Exhibit
10.7
FORM OF NONEMPLOYEE DIRECTOR
STOCK OPTION
AGREEMENT
AGREEMENT made as of the
day of
, between BMC SOFTWARE, INC., a Delaware corporation (the
“Company”), and
(“Director”).
To carry out the purposes of the BMC SOFTWARE, INC. 1994
EMPLOYEE INCENTIVE PLAN (the “Plan”), by affording
Director the opportunity to purchase shares of the common stock of
the Company, par value $.01 per share (“Stock”), and in
consideration of the mutual agreements and other matters set forth
herein and in the Plan, the Company and Director hereby agree as
follows:
1. Grant of
Option . The Company hereby
irrevocably grants to Director the right and option
(“Option”) to purchase all or any part of an aggregate
of
shares of Stock on the terms and conditions set forth herein and in
the Plan, which Plan is incorporated herein by reference as a part
of this Agreement. In the event of any conflict between the terms
of this Agreement and the Plan, the Plan shall control. Capitalized
terms used but not defined in this Agreement shall have the meaning
attributed to such terms under the Plan, unless the context
requires otherwise. This Option shall not be treated as an
incentive stock option within the meaning of section 422(b) of the
Code.
2. Purchase
Price . The purchase price of Stock
purchased pursuant to the exercise of this Option shall be $
per share, which has been determined to be not less than the Fair
Market Value of the Stock at the date of grant of this Option. For
all purposes of this Agreement, Fair Market Value of Stock shall be
determined in accordance with the provisions of the Plan.
3. Exercise
of Option . Subject to the earlier
expiration of this Option as herein provided, this Option may be
exercised, by written notice to the Company at its principal
executive office addressed to the attention of its Corporate
Secretary (or such other officer or employee of the Company as the
Company may designate from time to time), at any time and from time
to time after the date of grant hereof, but, except as otherwise
provided below, this Option shall not be exercisable until [DATE
ONE YEAR FROM DATE OF GRANT]. Notwithstanding the foregoing
sentence, if (a) the next succeeding meeting of the
Company’s stockholders for the purpose of electing directors
(the “Next Annual Meeting”) is held prior to [DATE ONE
YEAR FROM DATE OF GRANT]; (b) Director has been a member of
the Board continuously from the date of grant of this Option to the
date of the Next Annual Meeting; and (c) Director is not
elected to serve as a director for an additional term at the Next
Annual Meeting, whether due to retirement or otherwise, then this
Option shall become exercisable in full on the date of the Next
Annual Meeting and shall remain exercisable for three years
following such date.
Notwithstanding the foregoing, if a Change in Control shall occur
prior to the date upon which this Option is exercisable in full as
provided above and if Director has been a member of the Board
continuously from the date of grant of this Option to the date of
such Change in Control, then this Option shall become exercisable
in full on the date of such Change in Control. For purposes of the
preceding sentence, the term “Change in Control” shall
mean any of the following circumstances: (a) the acquisition,
directly or indirectly, by any person or related group of persons
(other than the Company or a person that directly or indirectly
controls, is
controlled by, or is
under common control with, the Company) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities pursuant
to a tender or exchange offer made directly to the Company’s
stockholders; (b) a change in the composition of the Board
over a period of thirty-six (36) consecutive months or less
such that a majority of the Board members ceases, by reason of one
or more contested elections for Board membership, to be comprised
of individuals who either (A) have been Board members
continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such
period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election
or nomination was approved by the Board; or (c) a merger or
consolidation in which securities possessing at least forty percent
(40%) of the total combined voting power of the
Company’s outstanding securities are transferred to a person
or persons different from the persons holding those securities
immediately prior to such transaction, or the sale, transfer or
other disposition of all o
