Exhibit 10.2
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, par value $0.01 per
share, (the "Common Stock") as of January 30, 2001 ("Grant Date") to
XXXXXX XXXXXX (the "Optionee"), subject in all respects to the terms and
provisions of this Stock Option Agreement (the "Option"). 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.
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 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
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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 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
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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,
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.
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
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Chief Executive Officer
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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 acknowledges and represents that he is familiar with and
understands the terms and provisions of this Option. The Optionee hereby accepts
this Option subject to all the terms and provisions contained herein. The
Optionee hereby agrees to accept as binding, conclusive, and final all decisions
and interpretations of the Board upon any questions arising under the Option.
Dated: February 6, 2001
WITNESS: OPTIONEE:
/s/ Xxxxxx X. Xxxxxx
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