EXHIBIT 10.2
ONYX SOFTWARE CORPORATION
STOCK AWARD AGREEMENT
Onyx Software Corporation, (the "Company"), hereby awards shares of Common Stock
to the individual named below (the "Participant"). The terms and conditions of
the Stock Award are set forth in this cover sheet, in the attached Stock Award
Agreement and in the Onyx Software Corporation 1998 Stock Compensation Incentive
Plan as amended and restated on March 21, 2003 (the "Plan").
Vesting Date: March 3, 2006
Award Date: March 15, 2006
Name of Participant: Xxxxxx X. Xxxxxxxx
Number of shares of Common Stock Awarded: 21,000
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED STOCK AWARD AGREEMENT AND
IN THE PLAN. YOU ARE ALSO ACKNOWLEDGING RECEIPT OF THIS
AGREEMENT AND COPIES OF THE PLAN AND THE PLAN'S PROSPECTUS.
Participant: /s/ Xxxxxx X. Xxxxxxxx
----------------------
(Signature)
Company: /s/ Xxxx X. Xxxxxx
----------------------
(Signature)
Title: VP & Chief Legal Officer
Attachment
ONYX SOFTWARE CORPORATION
STOCK AWARD AGREEMENT
THE PLAN AND The text of the Plan is incorporated in this
OTHER AGREEMENTS Agreement by this reference. You and the Company
agree to execute such further instruments and to
take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
Unless otherwise defined in this Agreement, certain
capitalized terms used in this Agreement are defined
in the Plan.
This Agreement, the attached Exhibits and the Plan
constitute the entire understanding between you and
the Company regarding this Award of Common Stock.
Any prior agreements, commitments or negotiations
are superseded.
AWARD OF COMMON STOCK The Company awards you the number of shares of
Common Stock shown on the cover sheet of this
Agreement. These shares are referred to in this
Agreement as your "Restricted Shares." The Award is
subject to the terms and conditions of this
Agreement and the Plan.
This Award is not intended to constitute a
"nonqualified deferred compensation plan" within the
meaning of Section 409A of the Code, and will be
interpreted accordingly.
VESTING As long as you render continuous service to the
Company (or its parent or Subsidiary), you will
become incrementally vested as to 33% of the total
number of Restricted Shares (rounded to the nearest
whole number) as shown on the attached cover sheet
on the one year anniversary of the Vesting Date and
an additional 16.75% of the total number of
Restricted Shares (rounded to the nearest whole
number) each six-months thereafter, with the result
that 100% of the Restricted Shares shall be vested
three years from the Vesting Date. Except as set
forth below, in the event that your service ceases
prior to the third anniversary of the Award date,
you will forfeit to the Company all of the unvested
Restricted Shares. For purposes of facilitating the
enforcement of the provisions of this Section, the
Company may issue stop-transfer instructions on the
Restricted Shares to the Company's transfer agent,
or otherwise hold the Restricted Shares in escrow,
until the Restricted Shares have vested and you have
satisfied all applicable obligations with respect to
the Restricted Shares, including any applicable tax
withholding obligations. Any new, substituted or
additional securities or other property which is
issued or distributed with respect to the unvested
Restricted Shares shall be subject to the same terms
and conditions as are applicable to the unvested
Restricted Shares under this Agreement and the Plan.
ACCELERATION UPON If your employment with the Company is terminated as
QUALIFYING a result of a Qualifying Termination, the unvested
TERMINATION Common Stock subject to this Award shall, upon the
effectiveness of the Release executed by you,
automatically
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vest for that portion of this Award that would have
vested if you had remained in the employment of the
Company through and including the first anniversary
of the date of such termination of employment.
ACCELERATION If your employment with the Company is terminated as
UPON DEATH OR a result of your death or Disability, the unvested
DISABILITY Common Stock subject to this Award shall, upon the
effectiveness of the Release executed by you (or
your personal representative if applicable),
automatically vest for that portion of this Award
that would have vested if you had remained in the
employment of the Company through and including the
first anniversary of the date of such termination of
employment.
