Document:

exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of February 26,
2008 (the “Effective Date”), by and among Peerless Systems Corporation
(“Peerless”), T1 Delaware Corporation, a Delaware corporation and wholly owned subsidiary
of Peerless (the “Company”), and Andrew Lombard (“Executive”).

     WHEREAS, the Company desires to employ Executive, and Executive is willing to be employed by
the Company, in each case on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein,
Peerless, the Company and Executive agree as follows:

1. TERM

     The term of this Agreement shall commence on the Effective Date, and shall continue as long as
the Executive is employed by the Company.

2. POSITION

     As of the Effective Date, Executive shall be employed by the Company as its President.
Executive shall report directly to the Chief Executive Officer of the Company, and at any time
there is no Chief Executive Officer, to the Board of Directors of the Company (the
“Board”).

3. COMPENSATION

     3.1 Base Compensation.

	 	(a)	 	Executive shall be paid a salary at the annual rate of $225,000 (the “Base
Compensation”) during the Term, in accordance with the Company’s normal payroll
practices. The Base Compensation shall be subject to a potential increase of $25,000
at the end of each fiscal quarter during the fiscal year ending January 31, 2009, based
on the achievement of the Performance Milestones set forth on Exhibit B hereto and
otherwise subject to the terms and conditions listed therein (the “Performance
Milestones”).
	 
	 	(b)	 	The determination as to achievement of Performance Milestones and any increase
in the base salary at the conclusion of each quarter shall be made solely and in good
faith by the Chief Executive Officer of the Company, and at any time there is no Chief
Executive Officer, by the Board of Directors of the Company (the “Board”). Any
such determination further requires the formal approval of the Compensation Committee
and Board of Directors of Peerless. The Executive shall be notified of the
determination in writing within thirty (30) business days subsequent to the last day of
the previous fiscal quarter.

 

 

     3.2 Incentive Compensation.

(a)
In addition to the Base Compensation set forth in Section 3.1 above,
Executive shall be eligible for bonus compensation of up to $25,000
per quarter during the fiscal year ending January 31, 2009 based on the achievement of
the Performance Milestones.

(b) At the end of any fiscal year of employment ending thirty (30) days subsequent to
the last day of that fiscal year the Company shall set new Performance Milestones and bonus
amounts for the subsequent fiscal year after consultation with the Executive. The final
determination of the new Performance Milestones, bonus amounts, qualification criteria, and
payment terms shall be at the sole and good faith discretion of the Chief Executive Officer
of the Company, and at any time there is no Chief Executive Officer, by the Board of
Directors of the Company (the “Board”). Any such determination further requires the
formal approval of the Compensation Committee and Board of Directors of Peerless. The
Executive shall be notified of the determination in writing within sixty (60) business days
subsequent to the last day of the previous fiscal year.

(c) Any quarterly bonus payable during the first year of this Agreement hereunder shall
be paid as herein defined during the first year of the Agreement after determination by the
Chief Executive Officer of the Company, and at any time there is no Chief Executive Officer,
by the Board of Directors of the Company (the “Board”) that the Performance
Milestones were achieved and that a bonus is payable. Any such determination further
requires the formal approval of the Compensation Committee and Board of Directors of
Peerless. The Executive shall be notified of the determination in writing within thirty
(30) business days subsequent to the last day of the previous fiscal quarter.

(d) Any bonus payable during subsequent years shall be paid after determination by the Chief
Executive Officer of the Company, and at any time there is no Chief Executive Officer, by
the Board of Directors of the Company (the “Board”) that the assigned Performance Milestones
were achieved and that a bonus is payable. Any such determination further requires the
formal approval of the Compensation Committee and Board of Directors of Peerless. The
Executive shall be notified of the determination in writing within thirty (30) business days
subsequent to the last day of the specific bonus period.

     3.3 Equity.

     (a) The Compensation Committee of the Board of Directors of Peerless has granted
Executive Incentive Stock Options to purchase 200,000 shares of common stock of Peerless
under the terms and conditions set forth in that certain Stock Option Agreement executed by
Peerless and Executive on January 10, 2008, which shares are registered on a Form S-8
Registration Statement filed with the Securities and Exchange Commission on November 2,
2005. The Stock Option Agreement is incorporated herein by reference.

 

 

     (b) Concurrently with the execution of this Agreement, Executive shall have the right
to purchase at Fair Market Value (FMV) restricted shares of common stock of the Company
equal to 8% of the total outstanding shares of capital stock of the Company on the date
hereof, under the terms and conditions set forth in that certain Restricted Stock and
Repurchase Agreement executed by the Company and Executive concurrently with this Agreement.
Fair Market Value (FMV) shall be determined and approved by the Compensation Committee and
Board of Directors of Peerless. The Executive shall be notified of the FMV, in writing,
within ten (10) business days subsequent to the first Board Meeting following the effective
date of this Agreement. Executive shall have the subsequent thirty (30) days from this
written notice to present his check to the Company for the purchase of the stock.

The Restricted Stock Purchase Agreement dated February 26, 2008 is incorporated herein by
reference.

     3.4 Benefits. Executive shall be entitled to participate in any 401(k) and other employee
plans and benefits of Peerless, including without limitation, medical, dental, vision, disability
and life insurance plans, in accordance with the terms of such plans or policies as they may be in
effect from time to time, on the same basis as other executive-level employees of Peerless.
Additionally, Peerless shall obtain and maintain one or more life insurance policies of the type of
policy as decided by the Company and Peerless on the life of the Executive with an aggregate death
benefit of $225,000, with beneficiaries as designated by the Executive. Executive shall submit to
any application process, including medical testing, requested by Peerless or any applicable
insurance provider. Should Executive not qualify for any such policies by reason of any medical
condition then the Company and Peerless shall have no further obligation to provide such insurance
to the Executive.

     3.5 Method of Payment. The monetary compensation payable and any benefits due to
Executive hereunder may be paid or provided in whole or in part, from time to time, by the Company
and/or its respective parents, subsidiaries and affiliates. Peerless shall be jointly and
severally liable hereunder for payment of Executive’s compensation, (including, but not limited to,
bonuses and severance) as and when due.

