XVT SOFTWARE INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
XVT Software Inc., a Delaware corporation (the "Company"), hereby grants
on this 18th day of January, 1995, to Xxxxxxxxxxx Xxxx (the "Optionee"), an
option to purchase a maximum of 12,000 shares of its common stock, $.0005 par
value (the "Common Stock"), at the price of $3.20 per share, on the following
terms and conditions:
1. GRANT AS NON-QUALIFIED OPTION; OTHER OPTIONS. This option shall be
treated for federal income tax purposes as a Non-Qualified Option (rather
than an incentive stock option), and the Board of Directors will take
appropriate action, if necessary, to achieve this result. This option is in
addition to any other options which may hereafter be granted to the Optionee
by the Company, but a duplicate original of this instrument shall not effect
the grant of another option.
2. VESTING OF OPTION IF BUSINESS RELATIONSHIP CONTINUES. If the
Optionee has continued to serve the Company, its parent (if any) and any
present or future subsidiaries (each a "Related Corporation") in the capacity
of an employee, officer, director or consultant (such service is described
herein as maintaining or being involved in a "Business Relationship" with the
Company) on the following dates, the Optionee may exercise this option for
the number of shares of Common Stock set opposite the applicable date:
Less than one year from the date hereof 0 shares
One year but less than two years from the
additional date thereof 3,000 shares
Two years but less than an additional
three years from the date hereof 3,000 shares
Three years but less than an additional
four years from the date hereof 3,000 shares
Four years but less than an additional
five years from the date hereof 3,000 shares
The foregoing rights are cumulative and, while the Optionee continues to
maintain a Business Relationship with the Company, may be exercised on or
before the date which is 10 years minus one day, from the date this option is
granted. All of the foregoing rights are subject to Sections 3, 4 and 16 as
appropriate, if the Optionee ceases to maintain a Business Relationship with
the Company, dies, becomes disabled or undergoes dissolution while involved
in a Business Relationship with the Company or is terminated for cause.
3. TERMINATION OF BUSINESS RELATIONSHIP. If the Optionee ceases to
maintain a Business Relationship with the Company, other than by reason of death
or disability as defined in
Section 4, or for Cause as defined in Section 16 no further installments of
this option shall become exercisable and this option shall terminate after
the passage of sixty (60) days from the date the Business Relationship
ceases, but in no event later than the scheduled expiration date. In such a
case, the Optionee's only rights hereunder shall be those which are properly
exercised before the termination of this option.
4. DEATH; DISABILITY; DISSOLUTION.
(a) If the Optionee is a natural person who dies while involved in a
Business Relationship with the Company, this option may be exercised, to
the extent of the number of shares with respect to which the Optionee
could have exercised it on the date of his death, by his estate,
personal representative or beneficiary to whom this option has been
assigned pursuant to Section 9, at any time within 180 days after the
date of death, but not later than the scheduled expiration date. At the
expiration of such 180-day period or the scheduled expiration date,
whichever is the earlier, this option shall terminate and the only
rights hereunder shall be those as to which the option was properly
exercised before such termination.
(b) If the Optionee is a natural person whose Business Relationship
with the Company is terminated by reason of his disability, this option
may be exercised, to the extent of the number of shares with respect to
which the Optionee could have exercised it on the date the Business
Relationship was terminated, at any time within 180 days after the date
of such termination, but not later than the scheduled expiration date.
At the expiration of such 180-day period or the scheduled expiration
date, whichever is the earlier, this option shall terminate and the only
rights hereunder shall be those as to which the option was properly
exercised before such termination. For the purposes of this Agreement,
the term "disability" shall mean "permanent and total disability" as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended, or a successor statute. If the Optionee is a corporation,
partnership, trust or other entity that is dissolved, liquidated,
becomes insolvent or enters into a merger or acquisition with respect to
which such Optionee is not the surviving entity at the time when such
entity is involved in a Business Relationship with the Company, this
Option shall immediately terminate as of the date of such event, and the
only rights hereunder shall be those as to which this option was
properly exercised before such dissolution or other event
5. PARTIAL EXERCISE. Exercise of this option may be made in part at any
time and from time to time within the limits set forth in Section 2, except that
this option may not be exercised for a fraction of a share unless such exercise
is with respect to the final installment of stock subject to this option and a
fractional share must be issued to permit the Optionee to exercise completely
such final installment, in which case, the Optionee shall receive from the
Company cash in lieu of any fractional share. Any fractional share with respect
to which an installment of this option cannot be exercised because of the
limitation contained in the preceding sentence shall remain subject to this
option and shall be available for later purchase by the Optionee in accordance
with the terms hereof.
