[LETTERHEAD]
November 5, 1997 CONFIDENTIAL
Board of Directors
Centura Software Corporation
000 Xxxxxx Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000
RE: XXXXXX & XXXX, INC. MANAGEMENT CONTRACT
Gentlemen:
This letter sets out the terms and conditions upon which XXXXXX & XXXX, INC.
("H&H") would be engaged to provide management services to Centura Software
Corporation ("Centura" or the "Company"). Furthermore, it is our
understanding that the Board is in agreement with the general terms and
conditions of this effort and that the Company has the approvals necessary to
execute this agreement. We are prepared to undertake this engagement per the
following:
SERVICES
Services to be provided would be at the direction of the Company's Board
of Directors. At present it is contemplated that such services would
include the following:
- Performing duties of the Chief Executive Officer, Chief Financial
Officer and the principal marketing officer during the engagement,
as appropriate. Such duties will be performed initially by Xxxxx
Xxxxxxxxxx, Xxxx Xxxxxx and Xxxxx Xxxx, respectively. During the
month of November, 1997, however, the positions being filed are
that of the Chief Operations Officer, V.P. of Finance and the
principal marketing officer.
- Development and implementation of a plan to improve shareholder
value, through development and implementation of an updated
business plan, subject to the Company's Board of Directors.
1
- Assist the Board of Directors in execution of Progress Software's
("Progress") acquisition interest. Our understanding is that
Progress will deliver a letter of intent, or equivalent by December
1, 1997.
The initial term of this engagement will extend through December 31,
1999. Moreover, this engagement may be terminated by either party upon
90 days prior written notice. In the event of termination, the Options
will continue to vest monthly for an additional 90 days (monthly basis)
after written notice.
COMPENSATION
H&H would be compensated as follows:
A. $70,000 per month for the first two months, $50,000 per month
thereafter. The monthly fee will be due and payable in advance on the
first day of each month. Reimbursable business expenses will be due upon
presentation of an invoice. Further, the Company will pay H&H an
additional $25,000 for work performed during the second half of October,
1997.
B. Non-statutory stock options to purchase 1,500,000 shares of common
stock of the Company at a price equal to the closing price on the NASDAQ
stock market on the day prior to the signing of this contract, to be
issued pursuant to a Company stock option plan (the "Options") approved
and duly adopted by the Board of Directors of the Company, but not
subject to shareholder approval (unless otherwise required by the
NASDAQ). Such Options, unless the Progress acquisition occurs, will vest
in increments of 25% every six months after commencement of the
engagement, with an accelerated vesting in the event of a "Change of
Control" (defined in Section E below).
C. In the event that Progress enters into a letter of intent or
memorandum of understanding by December 1, 1997 to acquire the Company
and H&H is involved in the running of the business, then the Options
will vest monthly beginning November 1, 1997 (at the beginning of the
month -- 62,500 shares / month), plus the monthly cash compensation as
defined above in Section A.
D. Reimbursement of all reasonable business expenses.
E. As used above in Section B., "Change of Control" shall mean any of
the following events, subject to a Progress carve out:
- All or substantially all of the assets of the Company are sold,
exchanged or otherwise transferred in one or more transactions;
- The Company is merged or consolidated with or into another
corporation with the effect that the common stockholders with the
effect that the common stockholders immediately prior to such
merger or consolidation hold less than 75% of the ordinary voting
power of the outstanding securities of the
2
surviving corporation of such merger or the corporation resulting
from such consolidation;
- A person or group (such as term is used in rule 13d-5 under the
Securities and Exchange Act of 1934) shall, as a result of the
tender or exchange offer, open market purchases, merger, private
placement or otherwise, have become, directly or indirectly, the
beneficial owner (within the meaning of the rule 13d-5 under the
Securities and Exchange Act of 1934) or securities having 25% or
more of the voting power of then outstanding securities of the
Company.
ADMINISTRATIVE MATTERS
1. The Company grants to H&H permission to participate in discussions,
on the Company's behalf, with third parties and disclose such
information which, in H&H's sole discretion, is considered appropriate.
Any of the H&H representatives may be involved with these discussions.
The Company further agrees that all written materials and documents
prepared by or gathered by H&H are, or become, the property of H&H.
2. H&H makes no representation nor can offer any assurance that the
Company can, in fact, become or remain profitable or that the means
required in that attempt will be acceptable to the Company. H&H would
commit its best effort and experience in this engagement, but it can
provide no further commitment or guarantee of any kind as to the results.