     3.6 Vacation. In addition to national and state designated holidays observed by the
Company, Executive shall be entitled to four (4) weeks vacation per calendar year, with full pay to
Executive, which shall accrue ratably during each calendar year of employment. Executive’s
vacation shall be taken and expire in accordance with and shall be subject to the terms of the
plans and policies in effect generally as to other senior executives of the Company.

     3.7 Business Expenses. Executive shall be entitled to reimbursement of reasonable
business expenses in accordance with Company policies, as they may be in effect from time to time.
The submission of such business expenses to the CEO or the Board is expected within two (2) working
weeks of incurrence.

 

 

4. DUTIES

     4.1 Executive Roles.

Executive shall perform all services appropriate to and consistent with his position as President
and any other appropriate services, such as Corporate Business Development activities for Peerless,
as may be assigned by the Chief Executive Officer of the Company from time to time, and in the
absence of a Chief Executive Officer, by the Board of Directors of the company and/or Peerless.
Executive, in such capacities, shall faithfully perform for the Company the duties of said office.
Executive shall devote 100% (except as provided below) of his time and effort during the normal
work week to the performance of his duties hereunder, and shall perform his duties with the good
faith and integrity and shall promote the interests of the Company at all times.

     4.2 Other Activity.

(a) During Executive’s employment, the Executive may continue current investment and/or business
and/or charitable activities provided they do not require in-person engagement without the Chief
Executive Officer’s prior consent, whether or not for pecuniary advantage, and so long as such
other activities (A) do not interfere with the business of the Company or any Related Entity (B) do
not materially interfere with the performance of his duties to the Company, (C) are not competitive
with the Company or any Related Entity and (D) do not create a conflict of interest with the
Company or any Related Entity. “Related Entity” means Peerless and all entities that are
controlled affiliates of Peerless.

However, in the event that Executive should have any infrequent, unscheduled or informal meeting
related to non-Company business at the Company location, such in-person engagement shall not be a
breach of this Section or require the Chief Executive Officer’s prior consent.

(b) The Company acknowledges and agrees that Executive does have these additional interests to
which he will continue to devote time and effort. The parties agree that those interests, if
conducted in accordance with the provisions of Section 4.2(a), do not interfere or conflict with
Executive’s duties hereunder and include providing services, including the provision of advisory,
and consulting services (in each case, as an independent contractor) and participation at the board
of directors level with companies engaged in internet, communications media, telecommunications,
medical services and sports sales and marketing of instructional and self help guides and videos,
to which he may continue to devote time and effort. Executive may make, from time to time, personal
phone calls and personal e-mails during the normal work week provided it does not conflict (A),
(B), (C), and/or (D) above.

(c) Exhibit C is the list of Executive’s current investment and/or business and/or charitable
activities. No further activities shall be agreed to or incurred by Executive without the prior
written consent of the Chief Executive of the Company.

     4.3 Representations. Executive represents and warrants that his execution of this
Agreement, and the performance of his duties under this Agreement do not violate any obligations
the Executive may have to any other person or entity, including any obligations with respect to
proprietary or confidential information of any other person or entity.

 

 

5. TERMINATION

     5.1 Due to Death. Executive’s employment shall terminate as of the date of his death.

     5.2 Due to Disability. The Company may terminate Executive’s employment if he
experiences a Disability, as defined below, upon thirty (30) days’ written notice to Executive.
For purposes of this Agreement, the term “Disability” shall mean a physical or mental
incapacity as a result of which Executive becomes unable to continue to perform the essential
functions of his job with or without accommodation hereunder for three (3) consecutive calendar
months or for shorter periods aggregating sixty (60) business days in any twelve month period, or,
if this provision is inconsistent with any applicable law, to the extent not prohibited by law.

     5.3 By the Company Without “Cause”. The Company may terminate Executive’s employment
without “Cause”, “Cause” as defined in Section 5.5 below, at any time upon thirty (30) days’
written notice to Executive.

     5.4 By Executive Without “Good Reason”. Executive may terminate his employment
hereunder without Good Reason, as defined in Section 5.6 below, at any time upon thirty (30) days’
written notice to the Company.

     5.5 By The Company For “Cause”. The Company may terminate Executive’s
Executive’s employment for “Cause”. Not less than thirty (30) days prior to the
date of termination, Executive shall be notified in writing of the Company’s intention to
terminate, the grounds for doing so and the date of the termination. The notice shall specify a
date within thirty (30) days of the notice on which Executive shall have an opportunity to address
the Board as to the grounds for termination. The Company may relieve Executive of his duties
between the date of the notice and the proposed date of termination provided Executive’s
compensation and benefits remain in force during that time, and such action shall not constitute
“Good Reason” for Executive to terminate under Section 5.6. For purposes of this Agreement,
“Cause” shall mean the Board’s reasonable determination that one or more of the following
conditions exist:

(a) Executive has been convicted of or pled guilty or nolo contendere to any felony or one or more
acts of theft, embezzlement, or misappropriation against the Company or any Related Entity;

(b) Executive has materially breached his obligations under this Agreement, including without
limitation those of Sections 4, 6 and 7, which breach, if curable, has not been cured within thirty
(30) days following receipt of written notice by the Company to Executive of such breach by
Executive; or

(c) If Executive fails, in the sole and good faith discretion of the Chief Executive Officer, to
achieve one or more of the assigned Performance Milestones in each of two consecutive quarters, by
the applicable Deadlines as set forth in Exhibit B.

 

 

     5.6 By Executive For “Good Reason.”

     Executive may terminate his employment for good reason upon at least thirty (30) days prior
written notice to the Company. For purposes of this Agreement, “Good Reason” shall mean:

     (a) the Company’s material breach of the salary and benefit obligations hereunder, and either
such breach is incurable or, if curable, has not been cured within fifteen (15) days following
receipt of written notice by Executive to the Company of such breach by the Company,

     (b) the Company requests a relocation of Executive’s primary place of business more than
fifty miles,

     (c) the assignment to Executive of any substantial and material duties inconsistent with his
status or position with the Company, or any unreasonable action by the Company that results in a
substantial diminution in such Executive’s status or position, or

     (d) a reduction of Executive’s Base Compensation unless all senior executives of the Company
and Peerless are reduced an equivalent percentage amount.

