1
EXHIBIT 10.6
OPTIONEE: RICHARD P. GARDNER
[BINDVIEW LOGO]
NONQUALIFIED STOCK
OPTION AGREEMENT
<Table>
- -----------------------------------------------------------------
NUMBER OF SHARES: Omnibus Incentive Plan:
372,069 shares
Incentive Stock Option Plan:
137,931 shares
1997 Incentive Plan:
315,000 shares
- -----------------------------------------------------------------
GRANT DATE: May 1, 2001
- -----------------------------------------------------------------
PLAN: Omnibus Incentive Plan
- -----------------------------------------------------------------
EXPIRATION DATE: Grant Date plus ten (10) years
- -----------------------------------------------------------------
STRIKE PRICE: $ 2.90
- -----------------------------------------------------------------
PRIOR First Amended and Restated Nonqualified
AGREEMENT: Stock Option Agreement of BindView
Development Corporation Omnibus
Incentive Plan between the parties
dated May 1, 2000, for 1,650,000 shares
- -----------------------------------------------------------------
- -----------------------------------------------------------------
VESTING SCHEDULE
(FOUR-YEAR VESTING)
- -----------------------------------------------------------------
NO. OF SHARES
EVENT DATE VESTED
- -----------------------------------------------------------------
Vesting May 1, 2001 None
Start Date:
- -----------------------------------------------------------------
First Vesting Date August 1, 2001 one-sixteenth
(1/16) of the
full number of
Shares
- -----------------------------------------------------------------
Subsequent vesting each three (3) an additional
dates months after the one-sixteenth
First Vesting Date (1/16) of the
full number of
Shares, until
vested as to 100%
of the Shares
- -----------------------------------------------------------------
</Table>
BindView Corporation ("BINDVIEW" or "US") hereby grants to the
"OPTIONEE" identified above ("YOU") the option to purchase from BindView up to
but not exceeding in the aggregate the number of shares of common stock, no par
value per share, of BindView (the "SHARES") at the "STRIKE PRICE" per share, as
set forth above. Because such option covers multiple Shares, it is referred to
herein in plural form as the "OPTIONS." The grant of the Options is subject to
the terms and conditions of this "AGREEMENT" and to the terms and conditions of
the Omnibus Incentive Plan ( "PLAN") as amended by BindView's Board of Directors
("BOARD") from time to time, which is incorporated herein by reference, and a
copy of which will be provided to you upon request. All Section references are
to sections of this Agreement except as otherwise indicated. [BindView
Corporation is a registered assumed name of BindView Development Corporation.]
1. The Options are granted on the same terms and conditions as set
forth in the Prior Agreement (which is incorporated herein by reference). In the
case of any inconsistency between this Agreement and the Prior Agreement, the
Prior Agreement shall control, except for the following:
a. the Options shall be for the Shares and at the Strike Price
set forth above;
b. the Options shall be for a term commencing on the "GRANT
DATE" and ending on the "EXPIRATION DATE," each as set forth above, unless the
Options are terminated earlier by reason of termination of your employment, in
which case the applicable provisions of the Plan will control; and
c. the Options shall vest and become exercisable as provided
in the "VESTING SCHEDULE" above (subject to any accelerated-vesting provisions
in the Prior Agreement, which shall control to the extent applicable in
accordance with their terms).
2. This Agreement does not amend or modify the Prior Agreement in
respect of the option grant referred to therein.
3. Nothing in this Agreement shall be deemed (i) to constitute an
employment contract, express or implied, nor (ii) to impose any obligation on us
or any of our affiliates to employ you at all or on any particular terms, nor
(iii) to amend any other agreement between you and us, nor (iv) to impose any
obligation on you to work for us, nor (v) to limit our right to terminate your
employment for any reason, with or without cause, nor (vi) to limit your right
to resign from your employment.
Executed to be effective as of the Grant Date.
BINDVIEW CORPORATION, BY:
- ----------------------------------
Eric J. Pulaski, Chairman and
Chief Technology Officer
The Option has been accepted by the above-named Optionee, subject to the terms
and provisions of the Plan and of this Agreement, by which the Optionee agrees
to be bound
X __________________________________
RICHARD P. GARDNER
2
OPTIONEE: RICHARD P. GARDNER - 1,650,000 SHARES
FIRST AMENDED AND RESTATED
NONQUALIFIED STOCK OPTION AGREEMENT
OF
BINDVIEW DEVELOPMENT CORPORATION
OMNIBUS INCENTIVE PLAN
BACKGROUND RECITATIONS
A. By resolution dated January 5, 2000, the Board of Directors
("Board") of BindView Development Corporation (the "Company") approved the
contingent grant, to the "Optionee" identified above, of options (the "Prior
Options") to purchase 1,000,000 shares of the Company's common stock at a strike
price of $46.75 per share and an additional 250,000 shares at a strike price of
$80 per share, respectively.