3. Neither H&H nor any of its officers, directors, shareholders, agents,
employees or associates will be liable to the Company, or any of its
investors or to anyone who may claim any right due to a relationship
with the Company for any acts or omissions in the performance of
services under the terms of this agreement, unless the acts are due to
gross negligence of H&H. The Company will indemnify and hold H&H and
each of its officers, directors, shareholders, agents, employees and
associates who become involved in providing services pursuant to the
arrangement herein, free and harmless from obligations, costs, claims,
losses, liabilities, damages, injuries, judgments and expenses,
including, but not limited to, attorney's fees and any attachments
arising from, growing out of or in any way connected with services
rendered to the Company under the terms of this agreement unless H&H or
any of its officers, directors, shareholders, agents, employees or
associates is judged by a court of competent jurisdiction to be guilty
of gross negligence.
4. Prior to commencing the performance of any services hereunder, H&H
shall be satisfied that this agreement had been duly authorized by all
necessary corporate action of the part of the Company, including, if
applicable, shareholder approval.
5. H&H will be performing services hereunder as an independent
contractor and not as an employee of the Company. The Company
acknowledges and agrees to this action.
3
6. Further, if any action at law or in equity, including any action for
declaratory relief, is brought to enforce or interpret the provisions of
this agreement, the prevailing party will be entitled to reasonable
attorney's fees.
We appreciate the opportunity to work with the Board on this engagement. If
you agree with the above, please sign both letters and return one copy to our
firm.
Sincerely,
/s/ SRB
Xxxxx X. Xxxxxxxxxx
Principal
AGREED AND ACCEPTED THIS 6TH DAY OF NOVEMBER, 1997
---
BY: /s/ S XXXXX , OF CENTURA SOFTWARE.
--------------------------
Xxx Xxxxx, CEO
4
CENTURA SOFTWARE CORPORATION
NOTICE OF NONSTATUTORY STOCK OPTION GRANT
Optionee's Name and Address:
Xxxxx Xxxxxxxxxx
Centura Software Corporation
000 Xxxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
You have been granted an option to purchase Common Stock of Centura Software
Corporation (the "Company"), as follows:
Board Approval Date: November 6, 1997
-------------------------------------
Date of Grant (Later of Board
Approval Date or Commencement of
Employment/ Consulting): November 6, 1997
-------------------------------------
Exercise Price Per Share: $1.906
-------------------------------------
Total Number of Shares Granted: 750,000
-------------------------------------
Total Price of Shares Granted: $1,429,500.00
-------------------------------------
Term/Expiration Date: November 5, 2007
-------------------------------------
Vesting Commencement Date: November 5, 1997
-------------------------------------
Vesting Schedule: 25% of the shares subject to the
option shall be exercisable as of
the Vesting Commencement Date and
thereafter 25% of the shares subject
to the option shall become exercisable
on each subsequent six month anniversary
of the Vesting Commencement Date as
follows: an additional 25% of the shares
become exercisable on May 5, 1998, an
additional 25% of the shares become
exercisable on November 5, 1998 and and
additional 25% of the shares become
exercisable on May 5, 1999; provided,
however, that 100% of the shares subject
to the option shall become exercisable
upon the occurrence of any of the
following events:
(i) All or substantially all of the
assets of the Company are sold,
exchanged or otherwise
transferred in one or more
transactions;
(ii) The Company is merged or
consolidated with or into another
corporation with the effect
that the common stockholders
immediately prior to such
merger or consolidation hold
less than 75% of the ordinary
voting power of the outstanding
securities of the surviving
corporation of such merger or
the corporation resulting from
such consolidation; or
1
(iii) A person or group (such as
term is used in rule 13d-5 under the
Securities and Exchange Act of
1934) shall, as a result of
the tender or exchange offer,
open market purchases, merger,
private placement or
otherwise, have become,
directly or indirectly, the
beneficial owner (within the
meaning of rule 13d-5 under
the Securities and Exchange
Act of 1934) or securities
having 15% or more of the
voting power of then
outstanding securities of the
Company, excluding the
issuance of securities in
connection with the conversion
of the Floating Rate
Convertible Subordinated Note
Due 1998 dated as of April 3,
1995 issued by the Company to
Computer Associates
International, Inc. and any
transactions related thereto.
(iv) The Board elects to expand its
membership to 9, or if 3 of its
existing members resign or are in
some way removed from the Board.
(v) The 2 Board members nominated by
Newport Acquisition Company No 2
LLC or its successors ("Newport")
vote the Newport shares.
(vi) Termination of the employee or
consultant by the Company for any
reason without cause.
Termination Period: Option may be exercised for a period
of 5 years after termination of
employment or consulting relationship
with the Company (but in no event later
than the Expiration Date).
By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the Nonstatutory Stock Option Agreement attached and
made a part of this document.
