<PAGE>
EXHIBIT 10.11
DESKTALK SYSTEMS, INC.,
A CALIFORNIA CORPORATION
1995 INCENTIVE STOCK OPTION PLAN
Effective January 4, 1995
As Amended
<PAGE>
TABLE OF CONTENTS
1995 INCENTIVE STOCK OPTION PLAN
Effective January 4, 1995
Paragraph Page
--------- ----
1. PURPOSE ........................................................... 1
2. STOCK SUBJECT TO THE PLAN ......................................... 1
3. ADMINISTRATION .................................................... 1
4. EMPLOYEES ELIGIBLE ................................................ 2
5. OPTION PRICE ...................................................... 2
6. TERM OF OPTIONS ................................................... 2
7. EXERCISE OF OPTIONS ............................................... 2
8. NON-TRANSFERABILITY OF OPTIONS .................................... 3
9. TERMINATION OF EMPLOYMENT ......................................... 3
10. DISABILITY OF OPTIONEE ............................................ 3
11. DEATH OF OPTIONEE ................................................. 3
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION ........................ 4
13. MERGER OR CONSOLIDATION ........................................... 4
14. VESTING OF RIGHTS UNDER OPTIONS ................................... 4
15. RESTRICTIVE STOCK PURCHASE AGREEMENT .............................. 4
16. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS ..................... 5
17. NO RESTRICTION ON CORPORATE ACTION ................................ 5
18. RESTRICTED SECURITIES ............................................. 5
19. NON-ASSIGNABILITY ................................................. 5
20. APPLICATION OF FUNDS .............................................. 6
21. AMENDMENT AND TERMINATION ......................................... 6
22. EFFECTIVE DATE .................................................... 6
23. GOVERNING LAW; CONSTRUCTION ....................................... 6
24. TITLES AND HEADINGS ............................................... 6
(ii)
<PAGE>
DESKTALK SYSTEMS, INC.
1995 INCENTIVE STOCK OPTION PLAN
Effective January 4, 1995
As Amended
DESKTALK SYSTEMS, INC., a California corporation (the "Company"),
hereby formulates and adopts the following 1995 INCENTIVE STOCK OPTION PLAN (the
"1995 Plan") for key employees of the Company.
1. PURPOSE. The purpose of the 1995 Plan is to further the growth and
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development of the Company by encouraging key employees of the Company to obtain
a proprietary interest in the Company through the ownership of Common Stock,
thereby providing such employees with additional incentive to continue in the
employ and to promote the success of the Company, and affording the Company the
means of attracting to its service employees of outstanding quality.
2. STOCK SUBJECT TO THE PLAN.
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2.1 An aggregate of five hundred thousand (500,000) shares of
Common Stock of the Company (the "Common Stock"), subject however, to adjustment
or change pursuant to Paragraph 12 hereof, shall be reserved for issuance upon
the exercise of options which may be granted from time to time in accordance
with 1995 Plan (the "Options"). If, for any reason, an Option shall lapse,
expire or terminate without having been exercised in full, the unpurchased
shares covered thereby shall again be available for the purposes of the 1995
Plan.
2.2 Subject to Paragraph 2.1 above, the aggregate fair market
value (determined as of the time the option is granted) of the Common Stock
underlying Options granted to any key employee in any calendar year shall not
exceed $100,000 calculated under section 422 (d) of the Internal Revenue Code of
1986, as amended, with respect to such employee.
3. ADMINISTRATION. The Board of Directors shall administer the 1995
--------------
Plan and, subject to the provisions of the 1995 Plan, shall have authority in
its discretion to determine the employees to whom, and the time or times at
which, Options shall be granted and the number of shares to be subject to each
Option. In making such determination, the Board of Directors may take into
account the nature of the services rendered by the respective employees, their
present and potential contributions to the Company's success and such other
factors as the Board of Directors in its sole discretion shall deem relevant.