ACCELERATION In the event of a Corporate Transaction, the Common
UPON CORPORATE Stock subject to this Award that is at the time
TRANSACTION unvested shall automatically accelerate so as to
become 100% vested immediately prior to the
specified effective date for the Corporate
Transaction. Notwithstanding the foregoing, the
Common Stock subject to this Award shall not so
accelerate, however, if and to the extent that this
Award is, in connection with the Corporate
Transaction, either to be assumed by the successor
corporation or parent thereof (the "Successor
Corporation") or to be replaced with a comparable
award of shares of the capital stock of the
Successor Corporation. The determination of award
comparability shall be made by the Committee, and
its determination shall be conclusive and binding.
If this Award is not assumed by the Successor
Corporation, or if it is replaced with a comparable
award of shares of the capital stock of the
Successor Corporation, it shall terminate and cease
to remain outstanding immediately following the
consummation of the Corporate Transaction, or the
granting of the comparable award, as applicable.
ACCELERATION If your employment with the Company is terminated as
UPON QUALIFYING a result of a Qualifying Termination occurring
TERMINATION within 24 months after a Change of Control (or if
FOLLOWING CHANGE OF pursuant to Section 14(c) of the Employment
CONTROL Agreement, such employment is deemed to have been
terminated as a result of a Qualifying Termination
occurring within 24 months after a Change of
Control), upon the effectiveness of the Release
executed by you, the portion of the Award that is
then outstanding and unvested shall automatically
fully vest and become immediately exercisable.
DEFINITIONS If not elsewhere defined, the following definitions
shall be applicable for this Award:
"Board" means the Company's Board of Directors.
Notwithstanding Section 2.3 of the Plan, "Cause"
means any one of the following: (i) a willful and
continued failure to perform your duties and
responsibilities as President and Chief Executive
Officer, other than a failure resulting from your
complete or partial incapacity due to physical or
mental
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illness or impairment, after there has been
delivered to you a written demand for performance
from the Board that describes the basis for the
Board's belief that you have not performed your
duties and provides you with (thirty) 30 days (or
such longer period of time as may be granted by the
Board in its sole discretion) to take corrective
action, (ii) a willful act by you that constitutes
gross misconduct and that results in material harm
to the Company, (iii) a willful breach by you of a
material provision of this Agreement or (iv) a
material and willful violation of a federal or state
law or regulation applicable to the business of the
Company that results in material harm to the
Company. For purposes of this Agreement, no act, or
failure to act, on your part shall be deemed
"willful" unless done, or omitted to be done, by you
not in good faith and without reasonable belief that
your action or omission was in the best interest of
the Company. Notwithstanding the foregoing, you
shall not be deemed to have been terminated for
Cause unless and until the Company provides written
notice to you by providing a copy of a resolution
duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the
Board (other than you), and including at least a
majority of the independent members of the Board (as
defined in Nasdaq Rule 4200(a)(15)) (the
"Independent Directors"), as it may be amended from
time to time), at a meeting of the Board called and
held for such purpose (after reasonable notice to
you and an opportunity for you, together with
counsel, to be heard before the Board) finding that,
in the good-faith opinion of the Board, you were
guilty of conduct set forth above and specifying the
particulars thereof in reasonable detail. If the
Company does not give you notice of termination for
Cause within sixty (60) days following the date an
Independent Director first has actual knowledge of
the material facts giving rise to the basis for such
termination, the Company shall be deemed to have
irrevocably waived the right to give notice on such
basis unless you consent in writing to an extension
of such sixty (60) day period. For purposes of the
foregoing waiver provision, you shall have the
burden of proving actual knowledge of an Independent
Director of the material facts giving rise to the
basis for such termination.
