A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees and consultants and other independent advisors who
provide services to the Corporation (or any Parent or Subsidiary).
B. Participant is to render valuable services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation’s
issuance of shares of Common Stock to the Participant under the Stock Issuance Program.
C. All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Restricted Stock Units. The Corporation hereby awards to the Participant, as of the Award Date, Restricted Stock Units under the
Plan. Each Restricted Stock Unit represents the right to receive one share of Common Stock on the vesting date of that unit. The number of shares of Common Stock subject to the awarded Restricted Stock Units, the applicable vesting schedule for
those shares, the dates on which those vested shares shall become issuable to Participant and the remaining terms and conditions governing the award (the “Award”) shall be as set forth in this Agreement.
Number of Shares Subject to Award:
Common Stock (the “Shares”)
The Shares shall vest upon the earlier of (i) the Corporation’s attainment of the 2006 fiscal year financial plan approved by the Board, provided the Participant continues
in Service through the last day of the 2006 fiscal year, or (ii) the Participant’s completion of five (5) years of Service measured from the Award Date. However, one or more Shares may be subject to accelerated vesting in accordance with the
provisions of Paragraph 4 of this Agreement.
The Shares in which the Participant vests in accordance with the foregoing Vesting Schedule will be issuable immediately upon vesting, subject to the Corporation’s collection of the
applicable Withholding Taxes. The procedures pursuant to which the applicable Withholding Taxes are to be collected are set forth in Paragraph 6 of this Agreement.
Transferability. Prior to actual receipt of the Shares which vest hereunder, the Participant may not transfer any interest in the Award or the underlying Shares. Any Shares which vest hereunder but which otherwise remain unissued at the time
of the Participants death may be transferred pursuant to the provisions of the Participant’s will or the laws of inheritance or to the Participant’s designated beneficiary or beneficiaries of this Award. The Participant may make such a
beneficiary designation at any time by filing the appropriate form with the Plan Administrator or its designate.
3. Cessation of Service. Should the Participant cease Service for any reason prior to vesting in the Shares subject to this Award, then the
Award will be immediately cancelled with respect to those unvested Shares, and the number of Restricted Stock Units will be reduced accordingly. The Participant shall thereupon cease to have any right or entitlement to receive any Shares under those
4. Change of Control.
(a) Any Restricted Stock Units subject to this Award at the
time of a Change in Control may be assumed by the successor entity or otherwise continued in full force and effect or may be replaced with a cash incentive program of the successor entity which preserves the Fair Market Value of the unvested shares
of Common Stock subject to the Award at the time of the Change in Control and provides for subsequent payout of that value in accordance with the vesting schedule applicable to the Award. No accelerated vesting of the Restricted Stock Units shall
occur in the event of such assumption or continuation of the Award or such replacement of the Award with a cash incentive program
(b) In the event the Award is assumed or otherwise continued in effect, the Restricted Stock Units subject to the Award will be adjusted immediately
after the consummation of the Change in Control so as to apply to the number and class of securities into which the Shares subject to those units immediately prior to the Change in Control would have been converted in consummation of that Change in
Control had those Shares actually been issued and outstanding at that time. To the extent the actual holders of the outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor
corporation may, in connection with the assumption or continuation of the Restricted Stock Units subject to the Award at that time, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration
paid per share of Common Stock in the Change in Control transaction.
(c) Any Restricted Stock Units which are assumed or otherwise continued in effect in connection with a
Change in Control shall be subject to accelerated vesting to the extent (if any) provided under any Change in Control Severance Agreement in effect between the Corporation and the Participant at the time of his or her cessation of Service, with the
Restricted Stock Units to be treated, for such accelerated vesting purposes, in the same manner as if they were outstanding stock options held by the Participant at the time of such cessation of Service.
(d) If the Restricted Stock Units subject to this Award at the time of the
Change in Control are not so assumed or otherwise continued in effect, then those units will vest immediately prior to the closing of the Change in Control. The Shares subject to those vested units will be issued immediately upon such vesting (or
otherwise converted into the right to receive the same consideration per share of Common Stock payable to the other stockholders of the Corporation in consummation of that Change in Control), subject to the Corporation’s collection of the
applicable Withholding Taxes pursuant to the provisions of Paragraph 6.
(e) This Agreement shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell
or transfer all or any part of its business or assets.
Adjustment in Shares. Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation’s receipt of consideration, appropriate adjustments shall be made to the total number and/or class of securities issuable pursuant to this Award in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
6. Issuance of Shares
of Common Stock.
(a) As soon as administratively
practicable following the applicable vesting date of the Award, the Corporation shall issue to or on behalf of the Participant a certificate (which may be in electronic form) for the shares of Common Stock which vest on that date under the Award,
subject, however, to the Corporation’s collection of the applicable Withholding Taxes from the Participant. The Withholding Taxes may be collected from the Participant through either of the following alternatives:
the Participant’s delivery of his or her separate check payable to the Corporation in the amount of such Withholding Taxes, or
the use of the proceeds from a next-day sale of the Shares issued to the Participant, provided and only if (i) such a sale is permissible under the Corporation’s trading
policies governing the sale of Common Stock, (ii) the Participant is not at the time an executive officer subject to the short-swing trading restrictions of the federal securities laws and (iii) the Participant makes an irrevocable commitment, on or
before the vesting date for those Shares, to effect such sale of the Shares.