OPTIONEE: CENTURA SOFTWARE CORPORATION
By:
--------------------------------- -----------------------------------
Signature
Title:
--------------------------------- -----------------------------------
Print Name
2
CENTURA SOFTWARE CORPORATION
NONSTATUTORY STOCK OPTION AGREEMENT
1. GRANT OF OPTION. Centura Software Corporation, a California corporation
(the "COMPANY"), hereby grants to the Optionee named in the Notice of Stock
Option Grant attached to this Agreement ("OPTIONEE"), an option (the "OPTION")
to purchase the total number of shares of Common Stock (the "SHARES") set forth
in the Notice of Stock Option Grant, at the exercise price per share set forth
in the Notice of Stock Option Grant (the "EXERCISE PRICE") subject to the terms,
definitions and provisions of this Nonstatutory Stock Option Agreement (the
"Agreement").
This Option is intended to be a Nonstatutory Stock Option.
2. EXERCISE OF OPTION. This Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Stock Option Grant
as follows:
(a) RIGHT TO EXERCISE.
(i) This Option may not be exercised for a fraction of a share.
(ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed
by Sections 6, 7 and 8 below, subject to the limitations contained in
paragraph (iii) below.
(iii) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in the Notice of Stock
Option Grant.
(b) METHOD OF EXERCISE.
(i) This Option shall be exercisable by delivering to the Company a
written notice of exercise (in the form attached as EXHIBIT A) which
shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with
respect to such Shares of Common Stock as may be required by the Company.
Such written notice shall be signed by Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The written
notice shall be accompanied by payment of the Exercise Price. This Option
shall be deemed to be exercised upon receipt by the Company of such
written notice accompanied by the Exercise Price.
(ii) As a condition to the exercise of this Option, Optionee agrees
to make adequate provision for federal, state or other tax withholding
obligations, if any, which arise upon the exercise of the Option or
disposition of Shares, whether by withholding, direct payment to the
Company, or otherwise.
(iii) No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which
the Shares may then be listed. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to Optionee on the
date on which the Option is exercised with respect to such Shares.
3. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), at the time this
Option is exercised, Optionee shall, if required by the Company, concurrently
with the exercise of all or any portion of this Option, deliver to the Company
an investment representation statement in customary form, a copy of which is
available for Optionee's review from the Company upon request.
1
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of the
following, or a combination of the following, at the election of Optionee: (a)
cash; (b) check; (c) surrender of other Shares of Common Stock of the Company
that (i) either have been owned by Optionee for more than six (6) months on the
date of surrender or were not acquired, directly or indirectly, from the
Company, and (ii) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised; (d) authorization from the Company to retain from the total number of
Shares as to which the Option is exercised that number of Shares having a Fair
Market value on the date of exercise equal to the exercise price for the total
number of Shares as to which the Option is exercised; or (e) if there is a
public market for the Shares and they are registered under the Securities Act,
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds required to pay the exercise price.
5. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("REGULATION G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
6. TERMINATION OF RELATIONSHIP. In the event of termination of Optionee's
employment or consulting relationship with the Company, Optionee may, to the
extent otherwise so entitled at the date of such termination (the "TERMINATION
DATE"), exercise this Option during the Termination Period set out in the Notice
of Stock Option Grant. To the extent that Optionee was not entitled to exercise
this Option at the date of such termination, or if Optionee does not exercise
this Option within the time specified in the Notice of Stock Option Grant, the
Option shall terminate.
7. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 6
above, in the event of termination of Optionee's employment or consulting
relationship with the Company as a result of total and permanent disability (as
defined in Section 22(e)(3) of the Internal Revenue Code), Optionee may, but
only within five (5) years from the date of termination of such relationship
(but in no event later than the date of expiration of the term of this Option as
set forth in Section 10 below), exercise the Option to the extent otherwise so
entitled at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option (to the extent otherwise so entitled) within the time
specified in this Agreement, the Option shall terminate.
8. DEATH OF OPTIONEE. In the event of the death of Optionee:
(a) during the term of this Option and while an employee or consultant
of the Company and having been an employee or consultant of the Company
since the date of grant of the Option, the Option may be exercised, at any
time within five (5) years following the date of death (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 10 below), by Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, including by an
officer of High Technology Capital Management, but only to the
extent of the right to exercise that would have accrued had Optionee
continued living and remained as an employee of the Company three (3) months
after the date of death; or
(b) within thirty (30) days after the termination of Optionee's
employment or consulting relationship with the Company, the Option may be
exercised, at any time within five (5) years following the date of death
(but in no event later than the date of expiration of the term of this
Option as set forth in Section 10 below), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had
accrued at the date of termination.
2
9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution. The
designation of a beneficiary does not constitute a transfer. An Option may be
exercised during the lifetime of Optionee only by Optionee or a transferee
permitted by this section. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of Optionee.