B. Such approval by the Board was expressly given subject to a
condition subsequent, namely the subsequent approval by the shareholders of the
Company of an increase in the number of shares of common stock of the Company
reserved and authorized for issuance under the BindView Development Corporation
Omnibus Incentive Plan (the "Plan").
C. On January 5, 2000, the Optionee and the chairman of the Board
executed two agreements dated January 5, 2000 ("Prior Option Agreements"), which
respectively provided for the grant of the Prior Options. The Prior Option
Agreements were each made subject to the Plan, which was incorporated by
reference into each Prior Option Agreement.
D. The Plan provides that stock option grants are made either by the
Board of Directors of the Company ("Board") or by the Compensation Committee or
other committee of the Board consisting solely of at least two members each of
whom are Non-Employee Directors and Outside Directors.
E. The Prior Option Agreements therefore were entered into subject to
the condition subsequent set forth in the Board's approval referred to in
paragraph B above, namely the subsequent shareholder approval referred to in
that paragraph.
F. As of the date hereof, the subsequent shareholder approval referred
to in paragraph B above has not occurred. The Company's grant of the Prior
Options therefore remains a contingent grant.
G. By resolution dated May 1, 2000, the Compensation Committee of the
Board approved the Company's entering into an agreement with the Optionee to
amend the Prior Option Agreements and to exchange the Optionee's
contingently-granted Prior Options for a new option (also contingently granted)
to purchase common stock. Such agreement is set forth in this First Amended and
Restated Nonqualified Option Agreement (this "Agreement").
H. This Agreement constitutes a single combined and consolidated
amendment and restatement of both of the Prior Option Agreements, both of which
are superseded hereby, and both of which the parties agree may be marked with an
appropriate legend to that effect.
GRANT
The Company hereby grants to the Optionee, subject to the condition
subsequent set forth below, the option ("New Option") to purchase from the
Company up to but not exceeding in the aggregate ONE MILLION SIX HUNDRED
THOUSAND AND FIFTY (1,650,000) shares of common stock, no par value per share,
of the Company (the "Shares") at the "Strike Price" of TEN DOLLARS ($10.00) per
Share, effective May 1, 2000 (the "Grant Date"). The New Option is granted
subject to the terms and conditions of this Agreement and to the
PAGE 1 OF 7
3
OPTIONEE: RICHARD P. GARDNER - 1,650,000 SHARES
terms and conditions of the Plan. The New Option is also granted subject to and
conditioned on the shareholder approval referred to in paragraph B above (such
approval is scheduled to be voted on by the shareholders at the Company's annual
meeting on May 5, 2000). If the outstanding shares of common stock or other
securities of the Company, or both, for which the New Option is then exercisable
shall at any time be changed or exchanged by declaration of a stock dividend,
stock split, combination of shares, or recapitalization, the number and kind of
shares of common stock or other securities subject to the Plan or subject to the
New Option and the Strike Price, shall be appropriately and equitably adjusted
so as to maintain the proportionate number of shares or other securities without
changing the aggregate Strike Price. All Section references are to sections of
this Agreement except as otherwise indicated.
1. TERM. The New Option shall expire on January 5, 2010 unless such New
Option is terminated earlier by reason of the Optionee's termination of
employment as provided in the Plan and in this Agreement.
2. VESTING. Subject to the acceleration provisions of Section 7, the New
Option shall vest and become exercisable as to twenty percent (20%) of its
associated Shares on January 5, 2001, and an additional 20% on each anniversary
thereof until such New Option becomes fully vested.
3. EXERCISE. The Optionee is entitled to exercise the New Option granted by
this Agreement as to all or any part of the Shares as to which such New Option
has vested.
