Exhibit 10.18
BORLAND SOFTWARE
CORPORATION
AUTOMATIC STOCK OPTION
AGREEMENT
RECITALS
A. The Corporation has implemented
an automatic option grant program under the Plan pursuant to which
eligible non-employee members of the Board will automatically
receive special option grants at periodic intervals over their
period of Board service in order to provide such individuals with a
meaningful incentive to continue to serve as members of the
Board.
B. Optionee is an eligible
non-employee Board member, and this Agreement is executed pursuant
to, and is intended to carry out the purposes of, the Plan in
connection with the automatic grant of an option to purchase shares
of Common Stock under the Plan.
C. All capitalized terms in this
Agreement shall have the meaning assigned to them in the attached
Appendix.
NOW, THEREFORE
, it is hereby agreed as
follows:
1. Grant of Option .
The Corporation hereby grants to Optionee, as of the Grant Date, a
Non-Statutory Option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be
purchasable from time to time during the option term specified in
Paragraph 2 at the Exercise Price.
2. Option Term . This
option shall have a term of ten (10) years measured from the Grant
Date and shall accordingly expire at the close of business on the
Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. Limited Transferability
.
(a) This option may be assigned in
whole or in part during Optionee’s lifetime to one or more
members of Optionee’s family or to a trust established for
the exclusive benefit of one or more such family members or to
Optionee’s former spouse, to the extent such assignment is in
connection with the Optionee’s estate plan or pursuant to a
domestic relations order. The assigned portion shall be exercisable
only by the person or persons who acquire a proprietary interest in
the option pursuant to such assignment. The terms applicable to the
assigned portion shall be the same as those in effect for this
option immediately prior to such assignment.
(b) Should the Optionee die while
holding this option, then this option shall be transferred in
accordance with Optionee’s will or the laws of inheritance.
However, Optionee may designate one or more persons as the
beneficiary or beneficiaries of this option, and this option shall,
in accordance with such designation, automatically be transferred
to such beneficiary or beneficiaries upon the Optionee’s
death while holding this option. Such
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beneficiary or beneficiaries shall take the
transferred option subject to all the terms and conditions of this
Agreement, including (without limitation) the limited time period
during which this option may, pursuant to Paragraph 5, be exercised
following Optionee’s death.
4. Exercisability/Vesting
.
(a) This option shall be immediately
exercisable for any or all of the Option Shares, whether or not the
Option Shares are at the time vested in accordance with the Vesting
Schedule, and shall remain so exercisable until the Expiration Date
or sooner termination of the option term under Paragraph 5 or
6.
(b) Optionee shall, in accordance
with the Vesting Schedule set forth in the Grant Notice, vest in
the Option Shares in a series of installments over his or her
period of Board service. The Option Shares shall, however, be
subject to accelerated vesting pursuant to the provisions of
Paragraph 5, 6 or 7, but in no event shall any additional Option
Shares vest following Optionee’s cessation of service as a
Board member.
5. Cessation of Board
Service . Should Optionee’s service as a Board member
cease while this option remains outstanding, then the option term
specified in Paragraph 2 shall terminate (and this option shall
cease to be outstanding) prior to the Expiration Date in accordance
with the following provisions:
(a) Should Optionee cease to serve
as a Board member for any reason (other than death or Permanent
Disability) while this option is outstanding, then the period
during which this option may be exercised shall be reduced to a
twelve (12)-month period measured from the date of such cessation
of Board service, but in no event shall this option be exercisable
at any time after the Expiration Date. During such limited period
of exercisability, Optionee (or the person or persons to whom this
option is transferred pursuant to a permitted transfer under
Paragraph 3) may not exercise this option in the aggregate for more
than the number of Option Shares (if any) in which Optionee is
vested on the date of his or her cessation of Board service. Upon
the earlier of (i) the expiration of such twelve (12)-month
period or (ii) the specified Expiration Date, the option shall
terminate and cease to be exercisable with respect to any vested
Option Shares for which the option has not been
exercised.
