EXHIBIT 10.44
XATA CORPORATION
     THIS MATCHING RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”) is made
effective as of October 1, 2006 by and between XATA Corporation, a Minnesota
corporation (the “Company”) and John J. Coughlan (“Employee”).
Recitals
     The Company and the Employee have entered into an Executive Employment
Agreement effective as of October 1, 2006 (the “Employment Agreement”). The
Company desires to afford the Employee an opportunity to acquire shares of its
common stock, par value $.01 per share (the “Shares”) in an amount equal to the
number of shares of common stock purchased by Employee from the Company at the
time of commencement of his employment, as more fully disclosed and provided in
the Employment Agreement. For purposes of this Agreement, employment by any
subsidiary of the Company is equivalent to employment by the Company.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Employment Agreement.
     ACCORDINGLY, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Employee hereby agree as
follows:
     1. Restricted Stock Award. Subject to the terms and provisions of this
Agreement and the Employment Agreement, the Company hereby grants to Employee as
of the date hereof a restricted stock award for ninety two thousand five hundred
and ninety-three (92,593) Shares (the “Award Shares”). For purposes of
Section 16 under the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, the grant date for the Award Shares shall be the
effective date hereof; provided, however, all of Employee’s right, title and
interest in and to the Award Shares shall be subject to Section 2 below.
     2. Vesting of Award Shares.
          (a) Subject to Sections 2(b), (c), (d), (e) and (f) below, all of
Employee’s right, title and interest in and to the Award Shares is and shall be
contingent upon and subject to the continued full-time employment of Employee by
the Company during the vesting periods (the “Vesting Periods”). On the last day
(the “Vesting Date”) of each Vesting Period, and provided that Employee is then
a full time employee of the Company, Employee shall be deemed to be fully vested
without restriction in all of the Award Shares covered by that Vesting Period.

              Award Shares   Grant Date   Vesting Date   Shares Vested  
92,593
  October 1, 2006    September 30, 2007    All Shares 

          (b) In the event that Employee voluntarily resigns from Employee’s
full-time employment with the Company for a reason other than Good Reason or is
terminated by the

 

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Company for Cause during any Vesting Period, Employee shall forfeit all right,
title and interest in and to all unvested Award Shares.
          (c) In the event that Employee is terminated from employment by the
Company prior to the end of any Vesting Period because the Employee has died or
become Disabled, Employee shall thereupon become immediately vested without
restriction in all of the Award Shares covered by the shorter of the next three
(3) months immediately following the Date of Termination and that unexpired
Vesting Period to the same extent as though Employee had remained employed
through the end of such three (3) month period or unexpired Vesting Period,
respectively. Employee shall forfeit all right, title and interest in and to all
other unvested Award Shares.
          (d) In the event that Employee is terminated from employment by the
Company without Cause (other than in the event of death or Disability, it being
understood that a purported termination for Disability or for Cause which is
disputed and finally determined not to have been a proper termination for Cause
or Disability shall be a termination by the Company without Cause) or if
Employee terminates his employment for Good Reason (in each case, in the absence
of a Change in Control), Employee shall thereupon become immediately vested
without restriction in all of the Award Shares that would have vested pursuant
to Section 2(a) above over the then remaining term of the Employment Agreement
or, if longer, the twelve (12) month period immediately following the Date of
Termination had Employee remained employed through the end of such term or
twelve (12) month period, respectively.
          (e) Notwithstanding anything to the contrary in Section 2 (a), (b),
(c) or (d) above, in the event that the Company consummates a Change of Control,
Employee shall thereupon become immediately vested without restriction in
one-half of the number of unvested Award Shares as of the date of the Change of
Control (comprising those Shares scheduled next to vest), and the remaining
unvested Award Shares shall continue to vest in accordance with this Section 2.
          (f) Notwithstanding anything to the contrary in this Section 2, in the
event that (i) upon or within six months before a Change of Control or within
two years following a Change of Control either (x) the Company terminates
Employee’s employment without Cause (other than in the event of death or
Disability, it being understood that a purported termination for Disability or
for Cause which is disputed and finally determined not to have been proper
termination for Cause or Disability shall be a termination by the Company
without Cause) or (y) Employee terminates his employment for Good Reason, or
(ii) the Chairman of the Board of the Company immediately prior to the
consummation of a Change of Control ceases to be the Chairman of the Board of
the Company, or any successor thereto, immediately following the Change of
Control and Employee terminates his employment, then Employee shall thereupon
become immediately vested without restriction in all of the unvested Award
Shares.
     3. Restriction on Transfer. No interest in unvested Award Shares shall be
transferable by any means (e.g. sale, assignment, pledge, gift).

