Exhibit 4.4
LIVE SOFTWARE, INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is made as of October 1,
1998 (the "Grant Date") by and between Live Software, Inc. (the "Corporation")
and Xxxxxxx Xxxxxxx (the "Optionee").
RECITALS
A. Optionee is to render valuable services to the Corporation, and this
Agreement is executed in order to provide Optionee with the opportunity to
acquire a proprietary interest in the Corporation as an incentive for
Optionee to accept and continue in such employ.
B. All capitalized terms in this Agreement not defined herein shall
have the meaning assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as
of the Grant Date, a Non-Statutory Option (the "Option") to purchase up to
12,000 shares of the Common Stock of the Corporation (the "Option Shares")
at an exercise price of $.03 per share (the "Exercise Price"). The Option
shall be immediately exercisable for all of the Option Shares. The rights of
the Optionee shall be subject to vesting in accordance with the Vesting
Schedule attached hereto as EXHIBIT A.
2. OPTION TERM. This option term of ten (10) years measured from
the Grant Date and shall accordingly expire at the close of business on the
Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. During Optionee's lifetime, this
option shall be exercisable only by Optionee and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following Optionee's death.
4. STOCK PURCHASE AGREEMENT. Optionee understands that any Option
Shares purchased under the Option will be subject to the terms set forth in
the stock Purchase Agreement attached hereto as EXHIBIT B.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(a) Should Optionee cease to remain in Service for any reason
(other than death, Disability or Misconduct) while this option is
outstanding, then Optionee shall have a period of three (3) months
(commencing with the date of such cessation of Service) during which to
exercise this option, but in no event shall this option be exercisable at any
time after the Expiration Date.
(b) Should Optionee die while this option is outstanding, then
the personal representative of Optionee's estate or the person or persons to
whom the option is transferred pursuant to Optionee's will or in accordance
with the laws of inheritance shall have the right to exercise this option.
Such right shall lapse, and this option shall cease to be outstanding, upon
the EARLIER of (i) the expiration of the twelve (12)-month period measured
from the date of Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Disability while
this option is outstanding, then Optionee shall have a period of twelve (12)
months (commencing with the date of such cessation of Service) during which
to exercise this option. In no event shall this option be exercisable at any
time after the Expiration Date.
(d) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number of
Option Shares in which Optionee is, at the time of Optionee's cessation of
Service, vested pursuant to the Vesting Schedule or the special vesting
acceleration provisions of Paragraph 6. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any vested Option Shares for which
the option has not been exercised. To the extent Optionee is not vested in
one or more Option Shares at the time of Optionee's cessation of service,
this option shall immediately terminate and cease to be outstanding with
respect to those shares.
(e) Should Optionee's Service be terminated for Misconduct,
then this option shall terminate immediately and cease to remain outstanding.
NOTHING IN THIS STOCK OPTION AGREEMENT OR THE STOCK PURCHASE AGREEMENT SHALL
CONFER UPON OPTIONEE ANY RIGHT TO CONTINUE IN SERVICE FOR ANY PERIOD OF
SPECIFIC DURATION OR INTERFERE WITH OR OTHERWISE RESTRICT IN ANY WAY THE
RIGHTS OF THE CORPORATION (OR ANY PARENT OR SUBSIDIARY EMPLOYING OR RETAINING
OPTIONEE) OR OF OPTIONEE, WHICH RIGHTS ARE HEREBY EXPRESSLY RESERVED BY EACH,
TO TERMINATE OPTIONEE'S SERVICE AT ANY TIME FOR ANY REASON, WITH OR WITHOUT
CAUSE.
6. ACCELERATED VESTING.
(a) In the event of any Corporate Transaction, the Option
Shares at the time subject to this option but not otherwise vested shall
automatically vest in full so that this option shall, immediately prior to
the effective date of the Corporate Transaction, become exercisable for all
of the Option Shares as fully-vested shares and may be exercised for any or
all of those Option Shares as vested shares. However, the Option Shares
shall NOT vest on such an accelerated basis if and to the extent: (i) this
option is assumed by the successor corporation (or
2.
parent thereof) in the Corporate Transaction and the Corporation's repurchase
rights with respect to the unvested Option Shares are assigned to such
successor corporation (or parent thereof) or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing on the unvested Option Shares at the time of
the Corporate Transaction (the excess of the Fair Market Value of those
Option Shares over the Exercise Price payable for such shares) and provides
for subsequent payout in accordance with the same Vesting Schedule applicable
to those unvested Option Shares under this Stock Option Agreement.
(b) Immediately following the Corporate Transaction, this
option shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) in connection with
the Corporate Transaction.
(c) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply to the number and class of
securities which would have been issuable to Optionee in consummation of such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, PROVIDED the aggregate Exercise Price shall remain the same.
(d) The Option Shares may also vest upon an accelerated basis
in accordance with the terms and conditions of any special addendum attached
to this Agreement.
(e) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve, liquidate or sell
or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price
in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
8. SHAREHOLDER RIGHTS. The holder of this option shall not have
any shareholder rights with respect to the Option Shares until such person
shall have exercised the option, paid the Exercise Price and become the
record holder of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable
Optionee (or any other person or persons exercising the option) must take the
following actions:
3.
(i) Execute and deliver to the Corporation a Stock
Purchase Agreement for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A)cash or check made payable to the Corporation;
or
(B)a promissory note payable to the Corporation, but
only to the extent authorized by the Board in accordance with
Paragraph 14.
