PHASE FORWARD INCORPORATED RESTRICTED STOCK UNIT AWARD AGREEMENT
EXHIBIT
99.1
PHASE
FORWARD INCORPORATED
RESTRICTED STOCK
UNIT
AWARD
AGREEMENT
| Name of Grantee: | _______________ |
|
Number
of Restricted Stock Units:
|
_______________
|
|
Grant
Date:
|
_______________
|
Phase
Forward Incorporated (the “Company”) has selected you to receive an award of
Restricted Stock Units (as defined in Appendix A)
identified above, subject to the terms set forth on Appendix A hereto and
the attached Statement of Terms and Conditions. This award of
Restricted Stock Units is an “inducement grant” for purposes of the NASDAQ
Marketplace Rules and is being made to you as an inducement material to your
entering into employment with the Company.
Please
indicate your acceptance of this Agreement by signing below and returning it by
September 5, 2008 to the Company, to the attention of Xxxxxxx Xxxxxxxxxx, who
may be reached at (000) 000-0000.
|
PHASE
FORWARD INCORPORATED
Xxxxxx
X. Xxxxxx
Chief
Executive Officer
|
I hereby
accept the award of Restricted Stock Units and agree to the terms and conditions
thereof as set forth herein and on Appendix A and
in the attached Statement of Terms and Conditions. By accepting this award,
I agree to comply with all Company policies relating to transactions in
(including without limitation purchases, sales and transfers) and retention of
Company securities with respect to any Company securities held or to be acquired
by me.
| Dated: _____________________ |
Xxxxxxx’s
Signature
Xxxxxxx’s
Name and Address
|
Appendix
A
For a Grant dated September 5, 2008
Grantee: _______________
1. Vesting
Schedule
|
Percentage of
Units
Vested
|
Vesting
Date
|
|
20%
|
September
5, 2009
|
|
60%
|
September
5, 2010
|
|
100%
|
September
5, 2011
|
2. Acceleration
Events
In the
event of a Change in Control, the Restricted Stock Units shall vest as
follows:
On the
effective date of the Change in Control, the number of units that vest shall be
determined by multiplying the number of Restricted Stock Units subject to the
Award by the product of 2.778% and the number of full months that have elapsed
since the Grant Date plus 6, reduced by the units that have previously vested
pursuant to the vesting schedule set forth above.
The
remaining Restricted Stock Units shall vest on each subsequent anniversary of
the Grant Date through the third anniversary, measured pro rata monthly from the
effective date of Change in Control over the number of months (rounded up)
remaining between the date of Change in Control and the third anniversary of the
Grant Date.
2
STATEMENT
OF TERMS AND CONDITIONS
1. Preamble. This
Statement contains the terms and conditions of an award (“Award”) of Restricted
Stock Units (“Restricted Stock Units”) made to the Grantee identified in the
Restricted Stock Unit Award Agreement attached hereto. Each
Restricted Stock Unit represents the right to receive one share of common stock
of the Company (“Stock”) on the vesting date of that unit.
2. Acceptance of
Award. The Grantee shall have no rights with respect to this
Award unless he/she shall have accepted this Award by signing and delivering to
the Company a copy of the Restricted Stock Unit Award Agreement within 30 days
of the Grant Date indicated on such agreement.
3. Restrictions and
Conditions.
(a) This
Award may not be sold, assigned, transferred, pledged or otherwise encumbered or
disposed of by the Grantee prior to vesting.
(b) Except as
set forth in Section 2 of Appendix A to the Restricted Stock Unit Award
Agreement or as may be set forth in a written agreement signed by the Grantee
and the Company, if the Grantee’s employment with the Company and its
Subsidiaries is voluntarily or involuntarily terminated for any reason
(including death) prior to vesting of Restricted Stock Units granted herein, all
unvested Restricted Stock Units shall immediately and automatically be forfeited
and returned to the Company.
(c) The
Grantee shall not have any stockholder rights, including voting or dividend
rights, with respect to the shares of Stock subject to the Award until the
Grantee becomes a record holder of those shares of Stock following their actual
issuance pursuant to Section 6 of this Agreement.
4. Vesting of Restricted
Stock
Units.