10. TERM OF OPTION. This Option may be exercised only within the term set
out in the Notice of Stock Option Grant, and may be exercised during such term
only in accordance with the terms of this Option.
11. NO ADDITIONAL EMPLOYMENT RIGHTS. Optionee understands and agrees that
the vesting of Shares pursuant to the Vesting Schedule is earned only by
continuing as an employee or consultant of the Company at the will of the
Company (not through the act of being hired, being granted this Option or
acquiring Shares under this Agreement). Optionee further acknowledges and agrees
that nothing in this Agreement shall confer upon Optionee any right with respect
to continuation as an employee or consultant of the Company, nor shall it
interfere in any way with his or her right or the Company's right to terminate
his or her employment or consulting relationship at any time, with or without
cause.
12. TAX CONSEQUENCES. Optionee acknowledges that he or she has read the
brief summary set forth below of certain federal tax consequences of exercise of
this Option and disposition of the Shares under the law in effect as of the date
of grant. OPTIONEE UNDERSTANDS THAT THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT HIS
OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) EXERCISE OF NONSTATUTORY STOCK OPTION. Optionee may incur regular
federal income tax liability upon the exercise of the Option. Optionee will
be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value of
the Shares on the date of exercise over the Exercise Price. In addition, if
Optionee is an employee of the Company, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to
the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(b) DISPOSITION OF SHARES. Gain realized on the disposition of Shares
will be treated as long-term or short-term capital gain depending on whether
or not the disposition occurs more than one year after the exercise date.
13. SIGNATURE. This Stock Option Agreement shall be deemed executed by the
Company and Optionee upon execution by such parties of the Notice of Stock
Option Grant attached to this Stock Option Agreement.
[REMAINDER OF XXXX LEFT INTENTIONALLY BLANK]
3
EXHIBIT A
NOTICE OF EXERCISE
To: Centura Software Corporation
Attn: Stock Option Administrator
Subject: Notice of Intention to Exercise Nonstatutory Stock
Option
----------------------------------------------------
This is official notice that the undersigned ("OPTIONEE") intends to
exercise Optionee's option to purchase shares of Centura Software
Corporation Common Stock, under and pursuant to the Nonstatutory Stock Option
Agreement dated , as follows:
Grant Number:
------------------------------------------------
Date of Purchase:
------------------------------------------------
Number of Shares:
------------------------------------------------
Purchase Price:
------------------------------------------------
Method of Payment
of Purchase Price:
------------------------------------------------
Social Security
No.:
------------------------------------------------
The shares should be issued as follows:
Name:
------------------------------------------------
Address:
------------------------------------------------
------------------------------------------------
------------------------------------------------
Signed:
------------------------------------------------
Date:
------------------------------------------------
CENTURA SOFTWARE CORPORATION
NOTICE OF NONSTATUTORY STOCK OPTION GRANT
Optionee's Name and Address:
Xxxx Xxxxxx
Centura Software Corporation
000 Xxxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
You have been granted an option to purchase Common Stock of Centura Software
Corporation (the "Company"), as follows:
Board Approval Date: November 6, 1997
-------------------------------------
Date of Grant (Later of Board
Approval Date or Commencement of
Employment/ Consulting): November 6, 1997
-------------------------------------
Exercise Price Per Share: $1.906
-------------------------------------
Total Number of Shares Granted: 375,000
-------------------------------------
Total Price of Shares Granted: $714,750.00
-------------------------------------
Term/Expiration Date: November 5, 2007
-------------------------------------
Vesting Commencement Date: November 5, 1997
-------------------------------------
Vesting Schedule: 25% of the shares subject to the
option shall be exercisable as of
the Vesting Commencement Date and
thereafter 25% of the shares subject
to the option shall become exercisable
on each subsequent six month anniversary
of the Vesting Commencement Date as
follows: an additional 25% of the shares
become exercisable on May 5, 1998, an
additional 25% of the shares become
exercisable on November 5, 1998 and and
additional 25% of the shares become
exercisable on May 5, 1999; provided,
however, that 100% of the shares
subject to the option shall become
exercisable upon the occurrence of
any of the following events:
(i) All or substantially all of the
assets of the Company are sold,
exchanged or otherwise
transferred in one or more
transactions;
(ii) The Company is merged or
consolidated with or into another
corporation with the effect
that the common stockholders
immediately prior to such
merger or consolidation hold
less than 75% of the ordinary
voting power of the outstanding
securities of the surviving
corporation of such merger or
the corporation resulting from
such consolidation; or
1
(iii) A person or group (such as
term is used in rule 13d-5 under the
Securities and Exchange Act of
1934) shall, as a result of
the tender or exchange offer,
open market purchases, merger,
private placement or
otherwise, have become,
directly or indirectly, the
beneficial owner (within the
meaning of rule 13d-5 under
the Securities and Exchange
Act of 1934) or securities
having 15% or more of the
voting power of then
outstanding securities of the
Company, excluding the
issuance of securities in
connection with the conversion
of the Floating Rate
Convertible Subordinated Note
Due 1998 dated as of April 3,
1995 issued by the Company to
Computer Associates
International, Inc. and any
transactions related thereto.
