Exhibit 10.11
ASTEA INTERNATIONAL INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
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UNDER 1997 STOCK OPTION PLAN
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ASTEA INTERNATIONAL INC., a Delaware corporation (the "Company"), hereby
grants this_____day of_____, 199__ (the "Grant Date"), to________ (the
"Optionee"), an option to purchase a maximum of___________shares (the "Option
Shares") of Common Stock, $.01 par value (the "Common Stock"), at the price of
$_____ per share, on the following terms and conditions:
1. GRANT UNDER 1997 STOCK OPTION PLAN. This option (the "Option") is
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granted pursuant to and is governed by the Company's 1997 Stock Option Plan (the
"Plan") and, unless the context otherwise requires, terms used herein shall have
the same meaning as in the Plan. Determinations made in connection with this
Option pursuant to the Plan shall be governed by the Plan as it exists on this
date.
2. GRANT AS NON-QUALIFIED OPTION; OTHER OPTIONS. This Option is intended
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to be a Non-Qualified Option (rather than an incentive stock option), and the
Board of Directors intends to take appropriate action, if necessary, to achieve
this result. This Option is in addition to any other options heretofore or
hereafter granted to the Optionee by the Company, but a duplicate original of
this instrument shall not affect the grant of another option.
3. EXTENT OF OPTION IF BUSINESS RELATIONSHIP CONTINUES. If the Optionee
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has continued to serve the Company (or any affiliated corporation) in the
capacity of an employee, officer, director, agent, advisor, or consultant,
including services as a member of the Board of Advisors of the Company (such
service is described herein as maintaining or being involved in a "Business
Relationship" with the Company), on the following dates, this Option may be
exercised for the number of Option Shares set opposite the applicable date:
Prior to the first anniversary of the - 0% of the total Option
Grant Date Shares
One year but less than two years - an additional 25% of the
from the Grant Date total Option Shares
Two years but less than three years - an additional 25% of the
from the Grant Date total Option Shares
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Three years but less than four years - an additional 25% of the
from the Grant Date total Option Shares
Four years from the Grant Date - an additional 25% of the
total Option Shares
The foregoing rights are cumulative and, while the Optionee continues to
maintain a Business Relationship with the Company, may be exercised up to and
including the date which is ten years from the date this Option is granted. All
of the foregoing rights are subject to Sections 4, 5 and 17, as appropriate, if
the Optionee ceases to maintain a Business Relationship with the Company, or
dies, becomes disabled or undergoes dissolution while involved in a Business
Relationship with the Company.
4. TERMINATION OF BUSINESS RELATIONSHIP. Subject to Section 17, if the
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Optionee ceases to maintain a Business Relationship with the Company (or any
affiliated corporation), other than by reason of death or disability as defined
in Section 5, no further installments of this Option shall become exercisable
and this Option shall terminate 90 days after the date the Business Relationship
ceases, but in no event later than the scheduled expiration date. In such a
case, the Optionee's only rights to exercise options hereunder shall be those
which are properly exercisable before the termination of this Option, and the
Optionee may exercise this Option for the number of Option Shares which have
vested and become exercisable prior to the date of termination.
5. DEATH; DISABILITY. If the Optionee is a natural person who dies while
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involved in a Business Relationship with the Company (or any affiliated
corporation), this Option may be exercised, to the extent of the number of
Option Shares with respect to which the Optionee could have exercised it on the
date of his or her death, by his or her estate, personal representative or
beneficiary or family member to whom this Option has been gifted pursuant to
Section 10, at any time within 180 days after the date of death, but not later
than the scheduled expiration date. If the Optionee is a natural person whose
Business Relationship with the Company is terminated by reason of his or her
disability (as defined in the Plan), this Option may be exercised, to the extent
of the number of Option Shares with respect to which the Optionee could have
exercised it on the date the Business Relationship was terminated, at any time
within 180 days after the date of such termination, but not later than the
scheduled expiration date. At the expiration of such 180-day period or the
scheduled expiration date, whichever is the earlier, this Option shall terminate
and the only rights hereunder shall be those as to which the Option was properly
exercised before such termination.
6. PARTIAL EXERCISE. Exercise of this Option up to the extent above
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stated may be made in part at any time and from time to time within the above
limits, except that this Option may not be exercised for a fraction of a share
unless such exercise is with respect to the final installment of Option Shares
subject to this Option and a fractional share (or cash in lieu thereof) must be
issued to permit the Optionee to exercise completely such final installment.