 

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     4. Issuance and Delivery of Certificates for Award Shares.
          (a) As soon as practicable after the execution hereof, the Company
shall issue in Employee’s name, and retain in the custody of the Company
pursuant to Section 4(b) below, a certificate for paid-up, non-assessable Shares
for the full number of the Award Shares. The Company shall place a stop transfer
order on its stock records with respect to the Award Shares, and the certificate
for the Award Shares shall contain the following legend:
“The securities evidenced by this certificate were issued pursuant to a
Restricted Stock Award Agreement between the holder and the issuer dated
                     (the “Agreement”), and no sale, offer to sell, transfer,
pledge or other hypothecation of these securities may be made so long as the
securities remain subject to the restrictions set forth in the Agreement.”
          (b) Employee acknowledges and agrees that the Company shall retain the
custody of the certificates for the Award Shares, and that the certificates will
not be delivered to Employee except as provided in Section 4(c) below. Upon
execution of this Agreement, Employee has also executed and delivered to the
Company an Assignment Separate from Certificate, authorizing the Company as
attorney to transfer the certificate for the Award Shares to the Company upon
forfeiture pursuant to this Agreement.
          (c) As soon as reasonably practicable after termination of the
transfer restrictions pursuant to Section 3 above, the Company will deliver a
certificate for the Award Shares, adjusted as necessary for the actual number of
Award Shares in which Employee has become vested, without the restrictive legend
set forth in Section 4(a). Delivery of the certificate under this Section 4(c)
shall be made at the principal office of the Company to the person or persons
entitled thereto during ordinary business hours of the Company not more than
thirty (30) days after the vesting of the Award Shares, or at such time, place
and manner as may be agreed upon by the Company and the person or persons
entitled to the Award Shares.
     5. Rights and Restrictions as a Shareholder. During the Employee’s
continued full time employment with the Company or its subsidiaries Employee
shall have full voting rights, dividend rights and other rights as a shareholder
with respect to all vested (but not unvested) Award Shares. So long as the
Company retains custody of the certificates for the Award Shares, Employee shall
not (i) sell, offer to sell, transfer, pledge or hypothecate any record or
beneficial interest in the Award Shares, other than to the Company as provided
in this Agreement or (ii) grant any proxies or voting rights with respect to the
Award Shares, except to the Company. The Employee hereby grants an irrevocable
proxy to the chief operating officer and the chief financial officer of the
Company (the act of one of them being sufficient), which is coupled with an
interest as described in Minnesota Statutes § 302.449, to vote all unvested
Award Shares, subject to direction by the Board of Directors of the Company, on
any and all matters put to a vote of the shareholders of the Company. Upon
vesting of the Award Shares pursuant to Section 2 above, Employee (or, in the
event of the death of Employee, the person or persons then entitled to the Award
Shares or any portion thereof) shall have full voting rights, dividend rights
and other rights as a shareholder with respect to such Award Shares.

 