(b) The Plan Administrator may, in its sole discretion and pursuant to procedures authorized and
established by the Plan Administrator for such purpose, permit the Participant to satisfy the Withholding Tax liability applicable to the Shares which vest under the Award by allowing the Participant to direct the Corporation to withhold a portion
of those vested Shares with a Fair Market Value (measured as of the vesting date) equal to the amount of such Withholding Taxes; provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to
satisfy the Corporation’s required tax withholding obligations using the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to supplemental taxable income. Participant shall be
notified in writing in the event such Share withholding mechanism is actually to be made available with respect to one or more Shares which vest under this Agreement.
(c) The holder of this Award shall not have any stockholder rights, including voting or dividend rights, with respect to
the Shares subject to the Award until the Participant becomes the record holder of those Shares following their actual issuance upon the Corporation’s collection of the applicable Withholding Taxes.
(d) The settlement of all Restricted Stock Units which vest under the Award
shall be made solely in shares of Common Stock. In no event, however, shall any fractional shares be issued. Accordingly, the total number of shares of Common Stock to be issued at the time the Award vests shall, to the extent necessary, be rounded
down to the next whole share in order to avoid the issuance of a fractional share.
7. Compliance with Laws and Regulations.
(a) The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Corporation and Participant with all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock may be listed for trading at the time of such issuance.
(b) The inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation
to be necessary to the lawful issuance of any Common Stock hereby shall relieve the Corporation of any liability with respect to the non-issuance of the Common Stock as to which such approval shall not have been obtained. The Corporation, however,
shall use its best efforts to obtain all such approvals.
Notices. Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices. Any notice required to be given or
delivered to Participant shall be in writing and addressed to Participant at the address indicated below Participant’s signature line on this Agreement. 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.
9. Successors and Assigns. Except to the extent otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon,
the Corporation and its successors and assigns and Participant, Participant’s assigns, the legal representatives,
heirs and legatees of Participant’s estate and any beneficiaries of the Award designated by Participant.
10. Construction. This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by
and subject to the terms of the Plan. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in the Award.
11. Governing Law. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules.
12. Employment at Will. Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Participant) or of Participant, which rights are hereby expressly reserved by each, to
terminate Participant’s Service at any time for any reason, with or without cause.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first indicated above.
PORTAL SOFTWARE, INC.
The following definitions shall be in effect under the Agreement:
B. Award shall mean the award of restricted stock units made to
the Participant pursuant to the terms of this Agreement.
Award Date shall mean the date the restricted stock units are awarded to Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.
D. Board shall mean the Corporation’s Board of Directors.
E. Change in Control shall mean a change in
ownership or control of the Corporation effected through any of the following transactions:
(i) a merger or consolidation approved by the Corporation’s stockholders pursuant to which securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction,
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation’s assets approved by the Corporation’s stockholders in connection with a complete liquidation or dissolution of the Corporation,
(iii) the acquisition, directly or indirectly by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to the Corporation’s stockholders, or
(iv) a change in the composition of the Board over a period
of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination.
F. Code shall mean the Internal Revenue Code of 1986, as
G. Common Stock shall mean shares of
the Corporation’s common stock.
Corporation shall mean Portal Software, Inc., a Delaware corporation, and any successor corporation to all or substantially all of the assets or voting stock of Portal Software, Inc. which shall by appropriate action adopt the Plan.
I. Employee shall mean an individual who is in
the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.
J. Fair Market Value per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock, as such price is reported by the National
Association of Securities Dealers. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time
listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock,
as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
L. Participant shall mean the person to whom the Award is made pursuant to the Agreement.
M. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
N. Plan shall mean the Corporation’s 1999 Stock Incentive Plan, as amended and restated.
O. Plan Administrator shall mean either the Board or a committee of the Board acting in its capacity as administrator of the Plan.
P. Service shall mean the Participant’s
performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor. For purposes of this Agreement, Participant shall be
deemed to cease Service immediately upon the occurrence of the either of the following events: (i) Participant no longer performs services in any of the foregoing capacities for the Corporation (or any Parent or Subsidiary) or (ii) the entity for
which Participant performs such services ceases to remain a Parent or Subsidiary of the Corporation, even though Participant may subsequently continue to perform services for that entity. Service shall not be deemed to cease during a period of
military leave, sick leave or other personal leave approved by the Corporation; provided, however, that except to the extent otherwise required by law or expressly authorized by the Plan Administrator, no Service credit shall be given
for vesting purposes for any period the Participant is on a leave of absence.
Q. Stock Exchange shall mean the American Stock Exchange or the New York Stock Exchange.
R. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation,
provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
S. Withholding Taxes
shall mean the federal, state and local income taxes and the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the issuance of the shares of Common Stock which vest under
of the Award.