     5.7 Severance Payment.

     (a) The “Effective Date of Termination” shall be the date of Executive’s Death for a
termination under Section 5.1, and the date specified in the written notice of termination for a
termination under Sections 5.2, 5.3, 5.4, 5.5 or 5.6.

     (b) In the event Executive’s employment terminates pursuant to Sections 5.4 (Without Good
Reason) or 5.5 (For Cause), Executive, if requested and able to do so, shall continue to render
services to the Company pursuant to this Agreement until the Effective Date of Termination, and
Executive shall continue to receive Executive’s Base Compensation and benefits as otherwise
provided under this Agreement through the Effective Date of Termination. In the event Executive’s
employment terminates pursuant to Sections 5.1 (Death), 5.2 (Disability), 5.4 (Without Good Reason)
or 5.5 (For Cause), after the Effective Date of Termination, Executive shall have no further right
to receive compensation, benefits, continuation of vesting of options, vesting removal of
repurchase provisions of the Restricted Stock and Repurchase Agreement, or any other consideration
from the Company, and Executive shall not be entitled to any severance payments or benefits as to
the Company’s welfare benefit plans.

     (c) In
the event that Executive’s employment is terminated pursuant to Section 5.3
(Without Cause) or Section 5.6 (For Good Reason), in addition to other compensation payable to
Executive for services rendered through the Effective Date of Termination, the Company shall pay
Executive, in regular payroll installments in accordance with the Company’s normal payroll
practices, the amount of six (6) months of Executive’s Base Compensation and payment of
contributions required to maintain continued health coverage under COBRA for a period of twelve
(12) months from the Effective Date of Termination (the “Severance Amount”);

 

 

provided, however, in the event that such termination occurs following a “Change in Control”
and constitutes a “Covered Termination” (as such terms are defined in that certain Change in
Control Severance Agreement executed by Peerless and Executive concurrently with this Agreement and
incorporated herein by reference), then Executive shall be entitled to receive (in lieu of the
Severance Amount and benefits provided herein) the severance payment and benefits provided in such
Change in Control Severance Agreement pursuant to the terms and conditions set forth therein.

     (d) Notwithstanding anything in this Agreement to the contrary, (i) the Company shall have no
obligation to pay the Severance Amount unless on or after the date of “separation from service,”
within the meaning of Section 409A(a)(2)(A)(i) (“Code Section 409A”) of the Internal
Revenue Code of 1986, as amended (“Separation from Service”), Executive executes and
delivers to the Company a full general release of claims (excluding claims for amounts payable
under this Agreement), as attached hereto as Exhibit A (the “General Release”), against the
Company and the Related Entities and their respective officers, directors, employees and agents
dated as of the Effective Date of Termination, (ii) Upon receipt of the General Release, the
Company shall pay the Severance Amount and provide any benefits as herein agreed beginning on the
tenth (10th) business day following the effective date of the General Release , and
(iii) the Severance Amount and all other obligations of the Company and Peerless shall be
extinguished if such General Release is not executed and delivered to the Company within seven (7)
business days of the Effective Date of Termination.

///

///

///

 

 

     5.8 Compliance With Internal Revenue Code Section 409A.

(a) Short-Term Deferral Exemption. This Agreement is not intended to provide for any
deferral of compensation subject to Code Section 409A and, accordingly, the benefits provided
pursuant to this Agreement are intended to be paid not later than the later of: (i) the fifteenth
day of the third month following Executive’s first taxable year in which such benefit is no longer
subject to a substantial risk of forfeiture, and (ii) the fifteenth day of the third month
following the first taxable year of the Company in which such benefit is no longer subject to a
substantial risk of forfeiture, as determined in accordance with Code Section 409A and any Treasury
Regulations and other guidance issued there under. The date determined under this subsection is
referred to as the “Short-Term Deferral Date.”

(b) Compliance with Code Section 409A. Notwithstanding anything to the contrary herein, in
the event that any benefits provided pursuant to this Agreement are not actually or constructively
received by the Executive on or before the Short-Term Deferral Date, to the extent such benefit
constitutes a deferral of compensation subject to Code Section 409A, then: (i) subject to clause
(ii), such benefit shall be paid upon Executive’s Separation from Service, with respect to the
Company and its affiliates, and (ii) if Executive is a “specified employee,” as defined in Code
Section 409A(a)(2)(B)(i), with respect to the Company and its affiliates, such benefit shall be
paid (without interest) upon the first day of the seventh month after the date of Executive’s
Separation from Service (or, if earlier, the date of Executive’s death).

     5.9 No Duty to Mitigate. Executive shall be entitled to the full severance benefits
provided under this Section 5, without regard to Executive’s efforts or lack of efforts to obtain
alternative employment, and the severance benefits provided to Executive shall not be reduced by
any amounts earned by Executive from any other source.

     5.10 Acknowledgment. The parties acknowledge and agree that Executive’s employment may be
terminated at any time for any reason, and with or without Cause or notice. In the event of any
such termination, Executive shall not be entitled to any payments, benefits, damages, award,
injunction or compensation other than as expressly provided in this Agreement.

6. CONFIDENTIALITY

     During the Executives prior association with Peerless and during Executive’s employment,
Executive has had and will have access to and become acquainted with various information relating
to the business operations of the Company and the Related Entities, including customer and supply
lists, customer files, marketing data, business plans, strategies, employee lists, contracts,
financial records and accounts, products in development, product plans, projections and budgets,
and similar information. Executive further agrees that to the extent such information was not
previously known by him and as of the Effective Date, is not generally known to or available to the
public and/or the industry, and gives the Company and/or any Related Entity a material
advantage over competitors who do not know of or use such information, such information and
documents constitute “Confidential Information.” Executive further agrees that any
documents relating to the business of the Company or any Related Entity, whether they are prepared
by Executive or come into Executive’s possession in any other way, are owned by the Company or any
Related Entity, shall remain the exclusive property of the Company or such Related Entity, and must
be returned to the Company or such Related Entity upon termination of employment.
Executive shall not use any Confidential Information, directly

 

 

or indirectly, for Executive’s own benefit, or the benefit of any person or entity other than
the Company and the Related Entities, nor shall Executive disclose Confidential Information to any
person or entity other than the Company, the Related Entities, and their respective employees and
agents, during Executive’s employment or at any time thereafter, except as may be appropriate for
Executive to perform his duties as an employee, officer and/or director, directly or indirectly, of
the Company or such Related Entity.

