1996 Director Stock Option Plan As Amended

APPLIX, INC.


1996 DIRECTOR STOCK OPTION PLAN


(As amended through December 18, 1998)


1. PURPOSE.


The purpose of this 1996 Director Stock Option Plan (the "Plan") of Applix, Inc. (the "Company") is to encourage stock ownership in the Company by outside directors of the Company whose continued services are considered essential to the Company's future success and to provide them with a further incentive to remain as directors of the Company.


2. ADMINISTRATION.


The Board of Directors shall supervise and administer the Plan. Grants of stock options under the Plan and the amount and nature of the options to be granted shall be automatic in accordance with Section 5. However, all questions concerning interpretation of the Plan or any options granted under it shall be resolved by the Board of Directors and such resolution shall be final and binding upon all persons having an interest in the Plan.


3. PARTICIPATION IN THE PLAN.


Directors of the Company who are not full-time employees of the Company or any subsidiary of the Company ("Outside Directors") shall be eligible to receive options under the Plan.


4. STOCK SUBJECT TO THE PLAN.


(a) The maximum number of shares of the Company's Common Stock, par value $.01 per share ("Common Stock"), which may be issued under the Plan shall be 50,000 shares, subject to adjustment as provided in Section 7.


(b) If any outstanding option under the Plan for any reason expires or is terminated without having been exercised in full, the shares covered by the unexercised portion of such option shall again become available for issuance pursuant to the Plan.


(c) All options granted under the Plan shall be non-statutory options not entitled to special tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").


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(d) Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.


5. TERMS, CONDITIONS AND FORM OF OPTIONS.


Each option granted under the Plan shall be evidenced by a written agreement in such form as the Senior Vice President, Finance and Administration shall from time to time approve, which agreements shall comply with and be subject to the following terms and conditions:


(a) OPTION GRANT DATES AND SHARES SUBJECT TO OPTION. Options will be granted under the Plan as follows:


(i) INITIAL GRANTS TO CURRENT OUTSIDE DIRECTORS. An option to purchase
2,500 shares of Common Stock shall be granted automatically on the date of
the approval of the Plan by the stockholders of the Company to each person
then serving as an Outside Director at the close of business on such date.


(ii) INITIAL GRANTS TO FUTURE OUTSIDE DIRECTORS. An option to purchase
5,000 shares of Common Stock shall be granted automatically to each Outside
Director first elected to the Board of Directors after the date of the
approval of the Plan by the stockholders of the Company, upon the date of
his or her initial election to the Board of Directors.


(iii) ANNUAL GRANTS TO OUTSIDE DIRECTORS. An option to purchase 2,500
shares of Common Stock shall be granted automatically to each person
serving as an Outside Director on the close of business on January 1 of
each year.


(b) OPTION EXERCISE PRICE. The option exercise price per share for each option granted under the Plan shall be equal to the fair market value per share of Common Stock on the date of grant, which shall be determined as follows: (i) if the Common Stock is listed on the Nasdaq National Market or another nationally recognized exchange or trading system as of the date on which a determination of fair market value is to be made, the fair market value per share shall be deemed to be the last reported sale price per share of Common Stock thereon on such date (or, if no such price is reported on such date, such price on the nearest preceding date on which such a price is reported); and (ii) if the Common Stock is not listed on the Nasdaq National Market or another nationally recognized exchange or trading system as of the date on which a determination of fair market value is to be made, the fair market value per share shall be equal to the earnings per share of the Company in the most recently completed fiscal year (as publicly reported by the Company) multiplied by 15.


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(c) OPTIONS NON-TRANSFERABLE. Unless otherwise provided in the agreement granting an option pursuant to this Plan, each option granted under the Plan by its terms shall not be transferable by the optionee otherwise than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Code), and sh ...