Any fractional share with respect to which an
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installment of this Option cannot be exercised because of the limitation
contained in the preceding sentence shall remain subject to this Option and
shall be available for later purchase by the Optionee in accordance with the
terms hereof.
7. PAYMENT OF PRICE. The Option price is payable in United States
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dollars only and must be paid:
(a) in cash or by personal check, or any combination of the
foregoing, equal in amount to the Option price; or
(b) in the discretion of the Board of Directors, in cash, by
personal check, by delivery of shares of the Company's Common Stock or Preferred
Stock having a fair market value (as determined by the Board of Directors) equal
as of the date of exercise to the Option price, by delivery of a personal
recourse promissory note, through the delivery of an assignment to the Company
of a sufficient amount of the proceeds from the sale of the Common Stock
acquired upon exercise of the Option and an authorization to the broker or
selling agent to pay that amount to the Company, which sale shall be at the
Optionee's direction at the time of exercise, or by any combination of the
foregoing, equal in amount to the Option price.
If the Optionee delivers shares of Common Stock or Preferred Stock held by
the Optionee (the "Old Stock") to the Company in full or partial payment of the
option price, and the Old Stock so delivered is subject to restrictions or
limitations imposed by agreement between the Optionee and the Company, the
Common Stock or Preferred Stock received by the Optionee on the exercise of this
Option shall be subject to all restrictions and limitations applicable to the
Old Stock to the extent that the Optionee paid for such Common Stock or
Preferred Stock by delivery of Old Stock, in addition to any restrictions or
limitations imposed by this Agreement.
8. AGREEMENT TO PURCHASE FOR INVESTMENT. By acceptance of this Option,
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the Optionee agrees that a purchase of Option Shares under this Option will not
be made with a view to their distribution, as that term is used in the
Securities Act of 1933, as amended (the "Securities Act"), unless in the opinion
of counsel to the Company such distribution is in compliance with or exempt from
the registration and prospectus requirements of the Securities Act and
applicable state securities laws, and the Optionee agrees to sign a certificate
to such effect at the time of exercising this Option and agrees that the
certificate for the Option Shares so purchased may be inscribed with a legend to
ensure compliance with the Securities Act and applicable state securities laws.
THIS SECTION SHALL NOT APPLY IN THE EVENT THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS OPTION HAVE BEEN REGISTERED ON A REGISTRATION STATEMENT ON
FORM S-8 WHICH IS EFFECTIVE AND CURRENT UNDER THE SECURITIES ACT.
9. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of
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this Agreement, this Option may be exercised by written notice to the Vice
President and General Counsel of the Company, at its Bedford, Massachusetts
office, or to such transfer
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agent as the Company shall designate. Such notice shall state the election to
exercise this Option and the number of Option Shares in respect of which it is
being exercised and shall be signed by the person or persons so exercising this
Option. Such notice shall be accompanied by payment of the full purchase price
of such Option Shares, and the Company or its transfer agent shall deliver a
certificate or certificates representing such Option Shares as soon as
practicable after the notice shall be received. The certificate or certificates
for the Option Shares as to which this Option shall have been so exercised shall
be registered in the name of the person or persons so exercising this Option
(or, if this Option shall be exercised by the Optionee and if the Optionee shall
so request in the notice exercising this Option, shall be registered in the name
of the Optionee and another person jointly, with right of survivorship) and
shall be delivered as provided above to or upon the written order of the person
or persons exercising this Option. In the event this Option shall be exercised,
pursuant to Section 5 hereof, by any person or persons other than the Optionee,
such notice shall be accompanied by appropriate proof of the right of such
person or persons to exercise this Option. All Option Shares that shall be
purchased upon the exercise of this Option as provided herein shall be fully
paid and nonassessable.
10. OPTION NOT TRANSFERABLE. This Option is not transferable or
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assignable except (a) to members of Employee's immediate family pursuant to a
bona fide gift or (b) by will or by the laws of descent and distribution.
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During the Optionee's lifetime only the Optionee or a donee who is a member of
Employee's immediate family can exercise this Option.
11. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of this
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Option imposes no obligation on the Optionee to exercise it.