7. NON-SOLICITATION

          (a) During the Executive’s employment, and for a period of twelve (12) months following the
date Executive’s employment hereunder is terminated (collectively, the “Covenant Period”),
Executive shall not, directly or indirectly, (i) solicit or assist any other person or entity to
solicit any business (other than business that is not substantially similar to the Business) from
any person or entity who is at the time a customer of the Company or any Related Entity or any
person or entity that was a customer of the Company or any Related Entity within six (6) months of
the date thereof; or (ii) take any action that would reasonably be expected to have the effect of
discouraging any person or entity who is at the time a lessor, licensor, customer, supplier,
licensee, or other business associate of the Company or any Related Entity or any person or entity
who had such a relationship with the Company or any Related Entity within twelve (12) months of the
date thereof, from entering into or maintaining, or causing it to terminate or cease, its
relationship with the Company or any Related Entity. This Section 7(a) shall not apply and
therefore shall not restrict Executive from soliciting or assisting any other person or entity to
solicit any persons or entities known to Executive or with whom Executive had business or personal
relationships as of the Effective Date except 7(a) shall apply to all such persons and entities
with whom Executive has been associated during his consulting and employment relationships with the
Company and Peerless.

          (b) Executive agrees that during the Covenant Period, Executive shall not, directly or
indirectly, solicit or encourage any employee of the Company to leave or reduce his or her
employment with the Company.

8. ARBITRATION AGREEMENT

     8.1 Claims Subject to Arbitration. Any controversy, dispute or claim between
Executive and the Company, or its parents, subsidiaries, affiliates and any of their officers,
directors, agents or other employees, shall be resolved by binding arbitration, at the request of
either party.

     The arbitrability of any controversy, dispute or claim under this Agreement shall be
determined by application of the substantive provisions of the Federal Arbitration Act (9 U.S.C.
sections 1 and 2) and by application of the procedural provisions of California law, except as
provided herein. Arbitration shall be the exclusive method for resolving any dispute and all
remedies available from a court of competent jurisdiction shall be available; provided, however,
that either party may request provisional relief from a court of competent jurisdiction, if such
relief is not available in a timely fashion through arbitration.

     The claims which are to be arbitrated include, but are not limited to any claim arising out of
or relating to this Agreement or the employment relationship between Executive and the Company,
claims for wages and other compensation, claims for breach of contract (express or

 

 

implied), claims for violation of public policy, wrongful termination, tort claims, claims for
unlawful discrimination and/or harassment (including, but not limited to, race, religious creed,
color, national origin, ancestry, physical disability, mental disability, gender identity or
expression, medical condition, marital status, age, pregnancy, sex or sexual orientation) to the
extent allowed by law, and claims for violation of any federal, state, or other government law,
statute, regulation, or ordinance, except for claims for workers’ compensation and unemployment
insurance benefits. This Agreement shall not be interpreted to provide for arbitration of any
dispute that does not constitute a claim recognized under applicable law.

     8.2 Selection of Arbitrator. The Executive and the Company will select a single
neutral arbitrator by mutual agreement. If the Executive and the Company are unable to agree on a
neutral arbitrator within thirty (30) days of a demand for arbitration, either party may elect to
obtain a list of arbitrators from the Judicial Arbitration and Mediation Service (“JAMS”)
or the American Arbitration Association (“AAA”), and the arbitrator shall be selected by
alternate striking of names from the list until a single arbitrator remains. The party initiating
the arbitration shall be the first to strike a name.

     Further the parties may agree to each select one (1) arbitrator with the two (2) selected
arbitrators then selecting a third (3rd) arbitrator by mutual agreement.

     All references to “Arbitrator” in all 8.0 subparagraphs shall be deemed to be either singular
of plural.

     8.3 Demand for Arbitration. The demand for arbitration must be in writing and must be
made by the aggrieved party within the statute of limitations period provided under applicable
State and/or Federal law for the particular claim(s). Failure to make a written demand within the
applicable statutory period constitutes a waiver of the right to assert that claim in any forum.

     8.4 Location of Arbitration. Arbitration proceedings will be held in Los Angeles
County, California.

     8.5 Choice of Law. The arbitrator shall apply applicable California and/or federal
substantive law to determine issues of liability and damages regarding all claims to be arbitrated,
and shall apply the Federal Rules of Evidence to the proceeding.

     8.6 Discovery. The parties shall be entitled to conduct reasonable discovery and the
arbitrator shall have the authority to determine what constitutes reasonable discovery. The
arbitrator shall hear motions for summary judgment/adjudication as provided in the Federal Rules of
Civil Procedure.

     8.7 Written Opinion and Award. Within thirty (30) days following the hearing and the
submission of the matter to the arbitrator, the arbitrator shall issue a written opinion and award
which shall be signed and dated. The arbitrator’s award shall decide all issues submitted by the
parties, and the arbitrator may not decide any issue not submitted. The opinion and award shall
include factual findings and the reasons upon which the decision is based. The arbitrator shall be
permitted to award only those remedies in law or equity which are requested by the parties and
allowed by law.

 

 

     8.8 Appeals. The final award may be appealed to another arbitrator who will be chosen
by the parties in the same manner as the original arbitrator. All the rules governing judicial
appeals of judgments from the Federal District Court for the State of California, the Ninth Circuit
Court of Appeals shall apply to any appeal of this award, including but not limited to the time
frames, deadlines and the standards of review.

     8.9 Costs of Arbitration. The parties shall each bear their own costs and attorneys’
fees in any arbitration proceeding, provided, however, that the arbitrator shall have the authority
to require either party to pay the costs and attorneys’ fees of the other party to the extent
permitted under applicable federal or state law, as a part of any remedy that may be ordered.