4. NONCOMPETITION. As a condition to, and in consideration of, the
Company's granting to the Optionee the New Option to acquire securities of the
Company, and giving the Optionee access to certain confidential and proprietary
information, as well as special training and knowledge, which the Optionee
recognizes is valuable to the Company and, therefore, its protection and
maintenance constitutes a legitimate interest to be protected by the provisions
of this Section 4 as applied to the Optionee and all other optionholders
similarly situated to the Optionee, the Optionee hereby agrees as follows:
(a) For "a reasonable period of time" after termination of the
Optionee's employment with the Company and within "a reasonable territory,"
defined in Sections 4(b) and 4(c), the Optionee will not for any reason,
directly or indirectly, by any means or device, for himself or on behalf of or
in conjunction with any person, partnership or corporation (i) compete with the
Company in the development or marketing of systems-management and/or
security-management software products which manage distributed client/server
networks operating in the Microsoft Windows NT, Novell NetWare, or UNIX
(including without limitation LINUX) environments, (ii) solicit any customers of
the Company to purchase the products or services which, as of the date of such
termination, would compete directly or indirectly, with those which were offered
by the Company or were reasonably foreseeable to be offered by the Company
during such period of time or (iii) work on or develop, directly or indirectly,
for any competitor of the Company any programs or software similar to those upon
which the Optionee worked or assisted during the Optionee's employment with the
Company. The aforementioned period of time specified in this paragraph will not
run during any period when the Optionee is committing any act prohibited by this
Agreement.
(b) As used in this Agreement, "a reasonable period of time" means
one year, except as otherwise provided herein. If the Optionee violates the
covenants set forth in Section 4(a), and the Company brings a legal action for
injunctive or other relief, the Company shall not be deprived of the benefit of
the full reasonable period of time. Accordingly, the covenants set forth in the
preceding paragraph shall be deemed to have a duration of the reasonable period
of time, with such period commencing upon the later of (i) the termination of
the Optionee's employment with the Company and (ii) if the Company brings a
action to enforce the covenants contained in Section 4(a), the date of entry by
a court of competent jurisdiction of a final judgment enforcing such covenants.
PAGE 2 OF 7
4
OPTIONEE: RICHARD P. GARDNER - 1,650,000 SHARES
(c) As used in this Agreement, "a reasonable territory", in view of
the international nature of the markets in which the Company competes, means the
United States of America and any foreign market in which the Company's products
are sold or are reasonably foreseeable to be sold during the reasonable period
of time.
(d) The covenants set forth in Section 4(a) will accrue to the
benefit of the Company, regardless of the reason(s) for the termination of the
Optionee's employment with the Company, provided, however, that in the event of
termination following a Change of Control or for Good Reason, the term
"reasonable period of time" will mean six (6) months.
(e) The Optionee acknowledges that the obligations of this Agreement
are directly related to the grant of the New Option by the Company and are
necessary to protect the Company's legitimate business interests. The Optionee
acknowledges that the Company's need for the covenants set forth in this
Agreement is based on the following: (i) the substantial time, money and effort
expended and to be expended by the Company in developing technical designs,
computer program source codes, marketing plans and similar confidential
information; (ii) the fact that the Optionee will be personally entrusted with
the Company's confidential and proprietary information; (iii) the fact that,
after having access to the Company's technology and other confidential
information, the Optionee could become a competitor of the Company; and (iv) the
highly competitive nature of the Company's industry, including the premium that
competitors of the Company place on acquiring proprietary and competitive
information.
(f) Notwithstanding the foregoing, the Optionee may acquire an
ownership interest, directly or indirectly, of not more than 5% of the
outstanding securities of any corporation which is engaged in a business
competitive with the Company and which is listed on any recognized securities
exchange or traded in the over the counter market in the United States;
provided, that such investment is of a totally passive nature and does not
involve the Optionee devoting time to the management or operations of such
corporation.
5. NONQUALIFIED NEW OPTION. Each New Option is a nonqualified stock option
that is not intended to be governed by Section 422 of the Internal Revenue Code
of 1986, as amended.
6. ACCEPTANCE. The Optionee in accepting the New Option accepts and agrees
to be bound by all the terms and conditions of this Agreement and of the Plan
which pertain to non-qualified stock options granted under the Plan.
7. ACCELERATION OF VESTING.
(a) As to any New Option granted under this Agreement that has not
yet vested as to any portion of its associated Shares (i.e., the vesting date(s)
has not yet been reached as to that portion of the Shares), the unvested portion
of such New Option shall be accelerated and shall automatically vest and become
fully exercisable (referred to below as becoming "fully vested," as follows.