12. NO OBLIGATION TO CONTINUE BUSINESS RELATIONSHIP. The Company and any
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affiliated corporations are not by the Plan or this Option obligated in any
manner to continue to maintain a Business Relationship with the Optionee.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Optionee shall have no
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rights as a stockholder with respect to the Option Shares subject to this
Agreement until a stock certificate therefor has been issued to the Optionee and
is fully paid for by the Optionee. Except as is expressly provided in the Plan
with respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the record
date is prior to the date such stock certificate is issued.
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS. It is the purpose of this
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Option to encourage the Optionee to work for the best interests of the Company
and its stockholders. Because, for example, that might require the issuance of
a stock dividend or a merger with another corporation, the purpose of this
Option would not be served if such a stock dividend, stock split, merger or
similar occurrence would cause the Optionee's rights hereunder to be diluted or
terminated and thus be contrary to the Optionee's interest. The Plan contains
extensive provisions designed to preserve options at full value in a number of
contingencies. Therefore, provisions in the Plan for
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adjustment with respect to stock subject to options and the related provisions
with respect to successors to the business of the Company are hereby made
applicable hereunder and are incorporated herein by reference. In the event of
any stock dividend, stock split, recapitalization or other change in the capital
structure of the Company, this Option and the Option price shall be equitably
adjusted and, in lieu of issuing fractional shares upon exercise thereof, this
Option (and the corresponding Option Shares) shall be rounded upward or downward
to the nearest whole share (rounding upward for all amounts equal to or in
excess of .51). In particular, without affecting the generality of the
foregoing, it is understood that for the purposes of Sections 3 through 5
hereof, inclusive, maintaining or being involved in a Business Relationship with
the Company includes maintaining or being involved in a Business Relationship
with an affiliated corporation.
15. WITHHOLDING TAXES. The Optionee hereby agrees that the Company may
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withhold from the Optionee's wages or other remuneration the appropriate amount
of federal, state and local taxes attributable to the Optionee's exercise of any
installment of this Option. At the Company's discretion, the amount required to
be withheld may be withheld in cash from such wages or other remuneration, or in
kind from the Common Stock otherwise deliverable to the Optionee on exercise of
this Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's wages or other remuneration sufficient to satisfy
the Company's withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount underwithheld.
16. [THIS SECTION INTENTIONALLY OMITTED].
17. NO EXERCISE OF OPTION IF ENGAGEMENT OR EMPLOYMENT TERMINATED FOR
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CAUSE. If the employment or engagement of the Optionee is terminated for
"Cause," this Option shall terminate on the date of such termination and this
Option shall thereupon not be exercisable to any extent whatsoever. "Cause" is
conduct, as determined by the Board of Directors, involving one or more of the
following: (i) gross misconduct by the Optionee which is materially injurious
to the Company; or (ii) the commission of an act of embezzlement, fraud or
deliberate disregard of the rules or policies of the Company which results in
material economic loss, damage or injury to the Company; or (iii) the
unauthorized disclosure of any trade secret or confidential information of the
Company or any third party who has a business relationship with the Company or a
violation of any noncompetition covenant or assignment of inventions obligation
with the Company; or (iv) the commission of an act which induces any customer or
prospective customer of the Company to break a contract with the Company or to
decline to do business with the Company; or (v) the conviction of the Optionee
of a felony involving any financial impropriety or which would materially
interfere with the Optionee's ability to perform his or her services or
otherwise be injurious to the Company; or (vi) the failure of the Optionee to
perform in a material respect his or her employment or engagement obligations
without proper cause. In making such determination, the Board of Directors
shall act fairly and in utmost good faith.
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18. COMPANY'S RIGHT OF REPURCHASE. (A) RIGHTS OF REPURCHASE. If any of
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the events specified in Section 18(b) below occur, then,
(i) with respect to Option Shares acquired upon exercise of this
Option prior to the occurrence of such event, within 90 days after the
Company receives actual knowledge of the event, and
(ii) with respect to Option Shares acquired upon exercise of this
Option after the occurrence of such event, within 90 days following the
date of such exercise,
(in either case, the "Repurchase Period"), the Company shall have the right, but
not the obligation, to repurchase any or all the Option Shares from the
Optionee, or his or her transferee or legal representatives, as the case may be
(the "Repurchase Option"). The Repurchase Option shall be exercised by the
Company by giving the Optionee, or his or her transferee or legal
representative, written notice of its intention to exercise the Repurchase
Option on or before the last day of the Repurchase Period. If any of the events
specified in Section 18(b)(i)-(iii) occur, then the Company may exercise its
Repurchase Option by tendering to the Optionee, or his or her transferee or
legal representative, an amount equal to the higher of the Option exercise price
or the fair market value of the Option Shares. The Company may, in exercising
the Repurchase Option, designate one or more nominees to purchase the Option
Shares either within or without the Company. Upon timely exercise of the
Repurchase Option in the manner provided in this Section 18(a), Optionee, or his
or her transferee or legal representative, shall deliver to the Company the
stock certificate or certificates representing the Option Shares, duly endorsed
and free and clear of any and all liens, charges and encumbrances.
