XATA CORPORATION
EXHIBIT 10.44
XATA CORPORATION
THIS MATCHING RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”) is made effective as of
October 1, 2006 by and between XATA Corporation, a Minnesota corporation (the “Company”) and Xxxx
X. Xxxxxxxx (“Employee”).
Recitals
The Company and the Employee have entered into an Executive Employment Agreement effective as
of October 1, 2006 (the “Employment Agreement”). The Company desires to afford the Employee an
opportunity to acquire shares of its common stock, par value $.01 per share (the “Shares”) in an
amount equal to the number of shares of common stock purchased by Employee from the Company at the
time of commencement of his employment, as more fully disclosed and provided in the Employment
Agreement. For purposes of this Agreement, employment by any subsidiary of the Company is
equivalent to employment by the Company. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Employment Agreement.
ACCORDINGLY, in consideration of the premises and of the mutual covenants and agreements
contained herein, the Company and the Employee hereby agree as follows:
1. Restricted Stock Award. Subject to the terms and provisions of this Agreement and
the Employment Agreement, the Company hereby grants to Employee as of the date hereof a restricted
stock award for ninety two thousand five hundred and ninety-three (92,593) Shares (the “Award
Shares”). For purposes of Section 16 under the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, the grant date for the Award Shares shall be the effective
date hereof; provided, however, all of Employee’s right, title and interest in and to the Award
Shares shall be subject to Section 2 below.
2. Vesting of Award Shares.
(a) Subject to Sections 2(b), (c), (d), (e) and (f) below, all of Employee’s right, title and
interest in and to the Award Shares is and shall be contingent upon and subject to the continued
full-time employment of Employee by the Company during the vesting periods (the “Vesting Periods”).
On the last day (the “Vesting Date”) of each Vesting Period, and provided that Employee is then a
full time employee of the Company, Employee shall be deemed to be fully vested without restriction
in all of the Award Shares covered by that Vesting Period.
| Award Shares | Grant Date | Vesting Date | Shares Vested | |||
92,593
|
October 1, 2006 | September 30, 2007 | All Shares |
(b) In the event that Employee voluntarily resigns from Employee’s full-time employment
with the Company for a reason other than Good Reason or is terminated by the
Company for Cause
during any Vesting Period, Employee shall forfeit all right, title and interest in and to all
unvested Award Shares.
(c) In the event that Employee is terminated from employment by the Company prior to the end
of any Vesting Period because the Employee has died or become Disabled, Employee shall thereupon
become immediately vested without restriction in all of the Award Shares covered by the shorter of
the next three (3) months immediately following the Date of Termination and that unexpired Vesting
Period to the same extent as though Employee had remained employed through the end of such three
(3) month period or unexpired Vesting Period, respectively. Employee shall forfeit all right,
title and interest in and to all other unvested Award Shares.
(d) In the event that Employee is terminated from employment by the Company without Cause
(other than in the event of death or Disability, it being understood that a purported termination
for Disability or for Cause which is disputed and finally determined not to have been a proper
termination for Cause or Disability shall be a termination by the Company without Cause) or if
Employee terminates his employment for Good Reason (in each case, in the absence of a Change in
Control), Employee shall thereupon become immediately vested without restriction in all of the
Award Shares that would have vested pursuant to Section 2(a) above over the then remaining term of
the Employment Agreement or, if longer, the twelve (12) month period immediately following the Date
of Termination had Employee remained employed through the end of such term or twelve (12) month
period, respectively.
(e) Notwithstanding anything to the contrary in Section 2 (a), (b), (c) or (d) above, in the
event that the Company consummates a Change of Control, Employee shall thereupon become immediately
vested without restriction in one-half of the number of unvested Award Shares as of the date of the
Change of Control (comprising those Shares scheduled next to vest), and the remaining unvested
Award Shares shall continue to vest in accordance with this Section 2.
(f) Notwithstanding anything to the contrary in this Section 2, in the event that (i) upon or
within six months before a Change of Control or within two years following a Change of Control
either (x) the Company terminates Employee’s employment without Cause (other than in the event of
death or Disability, it being understood that a purported termination for Disability or for Cause
which is disputed and finally determined not to have been proper termination for Cause or
Disability shall be a termination by the Company without Cause) or (y) Employee terminates his
employment for Good Reason, or (ii) the Chairman of the Board of the Company immediately prior to
the consummation of a Change of Control ceases to be the Chairman of the Board of the Company, or
any successor thereto, immediately following the Change of Control and Employee terminates his
employment, then Employee shall thereupon become immediately vested without restriction in all of
the unvested Award Shares.
