exv10w2



 







EXHIBIT 10.2




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
Jeffrey Kraatz (the “Optionee”) and Keynote Systems, Inc. (the “Company”) is
entered into by and between Optionee and the Company as of April 1, 2006.



WITNESSETH



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\ Umang Gupta
 

	 	 
	 	\s\ Jeffrey Kraatz
 

(Signature)
	 	 
	 
	 	 	 	 	 	 	 	 
	Umang Gupta	 	 	 	Jeffrey Kraatz	 	 
	 	 	 	 	 	 	 
	(Please print name)	 	 	 	(Please print name)	 	 
	 
	 	 	 	 	 	 	 	 
	CEO	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(Please print title)	 	 	 	 	 	 







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