The term
“vest” as used in this Statement means the lapsing of the restrictions that are
described in this Statement with respect to the Restricted Stock
Units. The Restricted Stock Units shall vest in accordance with the
schedule set forth in Section 1 of Appendix A to the Restricted Stock Unit Award
Agreement so long as the Grantee remains an employee of the Company or a
Subsidiary on each vesting date.
Notwithstanding
the foregoing, the Grantee shall become vested in the Restricted Stock Units
prior to the vesting dates set forth in Section 1 of Appendix A to the
Restricted Stock Unit Award Agreement in certain circumstances as described in
Section 2 of Appendix A.
5. Dividend
Equivalents.
(a) If
on any date the Company shall pay any dividend on shares of Stock of the
Company, the number of Restricted Stock Units credited to the Grantee shall, as
of such date, be increased by an amount determined by the following
formula:
3
W = (X
multiplied by Y) divided by Z, where:
W = the
number of additional Restricted Stock Units to be credited to the Grantee on
such dividend payment date;
X = the
aggregate number of Restricted Stock Units credited to the Grantee as of the
record date of the dividend;
Y = the
cash dividend per share amount; and
Z = the
fair market value per share of Stock (as determined by reference to market
quotations on the Nasdaq National Market System) on the dividend payment
date.
(b) In
the case of a dividend paid on Stock in the form of Stock, including without
limitation a distribution of Stock by reason of a stock dividend, stock split or
otherwise, the number of Restricted Stock Units credited to the Grantee shall be
increased by a number equal to the product of (i) the aggregate number of
Restricted Stock Units that have been awarded to the Grantee through the related
dividend record date, and (ii) the number of shares of Stock (including any
fraction thereof) payable as dividend on one share of Stock. Any
additional Restricted Stock Units shall be subject to the vesting and
restrictions of this Agreement in the same manner and for so long as the
Restricted Stock Units granted pursuant to this Agreement to which they relate
remain subject to such vesting and restrictions, and shall be promptly forfeited
to the Company if and when such Restricted Stock Units are so
forfeited.
6. Receipt of Shares of
Stock.
(a) The
Restricted Stock Units in which the Grantee vests in accordance with the vesting
schedule set forth in Appendix A will be issuable in the form of shares of Stock
immediately upon vesting, subject to the collection of the minimum withholding
taxes in accordance with the mandatory share withholding provision of Section 9
of this Agreement.
(b) Once
a stock certificate (or electronic transfer) has been delivered to the Grantee
in respect of the Restricted Stock Units, the Grantee will be free to sell the
shares of Stock evidenced by such certificate (or electronic transfer), subject
to applicable requirements of federal and state securities law and the Company’s
xxxxxxx xxxxxxx policy.
7. Adjustment. In
the event of a stock split, stock dividend, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spinoff, splitup, or other similar change in
capitalization or event, (i) the number and class of securities and other terms
of the Award shall be adjusted by the Company (or substitute Awards may be made)
in a manner that is determined by the Company to be appropriate in order to
prevent the dilution or enlargement of the benefits intended to be made
available under the Award and (ii) any additional Restricted Stock Units held by
the Grantee as a result of such adjustment or substitution shall be subject to
vesting and restrictions of this Agreement in the same manner and for so long as
the Restricted Stock Units granted pursuant to this Agreement to which they
relate remain subject to such vesting and restrictions, and shall be promptly
forfeited to the Company in and when such Restricted Stock Units are so
forfeited.
4
8.
Acquisition of the
Company. Upon the consummation
of an Acquisition, the board of directors of the surviving or acquiring entity
(the “Applicable Board) shall, as to outstanding Awards (on the same basis or on
different bases as the Applicable Board shall specify), make appropriate
provision for the continuation of such Awards by the Company or the assumption
of such Awards by the surviving or acquiring entity and by substituting on an
equitable basis for the shares then subject to such Awards either (a) the
consideration payable with respect to the outstanding shares of Stock in
connection with the Acquisition, (b) shares of stock of the surviving or
acquiring corporation or (c) such other securities or other consideration
as the Applicable Board deems appropriate, the fair market value of which (as
determined by the Applicable Board in its sole discretion) shall not materially
differ from the fair market value of the shares of Stock subject to such Awards
immediately preceding the Acquisition. Unless otherwise determined by the
Applicable Board (on the same basis or on a different basis as the Applicable
Board shall specify), the rights of the Company relating to the Award shall
continue to apply to consideration, including cash, that has been substituted,
assumed or amended to such Award. The Company may hold in escrow all or any
portion of any such consideration in order to effectuate any continuing
restrictions.