     8.10 Waiver of Right to Jury. Both the Company and Executive understands that by
using arbitration to resolve disputes they are giving up any right that they may have to a judge or
jury trial with regard to all issues concerning employment or otherwise covered by this Section 8.

9. GENERAL PROVISIONS

     9.1 Assignment; Binding Effect. Executive may not assign, delegate or otherwise
transfer this Agreement or any his rights or obligations hereunder without the prior written
consent of the Company and Peerless. Any attempted prohibited assignment or delegation shall be
void. This Agreement will be binding upon the successors and assigns of Peerless and the Company,
including any entity that acquires all or substantially all of the assets or business of Peerless
or the Company.

     9.2 Notices. All notices, requests, demands and other communications that are
required or may be given under this Agreement shall be in writing and shall be deemed to have been
duly given when received if personally delivered; when transmitted if transmitted by telecopy,
electronic or digital transmission method with electronic confirmation of receipt; the day after it
is sent, if sent for next-day delivery to a domestic address by recognized overnight delivery
service (e.g., FedEx); and upon receipt, if sent by certified or registered mail, return receipt
requested. In each case notice shall be sent to:

	 	 	 
	If to Peerless or the Company:

	 	Peerless Systems Corporation
	 

	 	2381 Rosecrans Avenue
	 

	 	Manhattan Beach, CA 90245
	 

	 	Attention: Chief Executive Officer
	 

	 	Facsimile: (310) 536-9460
	 
	 	 
	If to Executive:

	 	Andrew Lombard
	 

	 	9369 North 128th Way
	 

	 	Scottsdale, AZ 85259
	 

	 	Fax: 480-776-2800

     Either party may change its address for the purpose of this Section 9.2 by giving the other
party written notice of its new address in the manner set forth above.

 

 

     9.3 Entire Agreement. This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof, and supersedes all prior agreements; provided, however,
that this Agreement shall supplement, not supersede, any prior agreements concerning the
Confidential Information or other intellectual property of the Company, and any conflicts or
inconsistencies between such agreements shall be resolved so that the provision providing greater
rights to the Company shall prevail.

     9.4 Amendments; Waivers. This Agreement may be amended or modified, and any of the
terms and covenants may be waived, only by a written instrument executed by the parties hereto, or,
in the case of a waiver, by the party waiving compliance. Any waiver by any party in any one or
more instances of any term or covenant contained in this Agreement shall neither be deemed to be
nor construed as a further or continuing waiver of any such term or covenant of this Agreement.

     9.5 Provisions Severable. In case any one or more provisions of this Agreement shall
be invalid, illegal or unenforceable, in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not, in any way, be affected or impaired thereby.
If any provision hereof is determined by any court or arbitrator of competent jurisdiction to be
invalid or unenforceable by reason of such provision extending the covenants and agreements
contained herein for too great a period of time or over too great a geographical area, or being too
extensive in any other respect, such provision shall be interpreted to extend only over the maximum
period of time and geographical area, and to the maximum extent in all other respects, as to which
it is valid and enforceable, all as determined by such court in such action.

     9.6 Governing Law. This Agreement shall be construed, performed and enforced in
accordance with, and governed by the laws of the State of California without giving effect to the
principles of conflict of laws thereof.

     9.7 Return of Property. Upon termination of Executive’s employment, without prior
notice and within seven (7) business days of effective termination, Executive shall return to the
Company any and all Company property, materials, or equipment in his or her possession, including,
without limitation, Company property described in Section 6. Should Executive not comply with this
duty of return of Company property Executive agrees that the Company or Peerless may offset any
compensation due Executive by the FMV, as determined by the Company or Peerless, of the property
not returned.

     9.8 Cooperation. During Executive’s employment with the Company and thereafter,
Executive agrees to cooperate with Peerless, the Company and their respective agents, accountants
and attorneys concerning any matter with which Executive was involved during his employment. Such
cooperation shall include, but not be limited to, providing information to, meeting with and
reviewing documents provided by Peerless, the Company and their respective agents, accountants and
attorneys during normal business hours or other mutually agreeable hours upon reasonable notice and
to make himself available for depositions and hearings, if necessary and upon reasonable notice.
If Executive’s cooperation is required after the termination of Executive’s employment, Peerless
and/or the Company shall reimburse Executive for any out of pocket expenses incurred in and any
wages lost by Executive for time spent performing his obligations hereunder.

 

 

     9.9 Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall constitute the same instrument.

     9.10 Headings. The headings contained in this Agreement are provided solely for the
Parties’ convenience and shall not be deemed to alter the meaning of the text of the Agreement.

     9.11 Survival. Sections 6, 7, 8, and 9.5, 9.7 and 9.8 shall survive the termination
of this Agreement. If Executive’s becomes entitled to the Severance Payment, Vesting and severance
benefits under Sections 5.7 and 5.9 in connection with the termination of this Agreement, the
Company’s obligation to make such payments and provide such benefits shall survive the termination
of this Agreement. Any violations by Executive of his obligations under Sections 6 and 7 will be
cause for termination in the entirety of any remaining obligations of the Company and Peerless.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date
first written above.

	 	 	 	 	 
	PEERLESS:

Peerless Systems Corporation,

a Delaware corporation

 	 	 
	
 	 	 
	By: Richard L. Roll 	 	 
	Its: Chief Executive Officer 	 	 
	 

	 	 	 	 	 
	THE COMPANY:

T1 Delaware Corporation,

a Delaware corporation

 	 	 
	
 	 	 
	By: Richard L. Roll 	 	 
	Its: Chief Executive Officer 	 	 
	 

	 	 	 	 	 
	EXECUTIVE:

 	 	 
	
 	 	 
	Andrew Lombardexv10w2

 

Exhibit 10.2

PEERLESS SYSTEMS CORPORATION

2005 INCENTIVE AWARD PLAN

STOCK OPTION GRANT NOTICE AND

STOCK OPTION AGREEMENT

     Peerless Systems Corporation, a Delaware corporation (the “Company”), pursuant to its 2005
Incentive Award Plan (the “Plan”), hereby grants to the holder listed below (“Participant”), an
option to purchase the number of shares of the Company’s common stock, par value $0.001 (“Stock”),
set forth below (the “Option”). This Option is subject to all of the terms and conditions set
forth herein and in the Stock Option Agreement attached hereto as Exhibit A (the “Stock
Option Agreement”) and the Plan, which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant
Notice and the Stock Option Agreement.