3. Restriction on Transfer. No interest in unvested Award Shares shall be
transferable by any means (e.g. sale, assignment, pledge, gift).
4. Issuance and Delivery of Certificates for Award Shares.
(a) As soon as practicable after the execution hereof, the Company shall issue in Employee’s
name, and retain in the custody of the Company pursuant to Section 4(b) below, a certificate for
paid-up, non-assessable Shares for the full number of the Award Shares. The Company shall place a
stop transfer order on its stock records with respect to the Award Shares, and the certificate for
the Award Shares shall contain the following legend:
“The securities evidenced by this certificate were issued pursuant
to a Restricted Stock Award Agreement between the holder and the
issuer dated (the “Agreement”), and no sale, offer
to sell, transfer, pledge or other hypothecation of these securities
may be made so long as the securities remain subject to the
restrictions set forth in the Agreement.”
(b) Employee acknowledges and agrees that the Company shall retain the custody of the
certificates for the Award Shares, and that the certificates will not be delivered to Employee
except as provided in Section 4(c) below. Upon execution of this Agreement, Employee has also
executed and delivered to the Company an Assignment Separate from Certificate, authorizing the
Company as attorney to transfer the certificate for the Award Shares to the Company upon forfeiture
pursuant to this Agreement.
(c) As soon as reasonably practicable after termination of the transfer restrictions pursuant
to Section 3 above, the Company will deliver a certificate for the Award Shares, adjusted as
necessary for the actual number of Award Shares in which Employee has become vested, without the
restrictive legend set forth in Section 4(a). Delivery of the certificate under this Section 4(c)
shall be made at the principal office of the Company to the person or persons entitled thereto
during ordinary business hours of the Company not more than thirty (30) days after the vesting of
the Award Shares, or at such time, place and manner as may be agreed upon by the Company and the
person or persons entitled to the Award Shares.
5. Rights and Restrictions as a Shareholder. During the Employee’s continued full
time employment with the Company or its subsidiaries Employee shall have full voting rights,
dividend rights and other rights as a shareholder with respect to all vested (but not unvested)
Award Shares. So long as the Company retains custody of the certificates for the Award Shares,
Employee shall not (i) sell, offer to sell, transfer, pledge or hypothecate any record or
beneficial interest in the Award Shares, other than to the Company as provided in this Agreement or
(ii) grant any proxies or voting rights with respect to the Award Shares, except to the Company.
The Employee hereby grants an irrevocable proxy to the chief operating officer and the chief
financial officer of the Company (the act of one of them being sufficient), which is coupled with
an interest as described in Minnesota Statutes § 302.449, to vote all unvested Award Shares,
subject to direction by the Board of Directors of the Company, on any and all matters put to a vote
of the shareholders of the Company. Upon vesting of the Award Shares pursuant to Section 2 above,
Employee (or, in the event of the death of Employee, the person or persons then entitled to the
Award Shares or any portion thereof) shall have full voting rights, dividend rights and other
rights as a shareholder with respect to such Award Shares.
6. Stock Dividends, Stock Splits and Other Adjustments. During the time that the
Award Shares are subject to the vesting restrictions set forth in Section 2 above, if a stock
dividend or stock split is declared on the outstanding Shares of the Company, or if outstanding
Shares of the Company are changed into or exchanged for a different number or kind of shares or
other securities of the Company or of another corporation by reason of any reorganization, merger,
consolidation, recapitalization, reclassification, stock split, reverse stock split, combination of
shares or dividends payable in capital stock, appropriate adjustment shall be made in the number
and kind of shares as to which the Award Shares relate (the “Adjusted Shares”), to the end that the
proportionate interest of Employee, as a shareholder of the Company with respect to the Award
Shares when and if vested, shall be maintained as before the occurrence of such event. As used
herein, the term Award Shares include any corresponding Adjusted Shares. The Company shall retain
the custody of each certificate for the Adjusted Shares pursuant to Section 4(b) above.