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6. PAYMENT OF PRICE. The option price is payable in United States
dollars and may be paid in cash or by check, or any combination of the
foregoing, equal in amount to the option price.
7. AGREEMENT TO PURCHASE FOR INVESTMENT. By acceptance of this
option, the Optionee agrees that a purchase of shares under this option will
not be made with a view to their distribution, as that term is used in the
Securities Act of 1933, as amended (the "Act"), unless in the opinion of
counsel to the Company such distribution is in compliance with or exempt from
the registration and prospectus requirements of the Act, and the Optionee
agrees to sign a certificate to such effect at the time of exercising this
option and agrees that the certificate for the shares so purchased may be
inscribed with a legend to ensure compliance with the Act.
8. METHOD OF EXERCISING OPTION. Subject to the terms and conditions
of this Agreement, this option may be exercised by written notice to the
Company, at the principal executive office of the Company, or to such
transfer agent as the Company shall designate. Such notice shall state the
election to exercise this option and the number of shares in respect of which
it is being exercised and shall be signed by the person or persons so
exercising this option. Such notice shall be accompanied by payment of the
full purchase price of such shares, and the Company shall deliver a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received. The certificate or certificates for the
shares as to which this option shall have been so exercised shall be
registered in the name of the person or persons so exercising this option
(or, if this option shall be exercised by the Optionee and if the Optionee
shall so request in the notice exercising this option, shall be registered in
the name of the Optionee and another person jointly, with right of
survivorship) and shall be delivered as provided above to or upon the written
order of the person or persons exercising this option. In the event this
option shall be exercised, pursuant to Section 4 hereof, by any person or
persons other than the Optionee, such notice shall be accompanied by
appropriate proof, as reasonably determined by the Board of Directors, of the
right of such person or persons to exercise this option. All shares that
shall be purchased upon the exercise of this option as provided herein shall
be fully paid and nonassessable.
9. OPTION NOT TRANSFERABLE. This option is not transferable or
assignable except by will or by the laws of descent and distribution. During
the Optionee's lifetime, this option shall be exercisable only by the
Optionee.
10. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of this
option imposes no obligation on the Optionee to exercise it.
11. NO OBLIGATION TO CONTINUE BUSINESS RELATIONSHIP. This Agreement
imposes no obligation on the Company or any Related Corporation to continue
to maintain a Business Relationship with the Optionee.
12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Optionee shall have
no rights as a stockholder with respect to shares subject to this Agreement
until a stock certificate therefor has been issued to the Optionee and is
fully paid for. Except as is expressly provided in this Agreement with
respect to certain changes in the capitalization of the Company, no
adjustment shall be made
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for dividends or similar rights for which the record date is prior to the
date such stock certificate is issued.
13. ADJUSTMENTS. Upon the occurrence of any of the following events, the
Optionee's rights with respect to this option shall be adjusted as hereinafter
provided:
(a) STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock
dividend on its outstanding Common Stock, the number of shares of Common
Stock deliverable upon the exercise of this options shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall
be made in the purchase price per share to reflect such subdivision,
combination or stock dividend.
(b) CONSOLIDATION AND MERGERS. If the Company is to be consolidated
with or acquired by another entity, in a merger, sale of all or
substantially all of the Company's assets or otherwise (an "Acquisition"),
the Board of Directors of the Company shall either (i) make appropriate
provision for the continuation of this option by substituting on an
equitable basis for the shares then subject to this option the
consideration payable with respect to the outstanding shares of Common
Stock in connection with the Acquisition; or (ii) upon written notice to
the Optionee, provide that this option must be exercised, to the extent
then exercisable, within a specified number of days of the date of such
notice, at the end of which period this option shall terminate; or (iii)
terminate this option in exchange for cash payment equal to the excess of
the fair market value of the shares subject to this option (to the extent
then exercisable) over the exercise price hereof.