	 	 	 	 	 
	Participant:
	 	Andrew Lombard	 	 
	 
	 	 	 	 
	Grant Date:
	 	January 10, 2008	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Exercise Price per Share:
	 	$2.38	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Total Exercise Price:
	 	$476,000.00	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Total Number of Shares Subject to the Option:
	 	200,000 shares	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Expiration Date:
	 	January 10, 2018	 	 
	 
	 	 	 	 

	 	 	 
	Type of Option:

	 	þ Incentive Stock Option     o Non-Qualified Stock Option
	 
	 	 
	Vesting Schedule:

	 	This Option shall vest and become exercisable for the shares of Stock in a series of 4 equal installments on
each anniversary of the Grant Date and, if applicable, pursuant to that certain Change in Control Severance
Agreement and Employment Agreement, each among the Company, Participant and T1 Delaware Corporation. In no
event, however, shall this Option vest and become exercisable for any additional shares of Stock after
Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy, as
applicable, except as provided herein and in each of the Change in Control Severance Agreement and Employment
Agreement.

     By his or her signature, Participant agrees to be bound by the terms and conditions of the
Plan, the Stock Option Agreement and this Grant Notice. Participant has reviewed the Stock Option
Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Grant Notice and fully understands all provisions of this
Grant Notice, the Stock Option Agreement and the Plan. Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Administrator of the Plan
upon any questions arising under the Plan or relating to the Option.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	PEERLESS SYSTEMS CORPORATION

	 	 	 	PARTICIPANT
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Print Name:	 	Richard L. Roll	 	 	 	Print Name:	 	Andrew Lombard	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	President and CEO	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Address:	 	2381 Rosecrans Avenue	 	 	 	Address:	 	9369 North 128th Way	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	El Segundo, CA 90245
	 	 	 	 	 	 	 	Scottsdale, AZ, 85259	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT A

TO STOCK OPTION GRANT NOTICE

STOCK OPTION AGREEMENT

     Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option
Agreement (this “Agreement”) is attached, Peerless Systems Corporation, a Delaware corporation (the
“Company”), has granted to Participant an option under the Company’s 2005 Incentive Award Plan (the
“Plan”) to purchase the number of shares of Stock indicated in the Grant Notice.

ARTICLE I

GENERAL

     1.1 Defined Terms. Capitalized terms not specifically defined herein shall have the
meanings specified in the Plan and the Grant Notice.

     1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions
of the Plan which are incorporated herein by reference.

ARTICLE II

GRANT OF OPTION

     2.1 Grant of Option. In consideration of Participant’s past and/or continued
employment with or service to the Company or a Parent or Subsidiary and for other good and valuable
consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the
Company irrevocably grants to Participant the Option to purchase any part or all of an aggregate of
the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set
forth in the Plan and this Agreement. Unless designated as a Non-Qualified Stock Option in the
Grant Notice, the Option shall be an Incentive Stock Option to the maximum extent permitted by law.

     2.2 Exercise Price. The exercise price of the shares of Stock subject to the Option
shall be as set forth in the Grant Notice, without commission or other charge; provided, however,
that the exercise price per share of Stock subject to the Option shall not be less than 100% of the
Fair Market Value of a share of Stock on the Grant Date. Notwithstanding the foregoing, if this
Option is designated as an Incentive Stock Option and Participant owns (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of
the Company (each within the meaning of Section 424 of the Code), the exercise price per share of
Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of
Stock on the Grant Date.

     2.3 Consideration to the Company; No Employment Rights. In consideration of the grant
of the Option by the Company, Participant agrees to render faithful and efficient services to the
Company or any Parent or Subsidiary. Nothing in the Plan or this Agreement shall confer upon
Participant any right to continue in the employ or service of the Company or any Parent or
Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Parents
and Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the
services of Participant at any time for any reason whatsoever, with or without Cause, except to the
extent expressly provided otherwise in a written agreement between the Company, a Parent or a
Subsidiary and Participant.

A-1

 

ARTICLE III

PERIOD OF EXERCISABILITY

     3.1 Commencement of Exercisability.

          (a) Subject to Sections 3.3, 5.8 and 5.10, the Option shall become vested and exercisable in
such amounts and at such times as are set forth in the Grant Notice.

          (b) No portion of the Option which has not become vested and exercisable at the date of
Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy
shall thereafter become vested and exercisable, except as may be otherwise provided by the
Administrator or as set forth in a written agreement between the Company and Participant.

     3.2 Duration of Exercisability. The installments provided for in the vesting schedule
set forth in the Grant Notice are cumulative. Each such installment which becomes vested and
exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and
exercisable until it becomes unexercisable under Section 3.3.

     3.3 Expiration of Option. The Option may not be exercised to any extent by anyone
after the first to occur of the following events:

          (a) The expiration of ten years from the Grant Date;

          (b) If this Option is designated as an Incentive Stock Option and Participant owned (within
the meaning of Section 424(d) of the Code), at the time the Option was granted, more than 10% of
the total combined voting power of all classes of stock of the Company or any “subsidiary
corporation” of the Company or any “parent corporation” of the Company (each within the meaning of
Section 424 of the Code), the expiration of five years from the Grant Date;

          (c) The expiration of three months following the date of Participant’s Termination of
Employment, Termination of Directorship or Termination of Consultancy, unless such termination
occurs by reason of Participant’s death or Disability or Participant’s discharge for Cause;

          (d) The expiration of one year following the date of Participant’s Termination of Employment,
Termination of Directorship or Termination of Consultancy by reason of Participant’s death or
Disability; or

          (e) The date of Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy by the Company or any Parent or Subsidiary by reason of Participant’s
discharge for Cause.

     Participant acknowledges that an Incentive Stock Option exercised more than three months after
Participant’s Termination of Employment, other than by reason of death or Disability, will be taxed
as a Non-Qualified Stock Option.