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     6. Stock Dividends, Stock Splits and Other Adjustments. During the time
that the Award Shares are subject to the vesting restrictions set forth in
Section 2 above, if a stock dividend or stock split is declared on the
outstanding Shares of the Company, or if outstanding Shares of the Company are
changed into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, recapitalization, reclassification, stock
split, reverse stock split, combination of shares or dividends payable in
capital stock, appropriate adjustment shall be made in the number and kind of
shares as to which the Award Shares relate (the “Adjusted Shares”), to the end
that the proportionate interest of Employee, as a shareholder of the Company
with respect to the Award Shares when and if vested, shall be maintained as
before the occurrence of such event. As used herein, the term Award Shares
include any corresponding Adjusted Shares. The Company shall retain the custody
of each certificate for the Adjusted Shares pursuant to Section 4(b) above.
     7. Withholding. Employee shall pay on a timely basis all withholding and
payroll taxes and/or excise taxes required by law with respect to the Award
Shares (collectively, “Withholding Taxes”). The delivery of any Award Shares (or
portion thereof, if any) to Employee under this Agreement shall be subject to
and conditioned upon Employee’s payment of all applicable Withholding Taxes.
Employee hereby authorizes the Company to withhold such Withholding Taxes from
his salary and/or commissions.
     8. Investment Representations. Unless a registration statement under the
Securities Act of 1933, as amended, is in effect with respect to the Award
Shares on the date of issuance of the Award Shares, Employee will be deemed to
have made the following investment representation on the date of issuance:
Employee intends to acquire the Award Shares for Employee’s own account for
investment purposes and not with a view to resale in connection with any
distribution thereof. Employee has no present intention, and is not a party to
any agreement or arrangement, to resell or dispose of any of the Award Shares.
Employee understands and agrees that the Company has no obligation to register
the Award Shares and that the Award Shares will not be registered under the
Securities Act of 1933, as amended (the “Act”), or under applicable state
securities laws, on the grounds that the Award Shares are being issued in a
transaction not involving a public offering and that, consequently, such
transaction is exempt from registration under the Act and the state securities
laws. Employee further understands and agrees that the Award Shares may not be
sold, transferred or otherwise disposed of except pursuant to an effective
registration statement or appropriate exemption from registration under the
foregoing securities acts. Accordingly, Employee acknowledges that the Company
is not required to recognize any transfer of the Award Shares if such transfer
would result in violation of any federal or state law regarding the offering or
sale of securities. The

 

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Company may place a stop transfer order on its stock records with respect to the
Award Shares, and the certificate(s) for the Award Shares may contain
substantially the following legend:
“The securities evidenced by this certificate have not been registered either
under any applicable federal law and rules or applicable state law and rules. No
sale, offer to sell, or transfer of these securities may be made unless a
registration statement under the Securities Act of 1933, as amended, and any
applicable state law with respect to such securities is then in effect or an
exemption from the registration requirements of such law is then, in fact,
applicable to such securities.”
     9. Legend on Shares if Registered. If Employee is deemed an affiliate of
the Company, the Company may place a stop transfer order on its stock records
with respect to the Award Shares, and the certificate(s) for the Award Shares
(or a portion thereof) may contain substantially the following legend:
“The securities evidenced by this certificate were issued to an affiliate of the
issuer, and the resale of such securities is subject to the restrictions of
Rule 144 under the Securities Act of 1933, as amended, pertaining to shares held
by affiliates.”
     10. Expenses. Nothing contained in this Agreement shall be construed to
impose any liability on the Company in favor of the Employee for any cost, loss
or expense the Employee may incur in connection with, or arising out of any
transaction under, this Agreement.
     11. No Employment Agreement. Nothing in this Agreement shall be construed
to constitute or be evidence of an agreement or understanding, express or
implied, on the part of the Company to employ the Employee on any terms or for
any specific period of time.
     12. Nontransferability. The rights of the Employee under this Agreement
shall not be assigned, transferred, pledged or otherwise hypothecated by the
Employee other than by will or the laws of descent and distribution.
     13. Fractional Shares. No fraction of a share shall be deliverable pursuant
to this Agreement, but in the event any adjustment hereunder of the number of
the Award Shares shall cause such number to include a fraction of a share, such
fraction shall be adjusted to the nearest smaller whole number of shares.
     14. Complete Agreement, Amendment. This Agreement and the Employment
Agreement, which by this reference is hereby incorporated herein in its
entirety, contain the entire agreement between the Company and Employee with
respect to the transactions contemplated hereby. Any modification of the terms
of this Agreement must be in writing and signed by each of the parties.
Notwithstanding the foregoing, this Agreement may be modified by the Employment
Agreement (or any amendment thereto) between the parties.

 

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     15. Governing Law. Any issue related to the formation, execution,
performance and interpretation of this Agreement shall be governed by the laws
of the State of Minnesota.
     16. Headings. The section and subsection headings used in this Agreement
are for convenient reference and are not a part of this Agreement.

              XATA CORPORATION   EMPLOYEE    
 
           
By
           
Title
 
 
 
 
John J. Coughlan