EXHIBIT 10.9(b)
NONSTATUTORY STOCK OPTION AGREEMENT
This Nonstatutory Stock Option Agreement is made as of the ______ day
of ____________, 20___, between BMC Software, Inc., a Delaware corporation (the
"Company"), and ______________________________ ("Employee").
To carry out the purposes of the BMC Software, Inc. 2002 Employee
Incentive Plan (the "Plan"), by affording Employee the opportunity to purchase
shares of common stock of the Company, par value $.01 per share ("Stock"), and
in consideration of the mutual agreements and other matters set forth herein and
in the Plan, the Company and Employee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to Employee
the right and option ("Option") to purchase all or any part of an aggregate of
_________ shares of Stock, on the terms and conditions set forth herein and in
the Plan, which Plan is incorporated herein by reference as a part of this
Agreement. In the event of any conflict between the terms of this Agreement and
the Plan, the Plan shall control. Capitalized terms used but not defined in this
Agreement shall have the meaning attributed to such terms under the Plan, unless
the context requires otherwise. This Option shall not be treated as an incentive
stock option within the meaning of section 422(b) of the Code.
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to
the exercise of this Option shall be $______ per share, which has been
determined to be not less than the Fair Market Value of the Stock at the date of
grant of this Option.
3. EXERCISE OF OPTION. Subject to the earlier expiration of this Option
as herein provided, this Option may be exercised, by written notice (in the form
prescribed by the Company from time to time) to the Company at its principal
executive office addressed to the attention of its President (or such other
officer or employee of the Company as the Company may designate from time to
time), at any time and from time to time after the date of grant hereof, but,
except as otherwise provided below, this Option shall not be exercisable for
more than a percentage of the aggregate number of shares offered by this Option
determined by the number of full years from the date of grant hereof to the date
of such exercise, in accordance with the following schedule:
PERCENTAGE OF SHARES
EXERCISE DATE THAT MAY BE PURCHASED
------------- ---------------------
less than 3 months 0%
3 months or more, but less than 6 months 6 1/4%
6 months or more, but less than 9 months 12 1/2%
9 months or more, but less than 12 months 18 3/4%
12 months or more, but less than 15 months 25%
15 months or more, but less than 18 months 31 1/4%
18 months or more, but less than 21 months 37 1/2%
21 months or more, but less than 24 months 43 3/4%
24 months or more, but less than 27 months 50%
27 months or more, but less than 30 months 56 1/4%
30 months or more, but less than 33 months 62 1/2%
33 months or more, but less than 36 months 68 3/4%
36 months or more, but less than 39 months 75%
39 months or more, but less than 42 months 81 1/4%
42 months or more, but less than 45 months 87 1/2%
45 months or more, but less than 48 months 93 3/4%
48 months or more 100%
Notwithstanding the foregoing, in the event Employee takes an unpaid leave of
absence from the Company (a) Employee's right to exercise this Option shall be
suspended three months after the beginning of such leave, (b) Employee's right
to exercise this Option shall be reinstated if Employee returns to active
employment with the Company within 12 months after the beginning of such leave,
and (c) if Employee does not return to active employment with the Company within
12 months after the beginning of such leave, then, for purposes of this Option,
Employee shall be considered to have terminated employment on the date such
leave began. Further, notwithstanding the exercise schedule set forth above, (i)
while Employee is on an unpaid leave of absence, further vesting of shares stops
and this Option is exercisable (to the extent provided in the preceding
sentence) only as to the number of shares Employee was entitled to purchase
hereunder as of the date such leave began, and (ii) if Employee returns to
active employment with the Company within 12 months after the beginning of such
leave, then the exercise schedule set forth above shall be reinstated (subject
to the provisions of clause (i) of this sentence).
This Option is not transferable otherwise than by bequest or the laws
of descent and distribution. This Option may be exercised only while Employee
remains an employee of the Company and will terminate and cease to be
exercisable upon Employee's termination of employment with the Company, except
that:
(a) If Employee's employment with the Company terminates by
reason of long-term disability (within the meaning assigned to such
term by Employee's employer for Employee's job description and primary
location of employment), then this Option may be exercised by Employee
(or Employee's estate or the person who acquires this Option by will or
the laws of descent and distribution or otherwise by reason of the
death of Employee) at any time during the period of one year following
such termination, but only as to the number of shares Employee was
entitled to purchase hereunder as of the date Employee's employment so
terminates.