9. Parachute Awards. If,
in connection with an Acquisition, a tax under Section 4999 of the Code
would be imposed on the Grantee (after taking into account the exceptions set
forth in Sections 280G(b)(4) and 280G(b)(5) of the Code), then the
number of Restricted Stock Units which shall become vested shall be reduced (or
delayed), to the minimum extent necessary, so that no such tax would be imposed
on the Grantee (the Awards not becoming so vested, the “Parachute Awards”); provided, however, that if
the “aggregate present value” of the Parachute Awards would exceed the tax that,
but for this sentence, would be imposed on the Grantee under Section 4999
of the Code in connection with the Acquisition, then the Restricted Stock Units
shall become immediately vested without regard to the provisions of this
sentence. For purposes of the preceding sentence, the “aggregate present value”
of the Award shall be calculated on an after-tax basis (other than taxes imposed
by Section 4999 of the Code) and shall be based on economic principles
rather than the principles set forth under Section 280G of the Code and the
regulations promulgated thereunder. All determinations required to be made under
this Section 9 shall be made by the Company.
10. Definitions. As
used in this Agreement, the following terms shall have the meanings set forth
herein:
(a) “Acquisition”
shall mean:
(i) a merger or
consolidation of the Company with or into any other corporation or other
business entity in which the Company is the surviving corporation (except one in
which the holders of capital stock of the Company immediately prior to such
merger or consolidation continue to hold at least a majority of the outstanding
securities having the right to vote in an election of the Board (“Voting Stock”)
of the Company); or any such merger or consolidation in which the Company is not
the surviving corporation;
(ii) a sale, lease,
exchange or other transfer (in one transaction or a related series of
transactions) of all or substantially all of the Company’s assets;
5
(iii) the
acquisition by any person or any group of persons (other than the Company, any
of its direct or indirect subsidiaries, or any trustee, fiduciary or other
person or entity holding securities under any employee benefit plan or trust of
the Company or any of its direct or indirect subsidiaries) acting together in
any transaction or related series of transactions, of such number of shares of
the Company’s Voting Stock as causes such person, or group of persons, to own
beneficially, directly or indirectly, as of the time immediately after such
transaction or series of transactions, 50% or more of the combined voting power
of the Voting Stock of the Company other than as a result of an acquisition of
securities directly from the Company, or solely as a result of an acquisition of
securities by the Company which by reducing the number of shares of the Voting
Stock outstanding increases the proportionate voting power represented by the
Voting Stock owned by any such person to 50% or more of the combined voting
power of such Voting Stock; and
(iv) change in the
composition of the Board following a tender offer or proxy contest, as a result
of which persons who, immediately prior to a tender offer or proxy contest,
constituted the Company’s Board shall cease to constitute at least a majority of
the members of the Board.
(b) “Board”
shall mean Board of Directors of the Company.
(c) “Change
in Control” shall mean the occurrence of any of the following
events:
(i) The
Company is merged or consolidated or reorganized into or with another
corporation or other legal person, and as a result of such merger, consolidation
or reorganization less than fifty percent (50%) of the combined voting power of
the then-outstanding securities of such surviving, resulting or reorganized
corporation or person immediately after such transaction is held in the
aggregate by the holders of the then-outstanding securities entitled to vote
generally in the election of directors of the Company (“Voting Stock”)
immediately prior to such transaction;
(ii) The
Company sells or otherwise transfers all or substantially all of its assets to
any other corporation or other legal person, and as a result of such sale or
transfer less than fifty percent (50%) of the combined voting power of the
then-outstanding securities of such corporation or person immediately after such
sale or transfer is held in the aggregate by the holders of Voting Stock of the
Company immediately prior to such sale or transfer;
(iii) Any
corporation or other legal person, pursuant to a tender offer, exchange offer,
purchase of stock (whether in a market transaction or otherwise) or other
transaction or event acquires securities representing 30% or more of the Voting
Stock of the Company, or there is a report filed on Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report), each as promulgated pursuant
to the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”),
disclosing that any “person” (as such term is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has
6
become
the “beneficial owner” (as such term is used in Rule 13d-3 under the Exchange
Act) of securities representing 30% or more of the Voting Stock of the
Company;
(iv) The
Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing under or in response to Form
8-K or Schedule 14A (or any successor schedule, form or report or item therein)
that a change in control of the Company has occurred; or
(v) If during
any period of two consecutive years, individuals who at the beginning of any
such period constitute the Board cease for any reason to constitute at least a
majority thereof, 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 majority of the directors then
still in office who were directors of the Company at the beginning of any such
period;
provided, however, that a
“Change in Control” shall not be deemed to have occurred for purposes of this
Agreement solely because (1) the Company, (2) an entity in which the Company
directly or indirectly beneficially owns 50% or more of the Voting Stock, or (3)
any Company-sponsored employee stock ownership plan or any other employee
benefit plan of the Company, either files or becomes obligated to file a report
or a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form
8-K or Schedule 14A (or any successor schedule, form or report) under the
Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock or
because the Company reports that a change in control of the Company has occurred
by reason of such beneficial ownership.
