject to this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void. -3- 14. Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto. 15. Additional Conditions to Issuance of Certificates for Shares and Release from Escrow. The Company shall not be required to issue any certificate or certificates for Shares hereunder or release such Shares from the escrow established pursuant to paragraph 2 prior to fulfillment of all the following conditions: (a) the admission of such Shares to listing on all stock exchanges on which such class of stock is then listed; (b) the completion of any registration or other qualification of such Shares under any state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; (c) the obtaining of any approval or other clearance from any state or federal governmental agency, which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the date of grant of the Restricted Stock as the Administrator may establish from time to time for reasons of administrative convenience. 16. Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not defined in this Agreement will have the meaning set forth in the Plan. 17. Administrator Authority. The Administrator will have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares of Restricted Stock have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon the Employee, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement. 18. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 19. Agreement Severable. In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement. 20. Modifications to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects covered. The Employee expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. 21. Amendment, Suspension or Termination of the Plan. By accepting this award, the Employee expressly warrants that he or she has received a Stock Purchase Right under the Plan, and has received, read and understood a description of the Plan. The Employee understands that the Plan is discretionary in nature and may be modified, suspended or terminated by the Company at any time. 22. Notice of Governing Law. This option shall be governed by, and construed in accordance with, the laws of the State of California without regard to principles of conflict of laws. -4- -----END PRIVACY-ENHANCED MESSAGE-----