Subject to the express provisions of the 1995 Plan, the Board of Directors shall
also have the authority to interpret the 1995 Plan, to prescribe, amend and
rescind rules and regulations relating to it, to the term and the terms and
provisions of the respective Option Agreements, which shall be substantially in
the form attached hereto as Exhibit "A", and to make all of the determinations
necessary or advisable for the administration of the 1995 Plan all of which
determinations shall be conclusive and not subject to review.
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<PAGE>
4. EMPLOYEES ELIGIBLE. Options may be granted under the 1995 Plan to
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any key employee of the Company. Employees who are also officers or directors of
the Company shall not by reason of such offices be ineligible to receive Options
under the 1995 Plan. No person who would own, directly or indirectly,
immediately after the granting of an Option to him, more than ten percent (10%)
of the total combined voting power or value of all classes or stock of the
Company shall be eligible to receive any options under the 1995 Plan, unless the
exercise price of the Option granted is at least 110 percent of the fair market
value of the stock subject to the Option. An employee receiving an option under
the 1995 Plan is hereinafter referred to as an "Optionee".
5. OPTION PRICE. The exercise price per share for each option shall be
------------
equal to the fair market value for each share of the common stock of the Company
on the date of grant as determined by the Board of Directors after consideration
of the earnings history, book value and prospects of the Company in light of
market conditions generally. The exercise price as fixed by the Board of
Directors shall be conclusive and not subject to review.
6. TERM OF OPTIONS. The term of each Option shall be six years from
---------------
the date of grant thereof, but shall be subject to earlier termination as herein
provided. Except as provided in Paragraphs 10 and 11 hereof, no Option shall be
exercisable unless the Optionee shall have been an employee of the Company
continuously from the date of grant to the date of exercise. The Board of
Directors may, in its discretion, accelerate the exercisability of all or part
of an Optionee's Option that is not exercisable as of the date of death,
disability or employment termination of the optionee.
7. EXERCISE OF OPTIONS.
-------------------
7.1 No Option granted under the 1995 Plan shall be exercisable
until one year from the date of grant. Thereafter each Option shall be
exercisable as follows:
7.1.1 At the end of one year from such date of grant,
up to fifty percent (50%) of the total shares subject to such Option; and
7.1.2 At the end of two years from the date of grant and
until termination of the option, up to one hundred percent (100%), provided,
however, that no option may be exercised as to less than one hundred (100)
shares at any one time (or the remaining shares then purchasable under the
option if less than one hundred (100) shares).
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<PAGE>
7.2 The exercise of an Option shall be contingent upon receipt
from the optionee of a written representation that at the time of such exercise
it is the Optionee's then present intention to acquire the Option shares for
investment and not with a view to distribution or resale thereof, and upon
receipt by the Company of cash, or a certified or bank cashier's check to its
order, for the full purchase price of such shares and such other representations
as may be reasonably required by the Corporation.
7.3 An Optionee shall have none of the rights of a shareholder
with respect to shares subject to the option until a certificate for such shares
shall have been issued to the Optionee upon the due exercise of the option.
8. NON-TRANSFERABILITY OF OPTIONS. No Option granted pursuant to the
------------------------------
1995 Plan shall be transferable otherwise than by a Will or the laws of descent
and distribution and an Option may be exercised, during the lifetime of the
optionee, only by the optionee.
9. TERMINATION OF EMPLOYMENT. In the event that the employment of an
-------------------------
Optionee shall be terminated by the Company for any reason, other than by reason
of death or disability, such Option shall forthwith terminate, lapse and expire,
except that within one month from the date of termination the Optionee may
exercise an Option to the extent such Option was exercisable by such Optionee at
the date of termination. So long as an Optionee shall continue to be in the
employ of the Company, his or her Option shall not be affected by any change of
duties or position. Absence on leave approved by the Company shall not be
considered an interruption of employment for any purpose under the 1995 Plan.