(b) If Employee dies while in the employ of the Company, then
Employee's estate, or the person who acquires this Option by will or
the laws of descent and distribution or otherwise by reason of the
death of Employee, may exercise this Option at any time during the
period of one year following the date of Employee's death, as follows:
(i) if Employee had attained age 65 at the time of Employee's death,
then this Option may be exercised in full; and (ii) if Employee had not
attained age 65 at the time
-2-
of Employee's death, then this Option may be exercised only as to
the number of shares Employee was entitled to purchase hereunder as of
the date of Employee's death.
(c) If Employee's employment with the Company terminates for any
reason other than as described in (a) or (b) above, then, unless such
employment is terminated for cause or as otherwise provided in
Paragraph 7 below, this Option may be exercised by Employee at any time
during the period of three months following such termination, or by
Employee's estate (or the person who acquires this Option by will or
the laws of descent and distribution or otherwise by reason of the
death of Employee) during a period of one year following Employee's
death if Employee dies during such three-month period, but in each case
only as to the number of shares Employee was entitled to purchase
hereunder upon exercise of this Option as of the date Employee's
employment so terminates. As used in this paragraph, the term "cause"
shall mean Employee (i) has been convicted of a misdemeanor involving
moral turpitude or of a felony, (ii) has engaged in gross negligence or
willful misconduct in the performance of the duties of Employee's
employment, (iii) has willfully disregarded any written corporate
policies established by the Company, or (iv) has materially breached
any material provision of any written agreement between Employee and
the Company or any of its Affiliates.
This Option shall not be exercisable in any event after the expiration
of ten years from the date of grant hereof, and this Option shall not become
exercisable with respect to any additional shares after termination of
Employee's employment. Except as provided in Paragraph 4, the purchase price of
shares as to which this Option is exercised shall be paid in full at the time of
exercise in cash (including check, bank draft or money order payable to the
order of the Company). No fraction of a share of Stock shall be issued by the
Company upon exercise of an Option; rather, Employee shall provide a cash
payment for such amount as is necessary to effect the issuance of only whole
shares of Stock. Unless and until a certificate or certificates representing
such shares shall have been issued by the Company to Employee, Employee (or the
person permitted to exercise this Option in the event of Employee's death) shall
not be or have any of the rights or privileges of a stockholder of the Company
with respect to shares acquirable upon an exercise of this Option.
4. CASHLESS EXERCISE. Employee (or the person permitted to exercise
this Option in the event of Employee's death) may direct, in a properly executed
written notice, a cashless exercise of this Option pursuant to the procedures
established by the Committee and in effect on the date of such exercise of this
Option. Notwithstanding the foregoing, the Company shall not be required to
comply with, and may unilaterally terminate, the right of Employee (or such
person) to request a cashless exercise of this Option if, as a result of a
change in the accounting rules and/or legal requirements applicable to the
Company or Employee, or the interpretation thereof, compliance with such
provisions will result in the imposition of adverse financial reporting
requirements on the Company or other adverse consequences to the Company or
Employee.
5. WITHHOLDING OF TAX. To the extent that the exercise of this Option
or the disposition of shares of Stock acquired by exercise of this Option
results in compensation income or wages to Employee for federal, state, local or
foreign tax purposes, Employee shall deliver to the Company at the time of such
exercise or disposition such amount of money as the Company
-3-
may require to meet its obligation under applicable tax laws or regulations. No
exercise of this Option shall be effective until Employee (or the person
entitled to exercise this Option, as applicable) has made arrangements approved
by the Company to satisfy all applicable minimum tax withholding requirements of
the Company.
6. STATUS OF STOCK. The Company intends to register for issuance under
the Securities Act of 1933, as amended (the "Act"), the shares of Stock
acquirable upon exercise of this Option, and to keep such registration effective
throughout the period this Option is exercisable. In the absence of such
effective registration or an available exemption from registration under the
Act, issuance of shares of Stock acquirable upon exercise of this Option will be
delayed until registration of such shares is effective or an exemption from
registration under the Act is available. The Company intends to use its
reasonable efforts to ensure that no such delay will occur. In the event
exemption from registration under the Act is available upon an exercise of this
Option, Employee (or the person permitted to exercise this Option in the event
of Employee's death), if requested by the Company to do so, will execute and
deliver to the Company in writing an agreement containing such provisions as the
Company may require to assure compliance with applicable securities laws.