7. Withholding. Employee shall pay on a timely basis all withholding and payroll
taxes and/or excise taxes required by law with respect to the Award Shares (collectively,
“Withholding Taxes”). The delivery of any Award Shares (or portion thereof, if any) to Employee
under this Agreement shall be subject to and conditioned upon Employee’s payment of all applicable
Withholding Taxes. Employee hereby authorizes the Company to withhold such Withholding Taxes from
his salary and/or commissions.
8. Investment Representations. Unless a registration statement under the Securities
Act of 1933, as amended, is in effect with respect to the Award Shares on the date of issuance of
the Award Shares, Employee will be deemed to have made the following investment representation on
the date of issuance:
Employee intends to acquire the Award Shares for Employee’s own
account for investment purposes and not with a view to resale in
connection with any distribution thereof. Employee has no present
intention, and is not a party to any agreement or arrangement, to
resell or dispose of any of the Award Shares. Employee understands
and agrees that the Company has no obligation to register the Award
Shares and that the Award Shares will not be registered under the
Securities Act of 1933, as amended (the “Act”), or under applicable
state securities laws, on the grounds that the Award Shares are
being issued in a transaction not involving a public offering and
that, consequently, such transaction is exempt from registration
under the Act and the state securities laws. Employee further
understands and agrees that the Award Shares may not be sold,
transferred or otherwise disposed of except pursuant to an effective
registration statement or appropriate exemption from registration
under the foregoing securities acts. Accordingly, Employee
acknowledges that the Company is not
required to recognize any transfer of the Award Shares if such
transfer would result in violation of any federal or state law
regarding the offering or sale of securities. The
Company may place
a stop transfer order on its stock records with respect to the Award
Shares, and the certificate(s) for the Award Shares may contain
substantially the following legend:
“The securities evidenced by this certificate have not been
registered either under any applicable federal law and rules or
applicable state law and rules. No sale, offer to sell, or transfer
of these securities may be made unless a registration statement
under the Securities Act of 1933, as amended, and any applicable
state law with respect to such securities is then in effect or an
exemption from the registration requirements of such law is then, in
fact, applicable to such securities.”
9. Legend on Shares if Registered. If Employee is deemed an affiliate of the Company,
the Company may place a stop transfer order on its stock records with respect to the Award Shares,
and the certificate(s) for the Award Shares (or a portion thereof) may contain substantially the
following legend:
“The securities evidenced by this certificate were issued to an
affiliate of the issuer, and the resale of such securities is
subject to the restrictions of Rule 144 under the Securities Act of
1933, as amended, pertaining to shares held by affiliates.”
10. Expenses. Nothing contained in this Agreement shall be construed to impose any
liability on the Company in favor of the Employee for any cost, loss or expense the Employee may
incur in connection with, or arising out of any transaction under, this Agreement.
11. No Employment Agreement. Nothing in this Agreement shall be construed to
constitute or be evidence of an agreement or understanding, express or implied, on the part of the
Company to employ the Employee on any terms or for any specific period of time.
12. Nontransferability. The rights of the Employee under this Agreement shall not be
assigned, transferred, pledged or otherwise hypothecated by the Employee other than by will or the
laws of descent and distribution.
13. Fractional Shares. No fraction of a share shall be deliverable pursuant to this
Agreement, but in the event any adjustment hereunder of the number of the Award Shares shall cause
such number to include a fraction of a share, such fraction shall be adjusted to the nearest
smaller whole number of shares.
14. Complete Agreement, Amendment. This Agreement and the Employment Agreement, which
by this reference is hereby incorporated herein in its entirety, contain the entire agreement
between the Company and Employee with respect to the transactions contemplated
hereby. Any modification of the terms of this Agreement must be in writing and signed by each of
the parties. Notwithstanding the foregoing, this Agreement may be modified by the Employment
Agreement (or any amendment thereto) between the parties.
15. Governing Law. Any issue related to the formation, execution, performance and
interpretation of this Agreement shall be governed by the laws of the State of Minnesota.
16. Headings. The section and subsection headings used in this Agreement are for
convenient reference and are not a part of this Agreement.
| XATA CORPORATION | EMPLOYEE | |||||
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