"Change of Control" means any of the following
events: (i) consummation of any merger or
consolidation or reorganization of the Company in
which the Company is not the continuing or surviving
entity, or pursuant to which shares of the Common
Stock are converted into cash, securities or other
property, if (and only if) following such merger or,
consolidation or reorganization, the holders of the
Company's outstanding voting securities immediately
prior to such merger or, consolidation or
reorganization own less than a majority of the
outstanding voting securities of the surviving
entity or members of the Company's board of
directors immediately prior to such merger,
consolidation or reorganization do not constitute a
majority of the board of directors of the surviving
entity; (ii) 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
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of the Company; (iii) approval by the holders of the
Common Stock of any plan or proposal for the
liquidation or dissolution of the Company; (iv)
acquisition by any person or group of beneficial
ownership (as defined in the Securities Exchange Act
of 1934, as amended) of more than 50% of the
Company's outstanding voting securities; or (v) if
those individuals who are directors of the Company
on the date of your employment (the "Incumbent
Board") cease to constitute a majority of the
Company's directors, provided that individuals whose
election as directors was approved by the Incumbent
Board shall be considered members of the Incumbent
Board.
"Committee" means the Board's Compensation
Committee.
"Corporate Transaction" means any of the following
events: (i) Consummation of any merger or
consolidation of the 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; (ii) 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 (iii) Approval by the holders of the
Common Stock of any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding Section 2.7 of the Plan,
"Disability" means that you, at the time the notice
of termination for disability is given to you by the
Company, have been unable to perform your essential
duties under the Employment Agreement (after
reasonable accommodations have been made for you)
for a period of not less than four consecutive
months as a result of your incapacity due to
physical or mental illness. In the event that you
resume the performance of substantially all of your
duties under the Employment Agreement before the
termination of your employment for disability
becomes effective, the notice of termination shall
automatically be deemed to have been revoked.
"Employment Agreement" means that certain employment
agreement entered into by and between the Company
and you on June 7, 2004 and amended as of January
20, 2005, July 11, 2005 and March 15, 2006.
"Qualifying Termination" means either that: (i) the
Company terminates your employment for any reason
other than Cause, Disability or death; or (ii) you
notify the Company in writing that you will
terminate your employment with the Company in
response to a "Constructive Termination."
Constructive Termination is defined as (a) a
material reduction of your duties, responsibilities,
or authorities or a material adverse change in the
5
prestige of your title, including without
limitation, if you are required to report to any
individual other than the Board, if you are not the
highest ranking officer of the Company's ultimate
parent entity or if you are assigned material duties
or material responsibilities that are not normally
associated with the position of President and Chief
Executive Officer of a company of similar size and
market capitalization to the Company, (b) a
reduction by the Company of your then current Base
Compensation, (c) a relocation of the Company's
headquarters of more than 35 miles from its location
on the date hereof or a change in your principal
business location to a location other than the
corporate headquarters, (d) a failure of the Board
to nominate you as a director of the Company;
provided, however, that the replacement of you as
Chairman of the Board shall not constitute a
Constructive Termination or (e) a breach by the
Company of a material provision of this Agreement.
If the Company cures such Constructive Termination
within 10 days after its receipt of your written
notice, then you will not be able to terminate your
employment in a Qualifying Termination based on the
event(s) in question. Each provision of this
Agreement that provides for payments to be paid or
material benefits to be provided to you shall be
deemed to be a material provision of this Agreement.
If you does not give the Company notice that you
will terminate your employment as a result of a
Constructive Termination within sixty (60) days
following the date you have actual knowledge of the
material facts giving rise to the basis for such
termination, you shall be deemed to have irrevocably
waived the right to give notice on such basis unless
the Company consents in writing to an extension of
such period. For purposes of the foregoing waiver
provision, the Company shall have the burden of
proving your actual knowledge of the material facts
giving rise to the basis for such termination.