Nothing in the 1995 Plan or in any Option Agreement granted hereunder shall
confer upon any optionee any right to continue in the employ of the Company or
interfere in any way with the right of the Company to terminate the employment
of an optionee at any time.
10. DISABILITY OF OPTIONEE. If the employment of an Optionee shall be
----------------------
terminated by reason of disability, such Optionee may, within three months from
the date of termination for such cause, exercise the option to the extent such
Option was exercisable by such Optionee at the date of termination.
Notwithstanding the foregoing, no option may be exercised after four years from
the date of its grant.
11. DEATH OF OPTIONEE. If an Optionee shall die while in the employ of
-----------------
the Company, the Option theretofore granted to him or her may be exercised, but
only to the extent such Option was exercisable by the optionee at the date of
death, by the legatees of such optionee under his or her Last Will, or by his or
her personal representative or distributees, within three months from the date
of death, but in no event after four years from the date of the grant of the
Option.
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<PAGE>
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If at any time after
------------------------------------------
the date of grant of an Option, the Company shall, by stock dividend, stock
split, reverse stock split, combination, reclassification or exchange or through
merger or consolidation, or otherwise, change its shares of Common Stock into a
different number or kind or class of shares or other securities or property,
then the number of shares covered by such Option and the price per share thereof
shall be proportionally adjusted for any such change by the Board of Directors
whose determination thereon shall be conclusive. In the event that a fraction of
a share results from the foregoing adjustment, the fraction shall be eliminated
and the price per share of the remaining shares subject to the Option adjusted
accordingly.
13. MERGER OR CONSOLIDATION. After a merger of one or more corporations
-----------------------
into the Company in which the Company shall survive, or after the consolidation
of the Company and one or more corporations, in which the resulting corporation
remains as an independent corporation, Optionee shall, at the same cost, be
entitled upon exercise of an Option to receive (subject to any required action
by shareholders) such securities of the surviving or resulting corporation as
the Board of Directors of such corporation, in its sole discretion, and without
liability to any person, shall determine to be equivalent, as nearly as
practicable to the nearest whole number and class of shares, to the shares, that
were then subject to such Option, and such shares, after such merger or
consolidation, shall be deemed to be shares of Common Stock for all purposes of
the 1995 Plan.
14. VESTING OF RIGHTS UNDER OPTIONS. Neither anything contained in the
-------------------------------
1995 Plan nor in any resolution adopted or to be adopted by the Board of
Directors or the shareholders of the Company shall constitute the vesting of any
rights under any Option. The vesting of such rights shall take place only when a
written option Agreement substantially in the form of the Option Agreement which
is attached to the 1995 Plan as Exhibit "A" shall be duly executed and delivered
by and on behalf of the Company and the employee to whom the option shall be
granted.
15. RESTRICTIVE STOCK PURCHASE AGREEMENT. Concurrently with the
------------------------------------
exercise of an option, the optionee shall execute a Restrictive Stock Purchase
Agreement (the "Agreement") substantially in the form attached as Exhibit "B" to
the 1995 Plan and incorporated herein by this reference. The purpose of the
Restrictive Stock Purchase Agreement is to provide the optionee with an
opportunity to dispose of his or her Common Stock upon the occurrence of certain
events, to provide that such Common Stock shall be transferable only upon
compliance with the terms and conditions of the Agreement and to provide for
continuity of operating, administrative and sales personnel of the Company to be
derived from the opportunity of share ownership.
4
<PAGE>
16. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS. Anything in the 1995
---------------------------------------------
Plan or any agreement entered into pursuant to the 1995 Plan to the contrary
notwithstanding, if, at any time specified herein or therein for the making of
any determination or the issuance or other distribution of shares of Common
Stock, as the case may be, any law, regulation or requirement of any
governmental authority having jurisdiction shall require either the Company or
the Optionee (or the Optionee's beneficiary) , as the case may be, to take any
action in connection with such determination, the shares then to be issued or
distributed, or the making of such determination or payment, as the case may be,
shall be deferred until such action shall have been taken.
17. NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the 1995
----------------------------------
Plan shall be construed to prevent the Company from taking any corporate action
that is deemed by the Board of Directors of the Company to be appropriate or in
the best interest of the Company, whether or not such action would have an
adverse effect on the 1995 Plan or any award made under the 1995 Plan. No
Optionee, beneficiary or other person shall have any claim against the Company
as the result of any such action.
18. RESTRICTED SECURITIES. All Options and all shares issued pursuant
---------------------
to the 1995 Plan shall not be registered under the Federal Securities Laws or
any State Securities Laws, and the Option and all such shares shall be
"Restricted Securities" as defined in Rule 144 of the General Rules and
Regulations of the Securities Act of 1933, as amended (the "Act") and may not be
offered for sale, sold, or otherwise transferred except pursuant to an effective
registration statement under the Act or pursuant to an exemption from
registration under the Act. Accordingly, all certificates evidencing shares
covered by an option shall bear a restrictive legend to this effect.
19. NON-ASSIGNABILITY. Neither an optionee nor an Optionee's
-----------------
beneficiary shall have the power or right to sell, exchange, pledge, transfer,
assign or otherwise encumber or dispose of such Optionee's or beneficiary's
interest arising under the 1995 Plan; nor shall such interest be subject to
seizure for the payment of an Optionee's or beneficiary's debts, judgments,
alimony or separate maintenance or be transferable by operation of law in the
event of an Optionee's or beneficiary's bankruptcy or insolvency and to the
extent any such interest arising under the 1995 Plan is awarded to a spouse
pursuant to any marital dissolution proceeding, such interest shall be deemed to
be terminated and forfeited notwithstanding any vesting provisions or other
terms herein or in the agreement evidencing such award.
5
<PAGE>
20. APPLICATION OF FUNDS. The proceeds received from the sale of shares
--------------------
pursuant to the 1995 Plan will be added to the working capital of the Company
and be available for general corporate purposes.
21. AMENDMENT AND TERMINATION. The Board of Directors may from time to
-------------------------
time and at any time suspend, discontinue or terminate the 1995 Plan and any
awards and grants hereunder. The Board of Directors may amend the 1995 Plan from
time to time in such respects as it may deem advisable.
22. EFFECTIVE DATE. The 1995 Plan, having been adopted unanimously by
--------------
the Board of Directors at a meeting duly held on January 4, 1995, shall be
effective as of such date, upon, and subject to, its approval by a majority in
interest of the Common Stock of the Company on or before the first anniversary
of such date. Unless renewed by the Board of Directors, the 1995 Plan shall
terminate on December 31, 2004.
23. GOVERNING LAW; CONSTRUCTION. All rights and obligations under the
---------------------------
1995 Plan shall be governed by, and the 1995 Plan shall be construed in
accordance with, the laws of the State of California without regard to the
principles of conflicts of laws.
24. TITLES AND HEADINGS. Titles and headings herein are for purposes of
-------------------
reference only, and shall in no way limit, define or otherwise affect the
meaning or interpretation of any provisions of the 1995 Plan.
6
<PAGE>
Exhibit "A"
OPTION AGREEMENT
DESKTALK SYSTEMS, INC.,
A CALIFORNIA CORPORATION
<PAGE>
TABLE OF CONTENTS
OPTION AGREEMENT
Paragraph Page
--------- ----
1. PURCHASE PRICE............................................. 1
2. EXERCISE OF OPTION......................................... 1
3. METHOD OF EXERCISE......................................... 1
4. TERMINATION OF EMPLOYMENT.................................. 2
5. DEATH OR DISABILITY........................................ 2
6. ADJUSTMENTS TO CAPITALIZATION.............................. 2
7. MERGER OR CONSOLIDATION.................................... 2
8. VESTING OF RIGHTS.......................................... 3
9. NON-TRANSFERABILITY........................................ 3
10. NOTICES................................................... 3
11. INVESTMENT REPRESENTATION................................. 3
12. RESTRICTIVE STOCK PURCHASE AGREEMENT...................... 3
13. INUREMENT................................................. 4
14. GOVERNING LAW............................................. 4
(i)
<PAGE>
Exhibit "A"
DESKTALK SYSTEMS, INC.