(c) RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph (b) above) pursuant to which securities of the
Company or of another corporation are issued with respect to the
outstanding shares of Common Stock, the Optionee upon exercising this
option shall be entitled to receive for the purchase price paid upon such
exercise the securities he/she would have received if he/she had exercised
this option prior to such recapitalization or reorganization.
(d) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company this option will terminate
immediately prior to the consummation of such proposed action or at such
other time and subject to such other conditions as shall be determined by
the Board of Directors of the Company.
(e) ISSUANCE OF SECURITIES. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to this option. No adjustment shall be made for
dividends paid in cash or in property other than securities of the Company.
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(f) ADJUSTMENTS. The Board of Directors of the Company shall
determine the specific adjustments to be made under this Section 13 and its
determination shall be conclusive.
14. WITHHOLDING TAXES. The Optionee hereby agrees that the Company may
withhold from the Optionee's wages or other remuneration the appropriate
amount of federal, state and local taxes attributable to the Optionee's
exercise of any installment of this option. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such wages or
other remuneration, or in kind from the Common Stock otherwise deliverable to
the Optionee on exercise of this option. The Optionee further agrees that,
if the Company does not withhold an amount from the Optionee's wages or other
remuneration sufficient to satisfy the Company's withholding obligation, the
Optionee will reimburse the Company on demand, in cash, for the amount under
withheld.
15. COMPANY'S RIGHT OF FIRST REFUSAL.
(a) EXERCISE OF RIGHT: If the Optionee desires to sell all or any
part of the shares acquired under this option (including any securities
received in respect thereof pursuant to any stock dividend, stock split,
reclassification, reorganization, recapitalization and the like), and an
offeror (the "Offeror") has made an offer therefor, which offer the
Optionee desires to accept, the Optionee shall: (i) obtain in writing an
irrevocable and unconditional bona fide offer (the "Bona Fide Offer") for
the purchase thereof from the Offeror; and (ii) give written notice (the
"Option Notice") to the Company setting forth his or her desire to sell
such shares, which Option Notice shall be accompanied by a photocopy of the
original executed Bona Fide Offer and shall set forth at least the name and
address of the Offeror and the price and terms of the Bona Fide Offer.
Upon receipt of the Option Notice, the Company shall have an assignable
option to purchase any or all of such shares (the "Option Shares")
specified in the Option Notice, such option to be exercisable by giving,
within 30 days after receipt of the Option Notice, a written counter-notice
to the Optionee. If the Company elects to purchase any or all of such
Option Shares, it shall be obligated to purchase, and the Optionee shall be
obligated to sell to the Company, such Option Shares at the price and terms
indicated in the Bona Fide Offer within 60 days from the date of receipt by
the Company of the Option Notice.
(b) SALE OF OPTION SHARES TO OFFEROR: The Optionee may, for 60 days
after the expiration of the 30-day period during which the Company may give
the aforesaid counter-notice, sell, pursuant to the terms of the bona Fide
Offer, any or all of such Option Shares not purchased or agreed to be
purchased by the Company; PROVIDED, HOWEVER, that the Optionee shall not
sell such Option Shares to the Offeror if the Offeror is a competitor of
the Company and the Company gives written notice to the Optionee within 30
days of its receipt of the Option Notice, stating that the Optionee shall
not sell his Option Shares to the Offeror, and PROVIDED, FURTHER, that
prior to the sale of such Option Shares to the Offeror, the Offeror shall
execute an agreement with the Company pursuant to which the Offeror agrees
to be subject to the restrictions set forth in this Section 15. If any or
all of such Option Shares are not sold
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pursuant to a bona Fide Offer within the time permitted above, the
unsold Option Shares shall remain subject to the terms of this Section
15.
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE: If there shall be
any change in the Common Stock of the Company due to any stock dividend,
stock split, reclassification, merger, consolidation, reorganization,
recapitalization, exchange of shares or similar changes in capital
structure, the restrictions contained in this Section 15 shall apply with
equal force to additional and/or substitute securities, if any, received by
the Optionee in exchange for, or by virtue of his or her ownership of,
Option Shares.