Employee agrees that the shares of Stock which Employee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable federal, state, or foreign
securities laws. Employee also agrees that (a) the certificates representing the
shares of Stock purchased under this Option may bear such legend or legends as
the Company deems appropriate in order to assure compliance with applicable
securities laws, (b) the Company may refuse to register the transfer of the
shares of Stock purchased under this Option on the stock transfer records of the
Company if such proposed transfer would in the opinion of counsel satisfactory
to the Company constitute a violation of any applicable securities law, and (c)
the Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the shares of Stock purchased under this Option.
7. OBLIGATIONS UPON TERMINATION OF EMPLOYMENT. In connection with
Employee's employment by the Company, the Company or an Affiliate thereof shall
provide Employee with access to the confidential information of the Company and
its Affiliates, or shall provide Employee the opportunity to develop business
good will inuring to the benefit of the Company and its Affiliates, or shall
entrust business opportunities to Employee. Employee has agreed, and hereby
agrees, as specified in more detail in Employee's Invention and Non-Disclosure
Agreement with the Company, to maintain the confidentiality of the Company's and
its Affiliates' information and to exercise the highest measures of fidelity and
loyalty in the protection and preservation of the Company's and its Affiliates'
goodwill and business opportunities. As part of the consideration for the Option
granted to Employee hereunder; to protect the Company's and its Affiliates'
confidential information, the business good will of the Company and its
Affiliates that has been and will in the future be developed in Employee, or the
business opportunities that have been and will in the future be disclosed or
entrusted to Employee by the Company and its Affiliates; and as an additional
incentive for the Company and Employee to enter into this Agreement, the Company
and Employee agree that if Employee during the 12 months following the
termination of Employee's employment with the Company in any geographic area or
market where the Company or any of its Affiliates are conducting
-4-
business as of the date of termination of the employment relationship or have
during the previous 12 months conducted such business:
(a) engages in any business competitive with the business
conducted by the Company or any of its Affiliates; or
(b) renders advice or services to, or otherwise assists, any
other person, association, or entity who is engaged, directly or
indirectly, in any business competitive with the business conducted by
the Company or any of its Affiliates with respect to such competitive
business; or
(c) directly or indirectly solicits or accepts business
competitive with the business conducted by the Company or any of its
Affiliates from any customers or prospects of the Company or any of its
Affiliates; or
(d) induces any employee of the Company or any of its Affiliates
to terminate his or her employment with the Company or any such
Affiliate or hires or assists in the hiring of any such employee by any
person,
then (i) this Option shall immediately terminate and cease to be exercisable and
(ii) the Company shall be entitled to recover from Employee, and Employee shall
pay to the Company, an amount of money equal to A multiplied by B, where A
equals the amount of the gain, if any, that Employee received from the exercise
of this Option during the period beginning on the date that is one year before
the date of Employee's termination of employment with the Company and ending on
the date this Option terminates and ceases to be exercisable as provided herein,
and B equals the fraction X divided by Y, where X equals 365 minus the number of
consecutive days following Employee's termination of employment with the Company
during which Employee remained in compliance with the restrictive covenants set
forth in this Paragraph 7, and Y equals 365.
If any of the restrictions set forth in this Paragraph 7 are found by a
court to be unreasonable, or overly broad as to geographic area or time, or
otherwise unenforceable, the parties intend for such restrictions to be modified
by the court so as to be reasonable and enforceable and, as so modified, to be
fully enforced.
8. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, Employee
shall be considered to be in the employment of the Company as long as Employee
remains an employee of either the Company, an Affiliate, or a corporation or a
parent or subsidiary of such corporation assuming or substituting a new option
for this Option. Without limiting the scope of the preceding sentence, it is
expressly provided that Employee shall be considered to have terminated
employment with the Company at the time of the termination of the "Affiliate"
status under the Plan of the entity or other organization that employs Employee.
Any question as to whether and when there has been a termination of such
employment, and the cause of such termination, shall be determined by the
Committee and its determination shall be final. Unless otherwise provided in a
written employment agreement, nothing herein shall modify the at-will nature of
the employment relationship between Employee and the Company.
-5-
9. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, UNITED STATES OF AMERICA,
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Employee has executed
this Agreement, all as of the day and year first above written.
BMC SOFTWARE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. VICE PRESIDENT, ADMINISTRATION
------------------------------------
EMPLOYEE
-6-