EXHIBIT 10.9
Revised Stock Option Agreement
Onyx Software Corporation
I. OPTION GRANT. ONYX SOFTWARE CORPORATION, a Washington corporation (the
"Company") hereby grants a nonqualified stock option to purchase a total
of 600,000 shares of Common Stock of the Company (the "Option"), par value
$0.01 per share, (the "Common Stock") as of April 18, 2001 ("Grant Date")
to XXXXXX XXXXXX (the "Optionee"), pursuant to and subject in all respects
to the terms and provisions of the Company's 1998 Stock Incentive
Compensation Plan (the "1998 Plan"), as modified by this Stock Option
Agreement. This Option shall be governed by, and construed in accordance
with, the laws of the state of Washington without regard for principles of
conflict of laws. This Stock Option Agreement supersedes the original
Stock Option Agreement granted to Optionee by the Company's board of
directors on January 30, 2001.
II. VESTING SCHEDULE. The Vesting Initiation Date shall be January 30, 2001.
This Option shall vest and become exercisable as to 25% of the total
number of shares of Common Stock covered by this Option on the one year
anniversary of the Vesting Initiation Date and an additional 2.0833% of
the shares covered by the Option shall vest each month thereafter, with
the result that the Option shall be fully vested and exercisable four
years after the Vesting Initiation Date. Notwithstanding the foregoing, if
Optionee's employment with the Company terminates in a Qualifying
Termination (as defined in the Employment Agreement by and between the
Company and Optionee entered into as of the 30th day of January, 2001 (the
"Employment Agreement")), this Option shall, upon such Qualifying
Termination, automatically vest and become exercisable as to all of the
shares of Common Stock originally subject to the Option that would
otherwise have vested during the 12-month period following the effective
date of such Qualifying Termination.
III. PRICE. The Option exercise price per share (the "Exercise Price") as
determined by the Board of Directors (the "Board") of the Company is
$16.157. The Exercise Price shall be paid by delivery of cash or, subject
to the discretion of the Board, by delivery of an approved equivalent to
cash.
IV. PURCHASE FOR INVESTMENT. This Option may not be exercised if the issuance
of shares of Common Stock pursuant to an exercise would constitute a
violation of any applicable federal or state securities or other law or
valid regulation. Any other provision of this Option notwithstanding, the
obligation of the Company to issue shares pursuant to an exercise of the
Option shall be subject to all applicable laws, rules and regulations and
such approval by any regulatory body as may be required. The Company
reserves the right to restrict, in whole or in part, the delivery of
shares prior to the satisfaction of all legal requirements relating to the
issuance of such shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing. The
Optionee, as a condition to his exercise of this Option, shall sign a
Letter of Investment satisfactory to the Company's counsel and represent,
among other things, to the Company that the shares of Common Stock that he
acquires under this Option are being acquired by
him for investment and not with a view to distribution or resale and that
he understands that such shares of Company Common Stock may not be sold
until (a) there is an effective registration statement under the
Securities Act of 1933, as amended, (the "Act") and applicable state
securities laws covering any such transaction involving such shares of
Common Stock or (b) the Company receives an opinion of legal counsel for
the holder of such shares of Common Stock (concurred in by legal counsel
of the Company) stating that such transaction is exempt from registration.
V. NON-ASSIGNABILITY. The Option may not be transferred or hypothecated in
any manner and shall only be exercisable by the Optionee or his legal
representative. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors, and assigns of the Optionee.
VI. EXERCISE.
A. This Option shall be exercisable, to the extent of the number of
shares purchasable by Optionee at the date of termination, only (a)
within one year after such termination if the Optionee's termination
is coincident with the Optionee's death or Disability (as defined in
the Employment Agreement) or (b) within three months after the date
that Optionee ceases to be an employee, director, officer,
consultant, agent, advisor or independent contractor of the Company
or a subsidiary if termination of the Optionee's employment or
services is for any reason other than death or Disability, but in no
event later than the remaining Term of the Option. Any portion of
this Option exercisable at the time of the Optionee's death may be
exercised, to the extent of the number of shares purchasable by the
Optionee at the date of the Optionee's death, by the personal
representative of the Optionee's estate or the person(s) to whom the
Optionee's rights under the Option have passed by will or the
applicable laws of descent and distribution, at any time or from time
to time within one year after the date of death, but in no event
later than the remaining Term of the Option.
B. This Option may not be exercised more than ten (10) years from the
date hereof (the "Term"), and may be exercised during the Term only
in accordance with the terms and provisions set forth herein.
C. In the event of a Corporate Transaction (as defined below) involving
the Company, this Option shall automatically accelerate so that such
Option shall, immediately prior to the specified effective date for
the Corporate Transaction, become vested and exercisable as to all of
the shares of Common Stock originally subject to the Option that
would otherwise have vested during the 6-month period following the
effective date of the Corporate Transaction. Regardless whether this
Option continues or is assumed or replaced in a Corporate
Transaction, the portion of the Option that does not otherwise
accelerate at the time of the Corporate Transaction shall be
accelerated in the event that the Optionee's employment terminates in
a Qualifying Termination within two years following such Corporate
Transaction. A "Corporate Transaction" means any of the following
events: (a) consummation of any merger or consolidation of the
2
Company in which the Company is not the continuing or surviving
corporation, or pursuant to which shares of the Common Stock are
converted into cash, securities or other property, if following such
merger or consolidation the holders of the Company's outstanding
voting securities immediately prior to such merger or consolidation
own less than a majority of the outstanding voting securities of the
surviving corporation; (b) consummation of any sale, lease, exchange
or other transfer in one transaction or a series of related
transactions of all or substantially all of the Company's assets
other than a transfer of the Company's assets to a majority-owned
subsidiary corporation of the Company; or (c) approval by the holders
of the Common Stock of any plan or proposal for the liquidation or
dissolution of the Company. Ownership of voting securities shall take
into account and shall include ownership as determined by applying
Rule 13d-3(d)(1)(i) (as in effect on the date hereof) under the
Securities and Exchange Act of 1934, as amended. The accelerated
vesting of the Option pursuant to this Section VI(C) or pursuant to
the Employment Agreement shall not be adversely altered or rendered
null and void, without Optionee's express written consent, even if
such accelerated vesting would preclude a Corporate Transaction or
other transaction involving the Company from qualifying for financial
accounting treatment of such transaction as a pooling of interests
under APB Opinion No. 16.