(iv) The Board elects to expand its
membership to 9, or if 3 of its
existing members resign or are in
some way removed from the Board.
(v) The 2 Board members nominated by
Newport Acquisition Company No 2
LLC or its successors ("Newport")
vote the Newport shares.
(vi) Termination of the employee or
consultant by the Company for any
reason without cause.
Termination Period: Option may be exercised for a period
of 5 years after termination of
employment or consulting relationship
with the Company (but in no event later
than the Expiration Date).
By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the Nonstatutory Stock Option Agreement attached and
made a part of this document.
OPTIONEE: CENTURA SOFTWARE CORPORATION
By:
--------------------------------- -----------------------------------
Signature
Title:
--------------------------------- -----------------------------------
Print Name
2
CENTURA SOFTWARE CORPORATION
NONSTATUTORY STOCK OPTION AGREEMENT
1. GRANT OF OPTION. Centura Software Corporation, a California corporation
(the "COMPANY"), hereby grants to the Optionee named in the Notice of Stock
Option Grant attached to this Agreement ("OPTIONEE"), an option (the "OPTION")
to purchase the total number of shares of Common Stock (the "SHARES") set forth
in the Notice of Stock Option Grant, at the exercise price per share set forth
in the Notice of Stock Option Grant (the "EXERCISE PRICE") subject to the terms,
definitions and provisions of this Nonstatutory Stock Option Agreement (the
"Agreement").
This Option is intended to be a Nonstatutory Stock Option.
2. EXERCISE OF OPTION. This Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Stock Option Grant
as follows:
(a) RIGHT TO EXERCISE.
(i) This Option may not be exercised for a fraction of a share.
(ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed
by Sections 6, 7 and 8 below, subject to the limitations contained in
paragraph (iii) below.
(iii) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in the Notice of Stock
Option Grant.
(b) METHOD OF EXERCISE.
(i) This Option shall be exercisable by delivering to the Company a
written notice of exercise (in the form attached as EXHIBIT A) which
shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with
respect to such Shares of Common Stock as may be required by the Company.
Such written notice shall be signed by Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The written
notice shall be accompanied by payment of the Exercise Price. This Option
shall be deemed to be exercised upon receipt by the Company of such
written notice accompanied by the Exercise Price.
(ii) As a condition to the exercise of this Option, Optionee agrees
to make adequate provision for federal, state or other tax withholding
obligations, if any, which arise upon the exercise of the Option or
disposition of Shares, whether by withholding, direct payment to the
Company, or otherwise.
(iii) No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which
the Shares may then be listed. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to Optionee on the
date on which the Option is exercised with respect to such Shares.
3. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), at the time this
Option is exercised, Optionee shall, if required by the Company, concurrently
with the exercise of all or any portion of this Option, deliver to the Company
an investment representation statement in customary form, a copy of which is
available for Optionee's review from the Company upon request.
1
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of the
following, or a combination of the following, at the election of Optionee: (a)
cash; (b) check; (c) surrender of other Shares of Common Stock of the Company
that (i) either have been owned by Optionee for more than six (6) months on the
date of surrender or were not acquired, directly or indirectly, from the
Company, and (ii) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised; (d) authorization from the Company to retain from the total number of
Shares as to which the Option is exercised that number of Shares having a Fair
Market value on the date of exercise equal to the exercise price for the total
number of Shares as to which the Option is exercised; or (e) if there is a
public market for the Shares and they are registered under the Securities Act,
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds required to pay the exercise price.
5. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("REGULATION G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
6. TERMINATION OF RELATIONSHIP. In the event of termination of Optionee's
employment or consulting relationship with the Company, Optionee may, to the
extent otherwise so entitled at the date of such termination (the "TERMINATION
DATE"), exercise this Option during the Termination Period set out in the Notice
of Stock Option Grant. To the extent that Optionee was not entitled to exercise
this Option at the date of such termination, or if Optionee does not exercise
this Option within the time specified in the Notice of Stock Option Grant, the
Option shall terminate.
7. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 6
above, in the event of termination of Optionee's employment or consulting
relationship with the Company as a result of total and permanent disability (as
defined in Section 22(e)(3) of the Internal Revenue Code), Optionee may, but
only within five (5) years from the date of termination of such relationship
(but in no event later than the date of expiration of the term of this Option as
set forth in Section 10 below), exercise the Option to the extent otherwise so
entitled at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option (to the extent otherwise so entitled) within the time
specified in this Agreement, the Option shall terminate.