(d) FAILURE TO DELIVER OPTION SHARES: In the event the Optionee
fails or refuses to deliver on a timely basis duly endorsed certificates
representing Option Shares to be sold to the Company pursuant to this
Section 15, the Company shall have the right to deposit the purchase price
for the Option Shares in a special account with any bank or trust company
in the State of Colorado, giving notice of such deposit to the Optionee,
whereupon such Option Shares shall be deemed to have been purchased by the
Company. All such moneys shall be held by the bank or trust company for
the benefit of the Optionee. All moneys deposited with the bank or trust
company remaining unclaimed for two (2) years after the date of deposit
shall be repaid by the bank or trust company to the Company on demand, and
the Optionee shall thereafter look only to the Company, for payment. The
Company may place a legend on any stock certificate delivered to the
Optionee reflecting the restrictions on transfer provided- in this Section
15.
(e) EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL. The first
refusal rights of the Company set forth above shall remain in effect until
such time, if ever, as a distribution to the public is made of shares of
the Company's Common Stock for an aggregate public offering price of at
least $8,000,000 or more pursuant to a registration statement filed under
the Act or a successor statute, at which time the first refusal rights of
the Company set forth herein will automatically expire.
16. NO EXERCISE OF OPTION IF BUSINESS RELATIONSHIP TERMINATED FOR
CAUSE. If the Business Relationship of the Optionee is terminated for "Cause"
(as hereinafter defined) pursuant to this Section 16, this option shall
terminate at the time of such termination of the Business Relationship and
shall thereafter not be exercisable to any extent whatsoever. "Cause" is
conduct involving one or more of the following: (i) the substantial and
continuing failure of the Optionee to render services to the Company in
accordance with the terms or requirements of the Business Relationship; (ii)
a determination in good faith by two-thirds of the members of the Board of
Directors that the Optionee has inadequately performed the requirements of
its Business Relationship; (iii) disloyalty, gross negligence, willful
misconduct, dishonesty or breach of fiduciary duty to the Company; (iv) the
commission of an act of embezzlement or fraud; (v) deliberate disregard of
the rules or policies of the Company which results in loss, damage or injury
to the Company, whether directly or indirectly; (vi) the unauthorized
disclosure of any trade secret or confidential information of the Company; or
(vii) the commission of an act which constitutes unfair competition with the
Company or which induces any customer of the Company to break a contract
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with the Company. For the purposes of this Section 16, termination of the
Business Relationship shall be deemed to occur when the Optionee receives
notice that its Business Relationship is terminated pursuant to this Section
16.
17. COMPANY'S RIGHT OF REPURCHASE.
(a) RIGHTS OF REPURCHASE. If any of the events specified in Section
17(b) below occur, then: (i) with respect to shares acquired upon exercise
of this option prior to the occurrence of such event, within 60 days after
the Company receives actual knowledge of the event, and (ii) with respect
to shares acquired upon exercise of this option after the occurrence of
such event, within 60 days following the later of the date of such exercise
or the date the Company receives actual knowledge of such event, (in either
case, the "Repurchase Period"), the Company shall have the option, but not
the obligation, to repurchase all, but not a portion of, the shares from
the Optionee, or his or her legal representatives, as the case may be (the
"Repurchase Option"). The Repurchase Option shall be exercised by the
Company by giving the Optionee, or his or her legal representative, written
notice of its intention to exercise the Repurchase Option on or before the
last day of the Repurchase Period, and, together with such notice,
tendering to the Optionee, or legal representative, an amount equal to the
higher of the option price or the fair market value of the shares. The
Company, may, in exercising the Repurchase Option, designate one or more
nominees to purchase the shares either within or without the Company. Upon
timely exercise of the Repurchase Option in the manner provided in this
Section 17(a), the Optionee, or his or her legal representative, shall
deliver to the Company the stock certificate or certificates representing
the shares being repurchased, duly endorsed and free and clear of any and
all liens, charges and encumbrances.
