SiliconBeat

In an attempt to ensure shareholder approval of its postponed proposal to extend the terms of its current stock incentive plan today, Keynote System’s chief executive Umang Gupta agreed yesterday to cancel an option on 400,000 shares granted to him in November 2007.

At its shareholder meeting last week, the proposal was the only measure that failed to receive a majority of votes cast after shareholder advisory firm RiskMetrics recommended a “no” vote on the proposal. RiskMetrics cited the relatively large number of outstanding stock options the company has in its plan, which was first adopted in 1999 and is set to expire in June, and which has 562,590 shares left in it.

The annual meeting was to technically reconvene today at 10 a.m. at the company’s San Mateo headquarters for the purpose of finishing voting on the proposal.