(1) ACCELERATION DUE TO CERTAIN TERMINATIONS OF EMPLOYMENT. As
of the effective date of any termination of the Optionee's employment with the
Company ("Termination Date"), any unvested portion of the New Option that had
been granted by this Agreement on or before the Termination Date shall become
fully vested as to a portion of any remaining unvested portion of the Shares
associated with such New Option, as set forth in the table below:
PAGE 3 OF 7
5
OPTIONEE: RICHARD P. GARDNER - 1,650,000 SHARES
<Table>
<Caption>
REMAINING UNVESTED PORTION
REASON FOR TERMINATION OF EMPLOYMENT THAT BECOMES FULLY VESTED
----------------------------------------------------------------------------------
The Optionee's death or disability As stated in the Plan
----------------------------------------------------------------------------------
By Gardner, for Good Reason, other than in 50%
connection with a Change of Control (defined
below)
----------------------------------------------------------------------------------
By Gardner, following a Change of Control 100%
(defined below)
----------------------------------------------------------------------------------
By Gardner, other than for Good Reason None
----------------------------------------------------------------------------------
By the Company, for Cause (defined below) None
----------------------------------------------------------------------------------
By the Company, other than for Cause, except in 50%
connection with a Change of Control
----------------------------------------------------------------------------------
By the Company, other than for Cause, in As provided in Section 7(a)(2)
connection with a Change of Control
----------------------------------------------------------------------------------
</Table>
HYPOTHETICAL EXAMPLE: Suppose that (i) the New Option had previously
become vested as to 40% of the associated Shares, and (ii) the
Optionee's employment with the Company is terminated by him for Good
Reason. Upon such termination, the New Option will become fully vested
as to an additional 30% (i.e., 100% minus 40%, times one-half) of the
associated Shares.
As used herein:
(A) "Cause" means either (i) the willful commission by the Optionee
of an act constituting a dishonest or other act of material misconduct, or
conviction of a fraudulent act or a felony under the laws of any state or of the
United States to which the Company or the Optionee is subject, and such act
results (or is intended to result directly or indirectly) in the Optionee's
substantial gain or personal enrichment to the material and demonstrable
detriment of the Company; or (ii) the material breach by the Optionee of any
representation or covenant made in his employment agreement with the Company
("Employment Agreement"); or (iii) the commission by the Optionee of repeated
breaches of the Employment Agreement, where the Company notifies the Optionee in
writing of each such breach, and prior to termination, the Company gives the
Optionee thirty (30) days advance written notice of its intention to terminate
the Optionee's employment for Cause at the end of such thirty-day period. For
purposes of clause (i) of the previous sentence, any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Board or
based upon the advice of counsel for the Company shall be conclusively presumed
to be done, or omitted to be done, by the Optionee in good faith and in the best
interests of the Company.
(B) "Good Reason" means the occurrence of any of the following,
other than with the Optionee's prior written consent: (i) any removal of the
Optionee from, or any failure to reelect or to reappoint the Optionee to, the
office of Chief Executive Officer or Director of the Company; (ii) a reduction
by the Company in the amount of, or the Company's failure to pay, the Optionee's
base salary at the time and in the manner and amount specified in his Employment
Agreement; (iii) a reduction by the Company in the amount of, or the Company's
failure to pay, any Bonus required to be paid to the Optionee at the time and in
the manner and amount specified in his Employment Agreement; or (iv) the failure
by the Company to comply with its obligations under Section 8 of this Agreement
(concerning assumption of this Agreement by any successor or assign of the
Company).
PAGE 4 OF 7
6
OPTIONEE: RICHARD P. GARDNER - 1,650,000 SHARES
(C) A "Change of Control" of the Company shall be deemed to have
occurred if, after the effective date written below:
(i) a report on Schedule 13D or Schedule 14D-1 (or any successor
schedule, form or report) shall be filed with the Commission pursuant to the
Exchange Act and that report discloses that any person (within the meaning of
Section 13(d) or Section 14(d)(2) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by the
Company (or one of its subsidiaries), is the beneficial owner (as that term is
defined in Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act), directly or indirectly, of 20 percent or more of the outstanding
Voting Stock;
(ii) any person (within the meaning of Section 13(d) or Section
14(d)(2) of the Exchange Act), other than the Company (or one of its
subsidiaries) or any employee benefit plan sponsored by the Company (or one of
its subsidiaries), shall purchase securities pursuant to a tender offer or
exchange offer to acquire any Voting Stock (or any securities convertible into
Voting Stock) and, immediately after consummation of that purchase, that person
is the beneficial owner (as that term is defined in Rule 13d-3 or any successor
