Exhibit 99.2
ADDENDUM TO STOCK OPTION AGREEMENT
This Addendum (the "Addendum") to the Stock Option Agreement (the
"Option Agreement") pursuant to the Keynote Systems, Inc. 1999 Equity Incentive
Plan by and between Xxxxxx Xxxxxxxx (the "Optionee") and Keynote Systems, Inc.
(the "Company") is entered into by and between Optionee and the Company as of
May 1, 2005.
W I T N E S S E T H
WHEREAS, the Optionee is an officer of the Company; and
WHEREAS, the Company, as a matter of practice, provides for the acceleration, in
certain cases, of the vesting of options ("Options") granted to its officers;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. The Company and the Optionee are entering into this Addendum to the Option
Agreement, concurrently with the execution of the Option Agreement, in
order to specify the terms and conditions of the acceleration, in certain
cases, of the vesting of Options granted to the Optionee under the Option
Agreement.
2. The following language shall be included at the end of 2.1 of the Option
Agreement:
"Notwithstanding the provisions of the preceding sentence regarding the
rate at which this Option shall vest, in the event that upon or after a
Sale of the Company, Optionee's employment with the Company, or its
successor, is terminated without Cause, within twelve months from the
Sale of the Company, then immediately prior to the effectiveness of
such termination this Option shall vest with respect to (i) 25% of the
Shares, if the date of termination is less than one year from date of
grant or (ii) 100% of the Shares, if the date of termination is more
than one year from date of grant. For such purposes, the term "Sale of
the Company" means any sale or disposition of all or substantially all
of the assets of the Company, or any merger or consolidation of the
Company with or into any other corporation, corporations, or other
entity in which more than 50% of the Company's voting power is
transferred. The term "Cause" means (i) willfully engaging in gross
misconduct that is materially and demonstrably injurious to the
Company; (ii) willful and continued failure to substantially perform
Optionee's duties with the Company (other than incapacity due to
physical or mental illness), provided that such failure continues after
the Board of Directors has provided Optionee with a written demand for
substantial performance, setting forth in detail the specific respects
in which it believes Optionee has willfully and not substantially
performed his duties thereof and a reasonable opportunity (to be not
less than 30 days) to cure the same. For the above purposes, a
termination by the Company without Cause includes a termination of
employment by Optionee within 30 days following any one of the
following events: (x) a 10% or more reduction in Optionee's salary that
is not part of a general salary reduction plan applicable to all
officers of the successor Company; (y) a change in Optionee's position
or status to a position that is not at the level of Vice President or
above with the successor; or (z) relocating Optionee's principal place
of business, in excess of fifty (50) miles from the current location of
such principal place of business. This Option shall cease to vest upon
Optionee's Termination and Optionee shall in no event be entitled under
this Option to purchase a number of shares of the Company's Common
Stock greater than the "Total Option Shares."
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Optionee has
executed this Agreement in duplicate as of the date first specified above.
KEYNOTE SYSTEMS INC. OPTIONEE
By: /s/ Xxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxxx
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Xxxxx Xxxxxxx Xxxxxx Xxxxxxxx
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(Please print name) (Please print name)
Vice President of Finance and Chief Financial Officer
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(Please print title)