     3.4 Special Tax Consequences. Participant acknowledges that, to the extent that the
aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of
Stock with respect to which Incentive Stock Options, including the Option, are exercisable for the
first time by Participant in any calendar year exceeds $100,000, the Option and such other options
shall be Non-Qualified Stock Options to the extent necessary to comply with the limitations imposed
by Section 422(d)

A-2

 

of the Code. Participant further acknowledges that the rule set forth in the preceding
sentence shall be applied by taking the Option and other “incentive stock options” into account in
the order in which they were granted, as determined under Section 422(d) of the Code and the
Treasury Regulations thereunder.

ARTICLE IV

EXERCISE OF OPTION

     4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(b) and 5.2(c),
during the lifetime of Participant, only Participant may exercise the Option or any portion
thereof. After the death of Participant, any exercisable portion of the Option may, prior to the
time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s
personal representative or by any person empowered to do so under the deceased Participant’s will
or under the then applicable laws of descent and distribution.

     4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior to the time when
the Option or portion thereof becomes unexercisable under Section 3.3.

     4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary of the Company or the Secretary’s office of all of
the following prior to the time when the Option or such portion thereof becomes unexercisable under
Section 3.3:

          (a) An Exercise Notice in writing signed by Participant or any other person then entitled to
exercise the Option or portion thereof, stating that the Option or portion thereof is thereby
exercised, such notice complying with all applicable rules established by the Administrator. Such
notice shall be substantially in the form attached as Exhibit B to the Grant Notice (or
such other form as is prescribed by the Administrator);

          (b) The receipt by the Company of full payment for the shares with respect to which the Option
or portion thereof is exercised, including payment of any applicable withholding tax, which may be
in one or more of the forms of consideration permitted under Section 4.4;

          (c) A bona fide written representation and agreement, in such form s is prescribed by the
Administrator, signed by Participant or the other person then entitled to exercise such Option or
portion thereof, stating that the shares of Stock are being acquired for Participant’s own account,
for investment and without any present intention of distributing or reselling said shares or any of
them except as may be permitted under the Securities Act and then applicable rules and regulations
thereunder and any other applicable law, and that Participant or other person then entitled to
exercise such Option or portion thereof will indemnify the company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if any sale or
distribution of the shares by such person is contrary to the representation and agreement referred
to above. The Administrator may, in its absolute discretion, take whatever additional actions it
deems appropriate to ensure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state securities laws or
regulations and any other applicable law. Without limiting the generality of the foregoing, the
Administrator may require an opinion of counsel acceptable to it to the effect that any subsequent
transfer of shares acquired on an Option exercise does not violate the Securities Act, and may
issue stop-transfer orders covering such shares. Share certificates evidencing Stock issued on
exercise of the Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and agreement referred to in
the first sentence of this subsection (c) shall, however, not be required if the shares to be
issued pursuant to such exercise have

A-3

 

been registered under the Securities Act, and such registration is then effective in respect
of such shares; and

          (d) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by
any person or persons other than Participant, appropriate proof of the right of such person or
persons to exercise the Option.

     4.4 Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Participant:

          (a) cash;

          (b) check;

          (c) To the extent permitted under applicable laws, delivery of a notice that the Participant
has placed a market sell order with a broker with respect to shares of Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the aggregate exercise price; provided,
that payment of such proceeds is then made to the Company upon settlement of such sale;

          (d) With the consent of the Administrator, such payment may be made, in whole or in part,
through the surrender of shares of Stock then issuable upon exercise of the Option having a Fair
Market Value on the date of Option exercise equal to the aggregate exercise price of the Option or
exercised portion thereof;

          (e) With the consent of the Administrator, such payment may be made, in whole or in part,
through the delivery of shares of Stock which have been owned by Participant for at least six (6)
months, duly endorsed for transfer to the Company with a Fair Market Value on the date of Option
exercise equal to the aggregate exercise price of the Option or exercised portion thereof; or

          (f) With the consent of the Administrator, any combination of the consideration provided in
the foregoing paragraphs (a), (b), (c), (d) and (e).

     4.5 Conditions to Issuance of Stock Certificates. The shares of Stock deliverable
upon the exercise of the Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or deliver any shares
of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all
of the following conditions:

          (a) The admission of such shares to listing on all stock exchanges on which such Stock is then
listed;

          (b) The completion of any registration or other qualification of such shares under any state
or federal law or under rulings or regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem
necessary or advisable;

          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Administrator shall, in its absolute discretion, determine to be necessary or
advisable;

A-4

 

          (d) The receipt by the Company of full payment for such shares, including payment of any
applicable withholding tax, which may be in one or more of the forms of consideration permitted
under Section 4.4; and

          (e) The lapse of such reasonable period of time following the exercise of the Option as the
Administrator may from time to time establish for reasons of administrative convenience.

     4.6 Rights as Stockholder. The holder of the Option shall not be, nor have any of the
rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until such shares shall have been issued by the
Company to such holder (as evidenced by the appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company). No adjustment will be made for a dividend or other
right for which the record date is prior to the date the shares are issued, except as provided in
Section 12.3 of the Plan.

ARTICLE V

OTHER PROVISIONS

     5.1 Administration. The Administrator shall have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions
taken and all interpretations and determinations made by the Administrator in good faith shall be
final and binding upon Participant, the Company and all other interested persons. No member of the
Administrator shall be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan, this Agreement or the Option. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and duties of the
Administrator under the Plan and this Agreement.

     5.2 Option Not Transferable.

          (a) Subject to Section 5.2(b), the Option may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution, unless and until the shares
underlying the Option have been issued, and all restrictions applicable to such shares have lapsed.
Neither the Option nor any interest or right therein shall be liable for the debts, contracts or
engagements of Participant or his or her successors in interest or shall be subject to disposition
by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether
such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect, except to the extent that such
disposition is permitted by the preceding sentence.

          (b) Notwithstanding any other provision in this Agreement, with the consent of the
Administrator and to the extent the Option is not intended to qualify as an Incentive Stock Option,
the Option may be transferred to one or more Permitted Transferees, subject to the terms and
conditions set forth in Section 12.1(b) of the Plan.