Notwithstanding
the foregoing, a Change in Control shall not be deemed to have occurred if (A)
the Company is the surviving company in a transaction described in subparagraph
10(c)(i), (B) a majority of the Board of Directors of the surviving company is
comprised of the members of the Board of the Company immediately prior to such
transaction and remains so for at least twelve (12) months thereafter, and (C)
the President and Chief Executive Officer of the surviving company immediately
after the effective date of the transaction is the President and Chief Executive
Officer of the Company immediately prior to such transaction and remains so for
at least twelve (12) months thereafter or until his/her voluntary resignation,
if earlier.
(d) “Successor”
shall mean any successor to the Company (whether direct or indirect, by Change
in Control, operation of law or otherwise), including but not limited to any
successor (whether direct or indirect, by Change in Control, operation of law or
otherwise) to, or ultimate parent entity of any successor to, the
Company.
11. Non-Transferability. This
Award is personal to the Grantee, is non-assignable and is not transferable in
any manner, by operation of law or otherwise, other than by will or the laws of
descent and distribution.
12. Tax
Withholding. The Company intends to meet its minimum tax
withholding obligation by withholding from shares of Stock to be issued to the
Grantee.
13. No Obligation to Continue
Employment. Neither the Company nor any Subsidiary is
obligated by or as a result of this Award to continue the Grantee in employment
7
and this
Award shall not interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of the Grantee at any time.
14. Conditions on Delivery of
Stock. The Company will not be obligated to deliver any shares of Stock
pursuant to this Award until (i) all conditions of the Award have been met
or removed to the satisfaction of the Company, (ii) in the opinion of the
Company’s counsel, all other legal matters in connection with the issuance and
delivery of such shares have been satisfied, including any applicable securities
laws and any applicable stock exchange or stock market rules and
regulations, and (iii) the Grantee has executed and delivered to the
Company such representations or agreements as the Company may consider
appropriate to satisfy the requirements of any applicable laws, rules or
regulations including any applicable withholding tax.
15. Notices. Notices
hereunder shall be mailed or delivered to the Company at its principal place of
business and shall be mailed or delivered to the Grantee at the address on file
with the Company or, in either case, at such other address as one party may
subsequently furnish to the other party in writing.
16. Successors and
Assigns. The Company will require its respective assign and
Successors to expressly assume this Award and to agree to perform hereunder in
the same manner and the same extent that the Company would be required to
perform if no such succession or assignment had taken
place. Regardless of whether such an agreement is executed, this
Award shall inure to the benefit of, and be binding upon, the Company’s
Successor and assigns and Xxxxxxx’s heirs, estates, legatees, executors,
administrators, and legal representatives.
17. Administration. This
Award shall be administered by the Compensation Committee (the “Committee”) of
the Board of Directors of the Company, which will have the power and authority
to construe the terms of this Award and to determine all questions
hereunder.
18. Amendment of Award.
The Committee may amend, modify or terminate the Award, provided that the Grantee’s
consent to such action shall be required unless the Committee determines that
the action, taking into account any related action, would not materially and
adversely affect the Grantee.
19. Governing
Law. The provisions made hereunder shall be governed by and
interpreted in accordance with the laws of the State of Delaware, without regard
to any applicable conflicts of law.
8