(b) Should Optionee die during the
twelve (12)-month period following his or her cessation of Board
service but while this option is outstanding, then (i) the personal
representative of Optionee’s estate or (ii) the person or
persons to whom the option is transferred pursuant to
Optionee’s will or the laws of inheritance following
Optionee’s death or to whom the option is transferred during
Optionee’s lifetime pursuant to a permitted transfer under
Paragraph 3 or (iii) the designated beneficiary or beneficiaries of
this option (as the case may be) shall have the right to exercise
this option for any or all of the Option Shares in which Optionee
is vested at the time of Optionee’s cessation of Board
service (less any Option Shares purchased by Optionee after such
cessation of Board service but prior to death). Any such
right
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to exercise this option shall terminate, and
this option shall accordingly cease to be exercisable for such
vested Option Shares, upon the earlier of (i) the expiration
of the twelve (12)-month period measured from the date of
Optionee’s cessation of Board service or (ii) the specified
Expiration Date.
(c) Should Optionee cease service as
a Board member by reason of death or Permanent Disability, then any
Option Shares at the time subject to this option but not otherwise
vested shall vest in full so that this option may be exercised for
any or all of the Option Shares as fully vested shares of Common
Stock at any time prior to the earlier of (i) the expiration
of the twelve (12)-month period measured from the date of
Optionee’s cessation of Board service or (ii) the specified
Expiration Date, whereupon this option shall terminate and cease to
be outstanding.
(d) Upon Optionee’s cessation
of Board service for any reason other than death or Permanent
Disability, this option shall immediately terminate and cease to be
outstanding with respect to any and all Option Shares in which
Optionee is not otherwise at that time vested in accordance with
the normal Vesting Schedule or the special vesting acceleration
provisions of Paragraphs 6 and 7 below.
6. Change in Control
.
(a) In the event of a Change in
Control effected during Optionee’s period of Board service,
any Option Shares at the time subject to this option but not
otherwise vested shall automatically vest so that this option
shall, immediately prior to the specified effective date for that
Change in Control, become exercisable for all of the Option Shares
as fully vested shares of Common Stock and may be exercised for any
or all of those vested shares. Immediately following the
consummation of the Change in Control, this option shall terminate
and cease to be outstanding, except to the extent assumed by the
successor corporation or its parent company or otherwise continued
in effect pursuant to the terms of the Change in Control
transaction.
(b) If this option is assumed in
connection with a Change in Control or otherwise continued in
effect, then this option shall be appropriately adjusted,
immediately after such Change in Control, to apply to the number
and class of securities which would have been issuable to Optionee
in consummation of such Change in Control had the option been
exercised immediately prior to such Change in Control, and
appropriate adjustments shall also be made to the Exercise Price,
provided the aggregate Exercise Price shall remain the same.
To the extent the actual holders of the Corporation’s
outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Change in Control transaction,
the successor corporation may, in connection with the assumption of
this option, substitute one or more shares of its own common stock
with a fair market value equivalent to the cash consideration paid
per share of Common Stock in such Corporate Transaction.
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7. Hostile Take-Over
.
(a) In the event of a Hostile
Take-Over effected during Optionee’s period of Board service,
any Option Shares at the time subject to this option but not
otherwise vested shall automatically vest so that this option
shall, immediately prior to the effective date of that Hostile
Take-Over, become exercisable for all of the Option Shares as fully
vested shares of Common Stock and may be exercised for any or all
of those vested shares.
(b) This option shall remain
exercisable for such fully vested Option Shares until the
earlier of (i) the specified Expiration Date or (ii) the
sooner termination of this option in accordance with Paragraph 5 or
6.
8. Adjustment in Option
Shares . Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting
the outstanding Common Stock as a class without the
Corporation’s receipt of consideration, appropriate
adjustments shall be made to (i) the total number and/or class of
securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
9. Stockholder Rights
. The holder of this option shall not have any stockholder rights
with respect to the Option Shares until such person shall have
exercised the option, paid the Exercise Price and become a holder
of record of the purchased shares.
10. Manner of Exercising
Option .
(a) In order to exercise this option
with respect to all or any part of the Option Shares for which this
option is at the time exercisable, Optionee (or any other person or
persons exercising the option) must take the following
actions:
(i) To the extent the option is
exercised for vested Option Shares, execute and deliver to the
Corporation a Notice of Exercise for the Option Shares for which
the option is exercised. To the extent this option is exercised for
unvested Option Shares, execute and deliver to the Corporation a
Purchase Agreement for those unvested Option Shares.
(ii) Pay the aggregate Exercise
Price for the purchased shares in one or more of the following
forms:
(A) cash or check made payable to
the Corporation, shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation’s
earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date, or through a special sale and
remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall
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concurrently provide irrevocable
instructions (i) to a brokerage firm (reasonably satisfactory to
the Corporation for purposes of administering such procedure) to
effect the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate Exercise Price
payable for the purc