rule or regulation promulgated under the Exchange Act), directly or indirectly,
of 20 percent or more of the outstanding Voting Stock (such person's beneficial
ownership to be determined, in the case of rights to acquire Voting Stock,
pursuant to paragraph (d) of Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act);
(iii) the consummation of:
(x) a merger, consolidation or reorganization of the
Company with or into any other person if (a) the Company is not the surviving
entity or (b) as a result of such merger, consolidation or reorganization, 50
percent or less of the combined voting power of the then-outstanding securities
of such other person immediately after such merger, consolidation or
reorganization are held in the aggregate by the holders of Voting Stock
immediately prior to such merger, consolidation or reorganization;
(y) any sale, lease, exchange or other transfer of all or
substantially all the assets of the Company and its consolidated subsidiaries to
any other person if as a result of such sale, lease, exchange or other transfer,
50 percent or less of the combined voting power of the then-outstanding
securities of such other person immediately after such sale, lease, exchange or
other transfer are held in the aggregate by the holders of Voting Stock
immediately prior to such sale, lease, exchange or other transfer; or
(z) a transaction immediately after the consummation of
which any person (within the meaning of Section 13(d) or Section 14(d)(2) of the
Exchange Act) would be the beneficial owner (as that term is defined in Rule
13d-3 or any successor rule or regulation promulgated under the Exchange Act),
directly or indirectly, of more than 50 percent of the outstanding Voting Stock;
(iv) the stockholders of the Company approve the dissolution of
the Company; or
(v) during any period of 12 consecutive months, the individuals
who at the beginning of that period constituted the Board of Directors shall
cease to constitute a majority of the Board of Directors, unless the election,
or the nomination for election by the Company's stockholders, of each director
of the Company first elected during such period was approved by a vote of at
least a two-thirds of the directors of the Company then still in office who were
directors of the Company at the beginning of any such period.
PAGE 5 OF 7
7
OPTIONEE: RICHARD P. GARDNER - 1,650,000 SHARES
(D) "Voting Stock" means shares of capital stock of the Company the
holders of which are entitled to vote for the election of directors, but
excluding shares entitled to so vote only upon the occurrence of a contingency
unless that contingency shall have occurred.
(2) ACCELERATION DUE TO CHANGE OF CONTROL. In the event of a Change of
Control, any unvested portion of the New Option as of the effective date of such
Change of Control shall become fully vested unless the Optionee remains Chief
Executive Officer and a member of Board of Directors (i) of the Company, or (ii)
of the surviving entity in any merger, consolidation or reorganization of the
Company with or into any other person in which the Company is not the surviving
entity.
(b) ACCELERATION SAVINGS CLAUSE.
(1) Notwithstanding the foregoing, acceleration shall not occur if all
of the following occur: (i) a contemplated Change of Control would occur prior
to the date two (2) years following the Grant Date; (ii) such potential
acceleration of vesting (and exercisability) would by itself result in a
contemplated Change of Control that would otherwise be eligible to be accounted
for as a "pooling of interests" accounting transaction to become ineligible for
such accounting treatment; and (iii) the potential acquiror of the Company
desires to account for such contemplated Change of Control as a "pooling of
interests" transaction. The restriction on acceleration in this Section 7(b)(1)
is referred to as the "Acceleration Restriction."
(2) The Acceleration Restriction shall be deemed inoperative with
respect to a contemplated Change of Control if by itself it would result in such
Change of Control being ineligible to be accounted for as a "pooling of
interests" accounting transaction.
(3) The applicability of the Acceleration Restriction with respect to a
particular Change of Control shall not limit any potential acceleration of
vesting (and exercisability) with respect to any subsequent Change of Control.
Likewise, the application of the Acceleration Restriction to any such subsequent
Change of Control shall be determined without regard to the applicability of
such restrictions to any prior Change of Control.
(4) Any and all accounting issues arising under this Section 7(b) shall
be determined by the Company's independent public accountants applying generally
accepted accounting principles.
8. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
upon (i) the Company and its successors and assigns, and (ii) the Optionee and
his heirs and legal representatives. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
9. CANCELLATION OF PRIOR OPTIONS. The parties agree that the
contingently-granted Prior Options are hereby irrevocably canceled and forfeited
in favor of the New Option granted by this Agreement.
PAGE 6 OF 7
8
OPTIONEE: RICHARD P. GARDNER - 1,650,000 SHARES
Executed to be effective as of May 1, 2000.
BINDVIEW DEVELOPMENT CORPORATION, BY: The New Option has been accepted by
the undersigned, subject to the terms
and provisions of the Plan and of this
Agreement.
- ---------------------------------- --------------------------------------
Eric J. Pulaski, Chairman of the Richard P. Gardner
Board, on behalf of the Company
and the Board
PAGE 7 OF 7