If shares are not purchased under the Repurchase Option, the Optionee
and his or her successor in interest, if any, will hold any such shares in
possession subject to all of the provisions of this Agreement.
(b) COMPANY'S RIGHT TO EXERCISE REPURCHASE OPTION: The Company shall
have the Repurchase Option in the event that any of the following events
shall occur: (i) the termination of the Optionee's Business Relationship
with the Company or any Related Corporation, voluntarily or involuntarily,
for any reason whatsoever, including death or permanent disability, prior
to the time this option shall be fully vested as provided in Section 2
hereof, (ii) the receivership, bankruptcy or other creditor's proceeding
regarding the Optionee or the taking of any of Optionees shares acquired
upon exercise of this option by legal process, such as a levy of execution;
(iii) distribution of shares held by the Optionee to his or her spouse as
such spouse's joint or community interest pursuant to a decree of
dissolution, operation of law, divorce, property settlement agreement or
for any other reason, except as may be otherwise permitted by the Company;
or (iv) the termination of the Optionee's Business Relationship by the
Company for Cause (as defined in Section 16 hereof).
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(c) DETERMINATION OF FAIR MARKET VALUE: The fair market value of the
shares subject to this option shall be, for purposes of this Section 17, an
amount per share determined on the basis of the price at which shares of
the Common Stock could reasonably be expected to be sold in an arms-length
transaction, for cash, other than on an installment basis, to a person not
employed by, controlled by, in control of or under common control with the
Company. Fair market value shall be determined by the Board of Directors,
giving due consideration to recent grants of incentive stock options for
shares of the Common Stock, if any; recent transactions involving shares of
the Common Stock, if any; earnings of the Company to the date of such
determination; projected earnings of the Company; the effect of the
transfer restrictions to which the shares are subject under law and this
Agreement; the presence or absence of a public market for the Common Stock
and such other matters as the Board of Directors deems pertinent. The
determination by the Board of Directors of the fair market value shall be
conclusive and binding. The fair market value of the shares shall be
determined as of the day on which the event (as specified in Section 17(b)
above) occurs.
18. ACCELERATION AND VESTING OF OPTION FOR BUSINESS COMBINATIONS. If
the Company is to be involved in an Acquisition, then this option shall,
immediately prior to the consummation of such Acquisition, become fully
vested and immediately exercisable by the Optionee.
19. LOCK-UP AGREEMENT. The Optionee agrees that the Optionee will not,
for a period of at least 120 days following the effective date of the
Company's initial distribution of securities in an underwritten public
offering to the general public pursuant to a registration statement filed
with the Securities and Exchange Commission, directly or indirectly, sell,
offer to sell or otherwise dispose of the Company's securities other than any
securities which are included in such initial public offering.
20. GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Delaware, without giving effect
to the principles of the conflicts of laws thereof.
IN WITNESS WHEREOF the Company and the Optionee have caused this
instrument to be executed as of the date first above written.
/s/ Xxxxxxxxxxx Xxxx XVT Software Inc.
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Optionee signature
Xxxxxxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
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Name
Title: CEO
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Street Address
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Date:
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City, State Zip
October 3, 1996
Xx. Xxxxxxxxxxx X. Xxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Re: Accelerated XVT Stock option grants
Dear Xxxxxxxxxxx:
As result of the closing of the Agreement of Purchase and Sale of Assets by
and between XVT Software Inc. and Copper Lake Investors, LLC, your option
agreements with XVT (now exercisable for Peregrine Systems, Inc. stock
pursuant to the terms of the Agreement and Plan of Merger of November 30,
1995 by and among Peregrine Systems, Inc., XVT Acquisition Corp., and XVT
Software Inc.) have accelerated vesting in accordance with the terms of your
option agreement(s). In accordance with your option agreement, you have a
right to exercise options as follows:
GRANT DATE SHARES
---------- ------
January 18, 1995 1,413
Your grant and subsequent conversion to Peregrine Systems stock may have
resulted in partial shares which, should you exercise your options, will be
paid in cash. These options are exercisable at a price of $8.48 per share.
Should you have any further questions, please do not hesitate to contact me.
Very truly yours,
/s/ Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
RTN/km