          (c) Unless transferred to a Permitted Transferee in accordance with Section 5.2(b), during the
lifetime of Participant, only Participant may exercise the Option or any portion thereof. Subject
to such conditions and procedures as the Administrator may require, a Permitted Transferee may
exercise the Option or any portion thereof during Participant’s lifetime. After the death of
Participant, any exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any
person empowered to do so under the deceased Participant’s will or under the then applicable laws
of descent and distribution.

A-5

 

     5.3 Restrictive Legends and Stop-Transfer Orders.

          (a) The share certificate or certificates evidencing the shares of Stock purchased hereunder
shall be endorsed with any legends that may be required by state or federal securities laws.

          (b) Participant agrees that, in order to ensure compliance with the restrictions referred to
herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.

          (c) The Company shall not be required: (i) to transfer on its books any shares of Stock that
have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or
(ii) to treat as owner of such shares of Stock or to accord the right to vote or pay dividends to
any purchaser or other transferee to whom such shares shall have been so transferred.

     5.4 Shares to Be Reserved. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Stock as will be sufficient to satisfy
the requirements of this Agreement.

     5.5 Notices. Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of the Secretary of the Company at the address given
beneath the signature of the Company’s authorized officer on the Grant Notice, and any notice to be
given to Participant shall be addressed to Participant at the address given beneath Participant’s
signature on the Grant Notice. By a notice given pursuant to this Section 5.5, either party may
hereafter designate a different address for notices to be given to that party. Any notice which is
required to be given to Participant shall, if Participant is then deceased, be given to the person
entitled to exercise his or her Option pursuant to Section 4.1 by written notice under this Section
5.5. Any notice shall be deemed duly given when sent via email or when sent by certified mail
(return receipt requested) and deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.

     5.6 Titles. Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

     5.7 Stockholder Approval. The Plan will be submitted for approval by the Company’s
stockholders within twelve months after the date the Plan was initially adopted by the Board. The
Option may not be exercised to any extent by anyone prior to the time when the Plan is approved by
the stockholders, and if such approval has not been obtained by the end of said twelve month
period, the Option shall thereupon be cancelled and become null and void.

     5.8 Governing Law; Severability. This Agreement shall be administered, interpreted
and enforced under the laws of the State of Delaware, without regard to the conflicts of law
principles thereof. Should any provision of this Agreement be determined by a court of law to be
illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain
enforceable.

     5.9 Conformity to Securities Laws. Participant acknowledges that the Plan is intended
to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange Commission
thereunder, and state securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in
such a manner as to conform to

A-6

 

such laws, rules and regulations. To the extent permitted by applicable law, the Plan and
this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and
regulations.

     5.10 Amendments. This Agreement may not be modified, amended or terminated except by
an instrument in writing, signed by Participant or such other person as may be permitted to
exercise the Option pursuant to Section 4.1 and by a duly authorized representative of the Company.

     5.11 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer herein set forth in
Section 5.2, this Agreement shall be binding upon Participant and his or her heirs, executors,
administrators, successors and assigns.

     5.13 Notification of Disposition. If this Option is designated as an Incentive Stock
Option, Participant shall give prompt notice to the Company of any disposition or other transfer of
any shares of Stock acquired under this Agreement if such disposition or transfer is made (a)
within two years from the Grant Date with respect to such shares or (b) within one year after the
transfer of such shares to him. Such notice shall specify the date of such disposition or other
transfer and the amount realized, in cash, other property, assumption of indebtedness or other
consideration, by Participant in such disposition or other transfer.

     5.14 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange
Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set
forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such
exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended
to the extent necessary to conform to such applicable exemptive rule.

     5.15 Entire Agreement. The Plan and this Agreement (including all Exhibits hereto)
constitute the entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of the Company and Participant with respect to the subject matter
hereof.

A-7

 

EXHIBIT B

TO STOCK OPTION GRANT NOTICE

FORM OF EXERCISE NOTICE

     Effective as of today,                       ___, 20 ___, the undersigned
(“Participant”) hereby elects to exercise Participant’s option to purchase the number of shares of
common stock specified below (the “Shares”) of Peerless Systems Corporation, a Delaware corporation
(the “Company”), under and pursuant to the Peerless Systems Corporation 2005 Incentive Award Plan
(the “Plan”) and the Stock Option Grant Notice and Stock Option Agreement dated as of 
(the “Option Agreement”). Capitalized terms used herein without definition
shall have the meanings given in the Plan and, if not defined in the Plan, the Option Agreement.

	 	 	 
	Grant Date:
	 	                                                                        
        
	 
	 	 
	Number of Shares as to which Option
is Exercised:
	 	                                                                        
        
	 
	 	 
	Exercise Price per Share:
	 	$                     
	 
	 	 
	Total Exercise Price:
	 	$                     
	 
	 	 
	Certificate to be issued in name of:
	 	                                                                         
       
	 
	 	 
	Payment delivered herewith:
	 	$                      (Representing the full exercise price
	 
	 	for the Shares, as well as any applicable withholding
	 
	 	tax)
	 
	 	Form of Payment:                                        
	 
	 	                               (Please specify)

Type of Option:     o Incentive Stock Option     o Non-Qualified Stock Option

     Participant acknowledges that Participant has received, read and understood the Plan and the
Option Agreement. Participant agrees to abide by and be bound by their terms and conditions.
Participant understands that Participant may suffer adverse tax consequences as a result of
Participant’s purchase or disposition of the Shares. Participant represents that Participant has
consulted with any tax consultants Participant deems advisable in connection with the purchase or
disposition of the Shares and that Participant is not relying on the Company for any tax advice.
The Plan and Option Agreement are incorporated herein by reference. This Agreement, the Plan and
the Option Agreement constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with respect to the subject
matter hereof.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	ACCEPTED BY: 

PEERLESS SYSTEMS CORPORATION	 	 	 	SUBMITTED BY:
	 
	By:

	 	 	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	   
	Print Name:	 	 	 	 	 	Print Name:	 	 
	Title:	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Address:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]