"Release" means your release and waiver of claims in
the form required by the Employment Agreement.
CODE SECTION 83(B) Under Section 83 of the Internal Revenue Code of
ELECTION 1986, as amended (the "Code"), the Fair Market Value
of the Restricted Shares on the date any forfeiture
restrictions applicable to such Restricted Shares
lapse will be reportable as ordinary income at that
time. You may elect to be taxed at the time the
Restricted Shares are awarded to you to the extent
that the Fair Market Value of the Restricted Shares
exceeds the amount of consideration paid by you (if
any) for such Restricted Shares at that time rather
than when such Restricted Shares ceases to be
subject to such forfeiture restrictions, by filing
an election under Section 83(b) of the Code with the
Internal Revenue Service within thirty (30) days
after the Award Date. The form for making this
election is attached as Exhibit A hereto. YOU
ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND
NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER
CODE SECTION 83(B), EVEN IF YOU REQUEST THE COMPANY
OR ITS
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REPRESENTATIVES TO MAKE THIS FILING ON YOUR BEHALF.
YOU ARE RELYING SOLELY ON YOUR OWN ADVISORS WITH
RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE
A CODE SECTION 83(B) ELECTION.
LEAVES OF ABSENCE For purposes of this Agreement, while you are a
common-law employee, your service does not terminate
when you go on a bona fide leave of absence that was
approved by the Company (or its parent or
subsidiary) in writing, if the terms of the leave
provide for continued service crediting, or when
continued service crediting is required by
applicable law. Your service terminates in any event
when the approved leave ends, unless you immediately
return to active work.
The Company determines which leaves count for this
purpose, and when your service terminates for all
purposes under the Plan.
VOTING AND Subject to the terms of this Agreement, you shall
OTHER RIGHTS have all the rights and privileges of a shareholder
of the Company while the Restricted Shares are
subject to stop-transfer restrictions, or otherwise
held in escrow, including the right to vote and to
receive dividends (if any).
RESTRICTIONS ON The Company will not issue any Restricted Shares if
ISSUANCE the issuance of such Restricted Shares at that time
would violate any law or regulation.
WITHHOLDING TAXES You will be solely responsible for payment of any
and all applicable taxes associated with this Award.
Unless you make other arrangements with the Company
to satisfy your withholding obligations, you agree
to satisfy any applicable withholding tax
obligations that arise in connection with the
Restricted Shares by (i) having the Company withhold
shares from the Restricted Shares held in escrow, or
(ii) tendering shares to the Company, in either
case, equal in value to the amount necessary to
satisfy any such withholding tax obligation. Such
Shares shall be valued based on the fair market
value as of the day prior to the date that the
amount of tax to be withheld is to be determined
under applicable law. The Company shall not be
required to release the Restricted Shares from the
stop-transfer instructions or escrow unless and
until such obligations are satisfied.
RESTRICTIONS ON By signing this Agreement, you agree not to sell any
RESALE Restricted Share prior to its vesting or sell any
shares of Common Stock acquired under this Award at
a time when applicable laws, regulations or Company
or underwriter trading policies prohibit sale.
If the sale of shares of Common Stock acquired under
this Award is not registered under the Securities
Act, but an exemption is available which requires an
investment or other representation and warranty, you
shall represent and agree that the shares being
acquired are being acquired for
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investment, and not with a view to the sale or
distribution thereof, and shall make such other
representations and warranties as are deemed
necessary or appropriate by the Company and its
counsel.
NO RETENTION RIGHTS This Agreement is not an employment agreement and
does not give you the right to be retained by the
Company (or its parent or Subsidiaries). The Company
(or its parent or Subsidiaries) reserves the right
to terminate your service at any time and for any
reason.
ADJUSTMENTS In the event of a stock split, a stock dividend or a
similar change in the Company stock, the number of
Restricted Shares covered by this Award may be
adjusted (and rounded down to the nearest whole
number) pursuant to the Plan.