If the Option Shares are not purchased under the Repurchase Option, the
Optionee and his or her successor in interest, if any, will hold any of the
Option Shares in his or her possession subject to all of the provisions of this
Agreement.
(B) COMPANY'S RIGHT TO EXERCISE REPURCHASE OPTION. The Company
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shall have the Repurchase Option in the event that any of the following events
shall occur:
(i) The receivership, bankruptcy or other creditor's proceeding
regarding the Optionee or the taking of any of Optionee's Option Shares
by legal process, such as a levy of execution;
(ii) Distribution of shares held by the Optionee to his or her
spouse as such spouse's joint or community interest pursuant to a decree
of dissolution, operation of law, divorce, property settlement agreement
or for any other reason, except as may be otherwise permitted by the
Company; or
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(iii) The termination of the Optionee for "Cause" as defined in
Section 17.
(C) DETERMINATION OF FAIR MARKET VALUE. The fair market value of
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the Option Shares, as used in this Section 18, shall be an amount per share
determined on the basis of the price at which shares of the Common Stock could
reasonably be expected to be sold in an arms-length transaction, for cash, other
than on an installment basis, to a person not employed by, controlled by, in
control of or under common control with the Company. Fair market value shall be
determined by the Board of Directors, giving due consideration to recent grants
of incentive stock options for shares of Common Stock, recent arms-length
transactions involving shares of the Common Stock, if any, earnings of the
Company to the date of such determination, projected earnings of the Company,
the effect of the transfer restrictions to which the Option Shares are subject
under law and this Agreement, the absence of a public market for the Common
Stock and such other matters as the Board of Directors deems pertinent. If the
Common Stock of the Company is traded on any national securities exchange or the
Nasdaq National Market, fair market value shall be (i) the average of the high
and low closing sale prices, or (ii) the average of the last reported sale price
on the Nasdaq National Market, or (iii) the average of the closing bid prices
for the twenty (20) consecutive trading days preceding the date the Company
exercises its Repurchase Option and tenders payment for the Option Shares. The
determination by the Board of Directors of the fair market value shall be
conclusive and binding. The fair market value of the Option Shares shall be
determined as of the day on which the event occurs.
19. [THIS SECTION INTENTIONALLY OMITTED].
20. METHOD OF PAYMENT OF OPTION. The Company may, in its sole discretion,
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pay the purchase price for any Option or Option Shares repurchased by it
hereunder under Sections 18 either in cash or, alternatively, if such purchase
price exceeds $2,000, by delivery on the date of purchase of a check in an
amount equal to at least fifteen percent (15%) of such purchase price, together
with the Company's unsecured promissory note in a principal amount equal to the
remainder of such purchase price (the "Note"). In the event of payment by Note,
the Note shall be due and payable not later than three years from the date of
issuance, with principal and interest thereon payable on an unsecured basis in
equal annual installments. Interest on the Note shall be equal to the lowest
applicable Federal rate, as defined in Section 1274(d) of the Code, as of the
date of the Note's issuance.
21. GOVERNING LAW. This Agreement shall be governed by and interpreted in
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accordance with the internal laws of the State of Delaware.
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IN WITNESS WHEREOF the Company and the Optionee have caused this instrument
to be executed, and the Optionee whose signature appears below acknowledges
receipt of a copy of the Plan and acceptance of an original copy of this
Agreement.
____________________________ ASTEA INTERNATIONAL INC.
SIGNATURE OF OPTIONEE
____________________________ By:____________________________
Name Xxxxxx X. Xxxxxx
Vice President and General Counsel
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Street Address
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City State Zip Code