Should the Common Stock be registered under Section 12 of the
1934 act at the time the option is exercised, then the Exercise
Price may also be paid as follows:
(C)in shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date; or
(D)to the extent the option is exercised for vested
Option Shares, through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable
instructions (a) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate Exercise Price payable
for the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b) to the Corporation to
deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Purchase Agreement delivered to
the Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than
Optionee) have the right to exercise this option.
4.
(iv) Execute and deliver to the Corporation such written
representations as may be requested by the Corporation in order for
it to comply with the applicable requirements of Federal and state
securities laws.
(v) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all Federal, state and local income and employment
tax withholding requirements applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option
Shares, with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10.REPURCHASE RIGHTS. ALL OPTION SHARES ACQUIRED UPON THE EXERCISE
OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE CORPORATION AND ITS
ASSIGNS TO REPURCHASE THOSE SHARES IN ACCORDANCE WITH THE TERMS SPECIFIED IN
THE STOCK PURCHASE AGREEMENT.
11.COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation
and Optionee with all applicable requirement of law relating thereto and with
all applicable regulations of any stock exchange (or the Nasdaq National
Market, if applicable) on which the Common Stock may be listed for trading at
the time of such exercise and issuance.
(b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to
the non-issuance or sale of the Common Stock as to which such approval shall
not have been obtained. The Corporation, however, shall use its best efforts
to obtain all such approvals.
12.SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
13.NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee's signature
hereto.
5.
All notices shall be deemed effective upon personal delivery or upon deposit
in the U.S. mail, postage prepaid and properly addressed to the party to be
notified.
14.FINANCING. The Board may, in its absolute discretion and without
any obligation to do so, permit Optionee to pay the Exercise Price for the
purchased Option Shares by delivering a full-recourse, interest-bearing
promissory note secured by those Option shares. The payment schedule in
effect for any such promissory note shall be established by the Board in its
sole discretion.
15.GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.
6.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first indicated above.
LIVE SOFTWARE, INC.
By: /s/ Xxxx Xxxxxx
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Title: President & CEO
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Address: 00000 Xxxxxxx Xxxxx Xxxx.
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Xxxxxxxxx, XX 00000
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/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
Address: 000 XXXXXX XXXXX
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XXXXXX, XX 00000
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SPOUSAL ACKNOWLEDGMENT
The undersigned spouse of Optionee has read and hereby approves the
foregoing Stock Option Agreement. In consideration of the Corporation's
granting Optionee the right to acquire the Purchased Shares in accordance
with the terms of such Agreement, the undersigned hereby agrees to be
irrevocably bound by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to purchase any
Purchased Shares in which Optionee is not vested at time of his or her
cessation of Service in accordance with the Stock Purchase Agreement.
/s/ Xxxxxx Xxxxxxx
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OPTIONEE'S SPOUSE
Address: 000 Xxxxxx Xx
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Xxxxxx, XX 00000
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7.
EXHIBIT A
VESTING SCHEDULE
11/1/98 2,000
12/1/98 2,000
1/1/99 2,000
2/1/99 2,000
3/1/99 2,000
4/1/99 2,000
2.
EXHIBIT B
STOCK PURCHASE AGREEMENT
3.
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:
(i)a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction,or
(ii)the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
F. CORPORATION shall mean Live Software, Inc., a California corporation.
G. DISABILITY shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment and shall be determined by the Board on the basis of such
medical evidence as the Board deems warranted under the circumstances.
Disability shall be deemed to constitute PERMANENT DISABILITY in the event
that such Disability is expected to result in death or has lasted or can be
expected to last for a continuous period of twelve (12) months or more.
H. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the
manner and method of performance.
I. EXERCISE DATE shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.
J. EXERCISE PRICE shall mean the exercise price payable per Option Share
as specified in the Stock Option Agreement.
K. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Stock Option Agreement.
A-1
L. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i)If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as the price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.
(ii)If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Board to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock
on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
(iii)If the Common Stock is at the time neither listed on any
Stock Exchange nor traded on the Nasdaq National Market, then the Board
shall determine the Fair Market Value after taking into account such
factors as the Board shall deem appropriate.
X. XXXXX DATE shall mean the date of grant of the option as specified in
the Stock Option Agreement.
N. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or
any Parent or Subsidiary), or any other intentional misconduct by Optionee
adversely affecting the business or affairs of the Corporation (or any Parent
or Subsidiary) in a material manner. The foregoing definition shall not be
deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or subsidiary) may consider as grounds for the dismissal or
discharge of Optionee or any other individual in the Service of the
Corporation (or any Parent or Subsidiary).
O. 1934 ACT shall mean the Securities Exchange of Act of 1934, as
amended.
P. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
Q. OPTION SHARES shall mean the number of shares of Common Stock subject
to the option.
R. OPTIONEE shall mean the person to whom the option is granted.
A-2
S. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
T. PURCHASE AGREEMENT shall mean the stock purchase agreement
substantially as set forth in the form of EXHIBIT B to the Stock Option
Agreement.
U. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant.
V. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
Stock Exchange.
W. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain
owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
X. VESTING SCHEDULE shall mean the vesting schedule specified in EXHIBIT
A to the Stock Option Agreement pursuant to which the Optionee is to vest in
the Option Shares in a series of installments over his or her period of
Service.
A-3.