8. DEATH OF OPTIONEE. In the event of the death of Optionee:
(a) during the term of this Option and while an employee or consultant
of the Company and having been an employee or consultant of the Company
since the date of grant of the Option, the Option may be exercised, at any
time within five (5) years following the date of death (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 10 below), by Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that would have accrued had Optionee
continued living and remained as an employee of the Company three (3) months
after the date of death; or
(b) within thirty (30) days after the termination of Optionee's
employment or consulting relationship with the Company, the Option may be
exercised, at any time within five (5) years following the date of death
(but in no event later than the date of expiration of the term of this
Option as set forth in Section 10 below), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had
accrued at the date of termination.
2
9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution. The
designation of a beneficiary does not constitute a transfer. An Option may be
exercised during the lifetime of Optionee only by Optionee or a transferee
permitted by this section. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of Optionee.
10. TERM OF OPTION. This Option may be exercised only within the term set
out in the Notice of Stock Option Grant, and may be exercised during such term
only in accordance with the terms of this Option.
11. NO ADDITIONAL EMPLOYMENT RIGHTS. Optionee understands and agrees that
the vesting of Shares pursuant to the Vesting Schedule is earned only by
continuing as an employee or consultant of the Company at the will of the
Company (not through the act of being hired, being granted this Option or
acquiring Shares under this Agreement). Optionee further acknowledges and agrees
that nothing in this Agreement shall confer upon Optionee any right with respect
to continuation as an employee or consultant of the Company, nor shall it
interfere in any way with his or her right or the Company's right to terminate
his or her employment or consulting relationship at any time, with or without
cause.
12. TAX CONSEQUENCES. Optionee acknowledges that he or she has read the
brief summary set forth below of certain federal tax consequences of exercise of
this Option and disposition of the Shares under the law in effect as of the date
of grant. OPTIONEE UNDERSTANDS THAT THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT HIS
OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) EXERCISE OF NONSTATUTORY STOCK OPTION. Optionee may incur regular
federal income tax liability upon the exercise of the Option. Optionee will
be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value of
the Shares on the date of exercise over the Exercise Price. In addition, if
Optionee is an employee of the Company, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to
the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(b) DISPOSITION OF SHARES. Gain realized on the disposition of Shares
will be treated as long-term or short-term capital gain depending on whether
or not the disposition occurs more than one year after the exercise date.
13. SIGNATURE. This Stock Option Agreement shall be deemed executed by the
Company and Optionee upon execution by such parties of the Notice of Stock
Option Grant attached to this Stock Option Agreement.
[REMAINDER OF XXXX LEFT INTENTIONALLY BLANK]
3
EXHIBIT A
NOTICE OF EXERCISE
To: Centura Software Corporation
Attn: Stock Option Administrator
Subject: Notice of Intention to Exercise Nonstatutory Stock
Option
----------------------------------------------------
This is official notice that the undersigned ("OPTIONEE") intends to
exercise Optionee's option to purchase shares of Centura Software
Corporation Common Stock, under and pursuant to the Nonstatutory Stock Option
Agreement dated , as follows:
Grant Number:
------------------------------------------------
Date of Purchase:
------------------------------------------------
Number of Shares:
------------------------------------------------
Purchase Price:
------------------------------------------------
Method of Payment
of Purchase Price:
------------------------------------------------
Social Security
No.:
------------------------------------------------
The shares should be issued as follows:
Name:
------------------------------------------------
Address:
------------------------------------------------
------------------------------------------------
------------------------------------------------
Signed:
------------------------------------------------
Date:
------------------------------------------------
CENTURA SOFTWARE CORPORATION
NOTICE OF NONSTATUTORY STOCK OPTION GRANT
Optionee's Name and Address:
Xxxxx Xxxx
Centura Software Corporation
000 Xxxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
You have been granted an option to purchase Common Stock of Centura Software
Corporation (the "Company"), as follows:
Board Approval Date: November 6, 1997
-------------------------------------
Date of Grant (Later of Board
Approval Date or Commencement of
Employment/ Consulting): November 6, 1997
-------------------------------------
Exercise Price Per Share: $1.906
-------------------------------------
Total Number of Shares Granted: 375,000
-------------------------------------
Total Price of Shares Granted: $714,750.00
-------------------------------------
Term/Expiration Date: November 5, 2007
-------------------------------------
Vesting Commencement Date: November 5, 1997
-------------------------------------
Vesting Schedule: 25% of the shares subject to the
option shall be exercisable as of
the Vesting Commencement Date and
thereafter 25% of the shares subject
to the option shall become exercisable
on each subsequent six month anniversary
of the Vesting Commencement Date as
follows: an additional 25% of the shares
