Document:

exv10w4

 

EXHIBIT 10.4

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
Eric Stokesberry (the “Optionee”) and Keynote Systems, Inc. (the “Company”) is
entered into by and between Optionee and the Company as of April 4, 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 

1

 

	 	 	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.”

[The remainder of this page is intentionally left blank.]

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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\ Eric Stokesberry
 

(Signature)
	 	 
	 
	 	 	 	 	 	 	 	 
	Umang Gupta	 	 	 	Eric Stokesberry	 	 
	 	 	 	 	 	 	 
	(Please print name)	 	 	 	(Please print name)	 	 
	 
	 	 	 	 	 	 	 	 
	CEO	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(Please print title)	 	 	 	 	 	 

3exv10w5

 

EXHIBIT 10.5

April 12, 2006

Mr. Krishna Khadloya

777 Mariners Island Blvd.

San Mateo, CA 94404

Dear Krishna:

     I write to confirm our discussions of last week regarding your position of Vice President
Engineering of Keynote Systems, Inc. This letter embodies the terms of your promotion which
occurred effective April 1, 2006.

     You will report to Umang Gupta, Chief Executive Officer and effective April 1, 2006 your base
salary has been adjusted to $7,500.00, paid semi-monthly. In addition, you are eligible for a 20%
MBO bonus based on quarterly objectives.

     In anticipation and recognition of your important future contribution to the growth of
Keynote, on April 4th 2006, you received an incentive stock option grant for 50,000
shares of common stock. You will receive incentive stock options to the extent permitted under the
law, which currently allows the grant during any one year of incentive stock options with a fair
market value at the date of grant of up to $100,000.00. If the value of the shares exceeds
$100,000.00, that amount in excess will be granted as non-qualified stock options. The grant date
of your option was April 4, 2006 the date designated by the Board by a written resolution. Fair
market value on such date was the closing price per share on the NASDAQ National Market. Consistent
with our employee stock option plan, vesting relates to exercisability not “ownership”, these
shares will vest as to 1/4th of the total number of shares on your first anniversary of the
effective date of this promotion with an additional 1/48th of the total shares vesting at the end
of months 13 through 48 of your continued employment with Keynote. The terms of your stock option
grant are set forth more fully in our Stock Option Plan agreements.

     As an employee, you may terminate employment at any time and for any reason whatsoever with
notice to Keynote Systems, Inc. We require that, in the event of resignation, you give at least
three (3) months notice. Similarly, Keynote Systems may terminate your employment at any time and
for any reason whatsoever, with or without cause, with three (3) months notice, or three (3) months
of base salary plus quarterly incentive compensation as averaged over the previous year, provided
that in order to receive any separation benefits you must first sign, date and deliver to the
Company, and allow to become effective, a general release of all known and unknown claims in the
form provided to you by the Company; and further provided that you will not be required to release
any right to indemnification you may have under applicable law, the Company’s Certificate of
Incorporation, the Company’s bylaws or any indemnity agreement between you and the Company.

     Furthermore, this letter agreement supersedes all our prior written or oral communication with
you and can only be modified by written agreement signed by you and an officer of Keynote Systems.

I look forward to working with you in this new role!

Sincerely,

\s\ Umang Gupta

Umang Gupta

Chairman & CEO

	 	 	 	 	 
	Accepted:

	 	     \s\ Krishna Khadloya
 

           Krishna Khadloya
	 	 

Date: April 13, 2006exv10w6

 

EXHIBIT 10.6

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
Krishna Khadloya (the “Optionee”) and Keynote Systems, Inc. (the “Company”) is
entered into by and between Optionee and the Company as of April 4, 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.”

[The remainder of this page is intentionally left blank.]

2

 

     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\ Krishna Khadloya
 

(Signature)
	 	 
	 
	 	 	 	 	 	 	 	 
	Umang Gupta	 	 	 	Krishna Khadloya	 	 
	 	 	 	 	 	 	 
	(Please print name)	 	 	 	(Please print name)	 	 
	 
	 	 	 	 	 	 	 	 
	CEO	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(Please print title)	 	 	 	 	 	 

3

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