AUTHORIZATION TO You hereby authorize and direct your employer to
RELEASE NECESSARY collect, use and transfer in electronic or other
PERSONAL INFORMATION form, any personal information (the "Data")
regarding your employment, the nature and amount of
your compensation and the facts and conditions of
your participation in the Plan (including, but not
limited to, your name, home address, telephone
number, date of birth, social security number (or
any other social or national identification number),
salary, nationality, job title, number of shares
held and the details of all awards or any other
entitlement to shares awarded, cancelled, exercised,
vested, unvested or outstanding) for the purpose of
implementing, administering and managing your
participation in the Plan. You understand that the
Data may be transferred to the Company or any of its
Subsidiaries, or to any third parties assisting in
the implementation, administration and management of
the Plan, including any requisite transfer to a
broker or other third party assisting with the
administration of this Award under the Plan or with
whom shares acquired pursuant to this Award or cash
from the sale of such shares may be deposited. You
acknowledge that recipients of the Data may be
located in different countries, and those countries
may have data privacy laws and protections different
from those in the country of your residence.
Furthermore, you acknowledge and understand that the
transfer of the Data to the Company or any of its
Subsidiaries, or to any third parties is necessary
for your participation in the Plan.
You may at any time withdraw the consents herein by
contacting your local human resources representative
in writing. You further acknowledge that withdrawal
of consent may affect your ability to exercise or
realize benefits from this Award, and your ability
to participate in the Plan.
LEGENDS If certificates representing the Restricted Shares
are issued under this Award, then such certificates,
where applicable, shall have endorsed thereon the
following legend and any other legend the Company
determines appropriate:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES
SET FORTH IN AN AGREEMENT BETWEEN THE
COMPANY AND THE
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REGISTERED HOLDER, OR HIS OR HER PREDECESSOR
IN INTEREST. A COPY OF SUCH AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICE OF THE COMPANY
AND WILL BE FURNISHED UPON WRITTEN REQUEST
TO THE SECRETARY OF THE COMPANY BY THE
HOLDER OF RECORD OF THE SHARES REPRESENTED
BY THIS CERTIFICATE."
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR AN
OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
NOTICE Any notice to be given or delivered to the Company
relating to this Agreement shall be in writing and
addressed to the Company at its principal corporate
offices. Any notice to be given or delivered to you
relating to this Agreement shall be in writing and
addressed to you at such address of which you advise
the Company in writing. All notices shall be deemed
effective upon personal delivery or upon deposit in
the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
APPLICABLE LAW This Agreement will be interpreted and enforced
under the laws of the State of Washington.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
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EXHIBIT A
ELECTION UNDER SECTION 83(B) OF
THE INTERNAL REVENUE CODE
The undersigned hereby makes an election pursuant to Section 83(b) of the
Internal Revenue Code with respect to the property described below and supplies
the following information in accordance with the regulations promulgated
thereunder:
1. The name, address and social security number of the undersigned:
________________________________________________________________
________________________________________________________________
________________________________________________________________
Social Security No. :________________________________________
2. Description of property with respect to which the election is being made:
________________shares of common stock of Onyx Software Corporation (the
"Company").
3. The date on which the property was transferred is _____________, [YEAR].
4. The taxable year to which this election relates is calendar year [YEAR].
5. Nature of restrictions to which the property is subject:
The shares of stock are subject to the provisions of a Stock Award
Agreement (the "Agreement") between the undersigned and the Company.
The shares of stock are subject to forfeiture under the terms of the
Agreement.
6. The fair market value of the property at the time of transfer (determined
without regard to any lapse restriction) was $__________ per share, [for a
total of $__________.]
7. The amount paid by taxpayer for the property was $__________.
8. A copy of this statement has been furnished to the Company.
Dated: _____________ __, [YEAR].
______________________________
[Taxpayer's Name]
A-1