become exercisable on May 5, 1998, an
additional 25% of the shares become
exercisable on November 5, 1998 and and
additional 25% of the shares become
exercisable on May 5, 1999; provided,
however, that 100% of the shares
subject to the option shall become
exercisable upon the occurrence of
any of the following events:
(i) All or substantially all of the
assets of the Company are sold,
exchanged or otherwise
transferred in one or more
transactions;
(ii) The Company is merged or
consolidated with or into another
corporation with the effect
that the common stockholders
immediately prior to such
merger or consolidation hold
less than 75% of the ordinary
voting power of the outstanding
securities of the surviving
corporation of such merger or
the corporation resulting from
such consolidation; or
1
(iii) A person or group (such as
term is used in rule 13d-5 under the
Securities and Exchange Act of
1934) shall, as a result of
the tender or exchange offer,
open market purchases, merger,
private placement or
otherwise, have become,
directly or indirectly, the
beneficial owner (within the
meaning of rule 13d-5 under
the Securities and Exchange
Act of 1934) or securities
having 15% or more of the
voting power of then
outstanding securities of the
Company, excluding the
issuance of securities in
connection with the conversion
of the Floating Rate
Convertible Subordinated Note
Due 1998 dated as of April 3,
1995 issued by the Company to
Computer Associates
International, Inc. and any
transactions related thereto.
(iv) The Board elects to expand its
membership to 9, or if 3 of its
existing members resign or are in
some way removed from the Board.
(v) The 2 Board members nominated by
Newport Acquisition Company No 2
LLC or its successors ("Newport")
vote the Newport shares.
(vi) Termination of the employee or
consultant by the Company for any
reason without cause.
Termination Period: Option may be exercised for a period
of five (5) years after termination of
employment or consulting relationship
with the Company (but in no event later
than the Expiration Date).
By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the Nonstatutory Stock Option Agreement attached and
made a part of this document.
OPTIONEE: CENTURA SOFTWARE CORPORATION
By:
--------------------------------- -----------------------------------
Signature
Title:
--------------------------------- -----------------------------------
Print Name
2
CENTURA SOFTWARE CORPORATION
NONSTATUTORY STOCK OPTION AGREEMENT
1. GRANT OF OPTION. Centura Software Corporation, a California corporation
(the "COMPANY"), hereby grants to the Optionee named in the Notice of Stock
Option Grant attached to this Agreement ("OPTIONEE"), an option (the "OPTION")
to purchase the total number of shares of Common Stock (the "SHARES") set forth
in the Notice of Stock Option Grant, at the exercise price per share set forth
in the Notice of Stock Option Grant (the "EXERCISE PRICE") subject to the terms,
definitions and provisions of this Nonstatutory Stock Option Agreement (the
"Agreement").
This Option is intended to be a Nonstatutory Stock Option.
2. EXERCISE OF OPTION. This Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Stock Option Grant
as follows:
(a) RIGHT TO EXERCISE.
(i) This Option may not be exercised for a fraction of a share.
(ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed
by Sections 6, 7 and 8 below, subject to the limitations contained in
paragraph (iii) below.
(iii) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in the Notice of Stock
Option Grant.
(b) METHOD OF EXERCISE.
(i) This Option shall be exercisable by delivering to the Company a
written notice of exercise (in the form attached as EXHIBIT A) which
shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with
respect to such Shares of Common Stock as may be required by the Company.
Such written notice shall be signed by Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The written
notice shall be accompanied by payment of the Exercise Price. This Option
shall be deemed to be exercised upon receipt by the Company of such
written notice accompanied by the Exercise Price.
(ii) As a condition to the exercise of this Option, Optionee agrees
to make adequate provision for federal, state or other tax withholding
obligations, if any, which arise upon the exercise of the Option or
disposition of Shares, whether by withholding, direct payment to the
Company, or otherwise.
(iii) No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which
the Shares may then be listed. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to Optionee on the
date on which the Option is exercised with respect to such Shares.
3. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), at the time this
Option is exercised, Optionee shall, if required by the Company, concurrently
with the exercise of all or any portion of this Option, deliver to the Company
an investment representation statement in customary form, a copy of which is
available for Optionee's review from the Company upon request.
1
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of the
following, or a combination of the following, at the election of Optionee: (a)
cash; (b) check; (c) surrender of other Shares of Common Stock of the Company
that (i) either have been owned by Optionee for more than six (6) months on the
date of surrender or were not acquired, directly or indirectly, from the
Company, and (ii) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised; (d) authorization from the Company to retain from the total number of
Shares as to which the Option is exercised that number of Shares having a Fair
Market value on the date of exercise equal to the exercise price for the total
number of Shares as to which the Option is exercised; or (e) if there is a
public market for the Shares and they are registered under the Securities Act,
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds required to pay the exercise price.
5. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("REGULATION G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
6. TERMINATION OF RELATIONSHIP. In the event of termination of Optionee's
employment or consulting relationship with the Company, Optionee may, to the
extent otherwise so entitled at the date of such termination (the "TERMINATION
DATE"), exercise this Option during the Termination Period set out in the Notice
of Stock Option Grant. To the extent that Optionee was not entitled to exercise
this Option at the date of such termination, or if Optionee does not exercise
this Option within the time specified in the Notice of Stock Option Grant, the
Option shall terminate.
7. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 6
above, in the event of termination of Optionee's employment or consulting
relationship with the Company as a result of total and permanent disability (as
defined in Section 22(e)(3) of the Internal Revenue Code), Optionee may, but
only within five (5) years from the date of termination of such relationship
(but in no event later than the date of expiration of the term of this Option as
set forth in Section 10 below), exercise the Option to the extent otherwise so
entitled at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option (to the extent otherwise so entitled) within the time
specified in this Agreement, the Option shall terminate.
8. DEATH OF OPTIONEE. In the event of the death of Optionee:
(a) during the term of this Option and while an employee or consultant
of the Company and having been an employee or consultant of the Company
since the date of grant of the Option, the Option may be exercised, at any
time within five (5) years following the date of death (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 10 below), by Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that would have accrued had Optionee
continued living and remained as an employee of the Company three (3) months
after the date of death; or
(b) within thirty (30) days after the termination of Optionee's
employment or consulting relationship with the Company, the Option may be
exercised, at any time within five (5) years following the date of death
(but in no event later than the date of expiration of the term of this
Option as set forth in Section 10 below), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had
accrued at the date of termination.
2
9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution. The
designation of a beneficiary does not constitute a transfer. An Option may be
exercised during the lifetime of Optionee only by Optionee or a transferee
permitted by this section. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of Optionee.
10. TERM OF OPTION. This Option may be exercised only within the term set
out in the Notice of Stock Option Grant, and may be exercised during such term
only in accordance with the terms of this Option.
11. NO ADDITIONAL EMPLOYMENT RIGHTS. Optionee understands and agrees that
the vesting of Shares pursuant to the Vesting Schedule is earned only by
continuing as an employee or consultant of the Company at the will of the
Company (not through the act of being hired, being granted this Option or
acquiring Shares under this Agreement). Optionee further acknowledges and agrees
that nothing in this Agreement shall confer upon Optionee any right with respect
to continuation as an employee or consultant of the Company, nor shall it
interfere in any way with his or her right or the Company's right to terminate
his or her employment or consulting relationship at any time, with or without
cause.
12. TAX CONSEQUENCES. Optionee acknowledges that he or she has read the
brief summary set forth below of certain federal tax consequences of exercise of
this Option and disposition of the Shares under the law in effect as of the date
of grant. OPTIONEE UNDERSTANDS THAT THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT HIS
OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) EXERCISE OF NONSTATUTORY STOCK OPTION. Optionee may incur regular
federal income tax liability upon the exercise of the Option. Optionee will
be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value of
the Shares on the date of exercise over the Exercise Price. In addition, if
Optionee is an employee of the Company, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to
the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(b) DISPOSITION OF SHARES. Gain realized on the disposition of Shares
will be treated as long-term or short-term capital gain depending on whether
or not the disposition occurs more than one year after the exercise date.
13. SIGNATURE. This Stock Option Agreement shall be deemed executed by the
Company and Optionee upon execution by such parties of the Notice of Stock
Option Grant attached to this Stock Option Agreement.
[REMAINDER OF XXXX LEFT INTENTIONALLY BLANK]
3
EXHIBIT A
NOTICE OF EXERCISE
To: Centura Software Corporation
Attn: Stock Option Administrator
Subject: Notice of Intention to Exercise Nonstatutory Stock
Option
----------------------------------------------------
This is official notice that the undersigned ("OPTIONEE") intends to
exercise Optionee's option to purchase shares of Centura Software
Corporation Common Stock, under and pursuant to the Nonstatutory Stock Option
Agreement dated , as follows:
Grant Number:
------------------------------------------------
Date of Purchase:
------------------------------------------------
Number of Shares:
------------------------------------------------
Purchase Price:
------------------------------------------------
Method of Payment
of Purchase Price:
------------------------------------------------
Social Security
No.:
------------------------------------------------
The shares should be issued as follows:
Name:
------------------------------------------------
Address:
------------------------------------------------
------------------------------------------------
------------------------------------------------
Signed:
------------------------------------------------
Date:
------------------------------------------------