D. This Option may be exercised for all or part of the shares eligible
for exercise by presenting a written notice (the "Notice") to the
Company that this Option is exercised in strict accordance with the
terms and provisions of this Option. The Company shall determine
whether or not the Notice complies with the terms and provisions of
this Option. Such Notice shall identify this Option, state the number
of shares as to which the Option is exercised and be signed by the
Optionee. Delivery of the cash or cash equivalent in payment for the
shares to be purchased pursuant to the exercise of this Option shall
accompany the Notice. The Letter of Investment, representations and
such other documentation required by Section IV hereof shall also
accompany the Notice. If the Optionee is deceased, the Notice shall
be signed, and if the Optionee is Disabled, it may be signed, by the
Optionee's legal representatives or beneficiaries, and in all
instances shall be accompanied by evidence satisfactory to the
Company and its transfer agent of the right of such person or persons
to exercise this Option.
E. The Optionee shall make arrangements satisfactory to the Company for
the satisfaction of any withholding tax obligations that arise in
connection with his Option. The Company shall not be required to
issue any shares of Common Stock until such obligations are
satisfied.
VII. MARKET STANDOFF. In connection with any underwritten public offering by
the Company of its equity securities pursuant to an effective registration
statement filed under the Securities Act, Optionee shall not sell, make
any short sale of, loan, hypothecate, pledge, grant any option for the
purchase of, or otherwise dispose or transfer for value or otherwise agree
to engage in any of the foregoing transactions with respect to, any shares
issued pursuant to this Option without the prior written consent of the
Company or its underwriters. Such limitations shall be in effect for such
period of time
3
as may be requested by the Company or such underwriters and agreed to by
the Company's officers and directors with respect to their shares;
provided, however, that in no event shall such period exceed 180 days.
Holders of shares issued pursuant to this Option shall be subject to the
market standoff provisions of this paragraph only if the officers and
directors of the Company are also subject to similar arrangements. In the
event of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding
Common Stock effected as a class without the Company's receipt of
consideration, then any new, substituted or additional securities
distributed with respect to the purchased shares shall be immediately
subject to the provisions of this Section VII., to the same extent the
purchased shares are at such time covered by such provisions. In order to
enforce the limitations of this Section VII., the Company may impose stop-
transfer instructions with respect to the purchased shares until the end
of the applicable standoff period.
VIII. EFFECT OF CHANGE IN COMMON STOCK SUBJECT TO OPTION. If the outstanding
shares of Common Stock shall at any time be changed or exchanged by
declaration of a stock dividend, split-up, combination of shares, or
recapitalization, the number and kind of shares subject to this Option,
and the Exercise Price, shall be appropriately and equitably adjusted so
as to maintain the proportionate number of shares subject to this Option
and the Exercise Price in relation to the change in stock; provided,
however, that no adjustment shall be made by reason of the distribution of
subscription rights on outstanding stock.
IX. AMENDMENT OR ALTERATION. The Board may amend or alter this Option or the
1998 Plan, except that no amendment or alteration shall be made which
would impair the rights of the Optionee hereunder, without his consent,
and, except further, this Option shall be subject to the requirement that,
if, at any time the Board shall determine, in its discretion, that the
listing, registration or qualification of the stock issuable or
transferable upon exercise thereof upon any securities exchange or under
any state or federal law or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in
connection with, the granting of this Option or the issue, transfer, or
purchase of shares hereunder, this Option may not be exercised in whole or
in part unless such listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board.
X. OPTION NOT A SERVICE CONTRACT. This Option is not an employment contract
and nothing in this Option shall be construed as giving Optionee any right
to be retained in the employ of the Company or limit the Company's right
to terminate the employment or services of Optionee.
4
XI. NO RIGHTS AS A SHAREHOLDER. The Optionee, or a transferee of the
Optionee, shall have no rights as a shareholder with respect to any Common
Stock covered by the Option until such person becomes entitled to receive
such Common Stock by filing a Notice and paying the Exercise Price
pursuant to the terms of this Option.
ONYX SOFTWARE CORPORATION
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Chief Executive Officer
5
If the following acknowledgment and acceptance is not executed within ten (10)
days of the effective date of this Option, it shall lapse and be treated for all
purposes as if it were never granted.
The Optionee agrees to be bound by all terms and conditions of the Option set
forth in this Stock Option Agreement and in the 1998 Plan and acknowledges and
represents that he is familiar with and understands the terms and provisions of
this Option and in the 1998 Plan.
Dated: April 18, 2001
WITNESS: OPTIONEE:
/s/ Xxxxxx Xxxxxx
----------------------------------- -------------------------------------
6