OPTION AGREEMENT
This Agreement is made and entered into by and between DESKTALK
SYSTEMS, INC., a California corporation (the "Company"), with its principal
office at 19401 South Vermont Avenue, Suite F100, Torrance, California 90502,
and __________________________________________ (the "Optionee"), whose address
is___________________________________________, as of the _________day
of________________________,199__, pursuant to the 1995 Incentive Stock Option
Plan of the Company (the "1995 Plan").
As an incentive and an inducement to the Optionee to continue in the
employ of the Company, and to devote his or her best efforts to promote the
success of the Company, the Company hereby grants to the Optionee the option to
purchase from the Company, at the times and upon the terms and conditions
hereinafter set forth, an aggregate of shares of common stock (the "Shares") of
the Company (the "Option").
1. PURCHASE PRICE. Subject to the terms and conditions hereinafter set
--------------
forth, the purchase price of the Shares shall be ______________ per share.
2. EXERCISE OF OPTION. The Option granted herein may be exercised at
------------------
the end of one year from the date hereof as to up to fifty percent (50%) of the
total Shares and at the end of two years from the date hereof and until
termination of the option as to up to one hundred percent (100%) of the total
Shares, provided, however, that this Option may not be exercised as to less than
one hundred shares at any one time (or the remaining shares then purchasable
under the Option if less than one hundred shares) and may not be exercised more
than six years from the date of grant, unless sooner terminated pursuant to the
terms hereof.
3. METHOD OF EXERCISE. Subject to prior termination as provided in
------------------
Paragraphs 4 and 5 hereof, the Option shall be exercisable as set forth above by
giving ten days written notice of exercise to the Company, which notice shall
specify the number of Shares to be purchased and the purchase price to be paid
therefore, and concurrently making payment to the Company of such purchase price
by certified or bank cashier's check payable to the order of the Company. Upon
such exercise of the Option, the Company shall promptly issue the Shares so
purchased. Such notice of exercise shall be accompanied by the letter required
by Paragraph 11, below.
1
<PAGE>
4. TERMINATION OF EMPLOYMENT. If the Optionee's services as an
-------------------------
employee of the Company shall terminate at any time and for any reason, with or
without cause, the Option, together with all rights, privileges and obligations
hereunder, shall terminate forthwith; provided, however, that for one month
after such date of termination any unexercised portion of the Option which might
have been exercised at the date of such termination may be exercised, in the
manner provided in Paragraph 3 above. Notwithstanding the foregoing, no Option
may be exercised after four years from the date of its grant.
5. DEATH OR DISABILITY. If the optionee's services as an employee of
-------------------
the Company shall terminate by reason of death or disability, the option,
together with all rights, privileges and obligations hereunder, shall terminate
forthwith; provided, however, that for three months after such date of
termination any unexercised portion of the Option which might have been
exercised at the date of such termination may be exercised, in the manner
provided in Paragraph 3 above, by the Optionee or the Optionee's executor or
administrators. Notwithstanding the foregoing, no option may be exercised after
four years from the date of its grant.
6. ADJUSTMENTS TO CAPITALIZATION. If at any time after the date
-----------------------------
hereof, the Company shall, by stock dividend, stock split, reverse stock split,
combination, reclassification or exchange or through merger or consolidation, or
otherwise, change its shares of common stock into a different number or kind or
class of shares or other securities or property, the number of shares
purchasable upon exercise of the Option and the purchase price therefore shall
be proportionally adjusted by the Board of Directors pursuant to the 1995 Plan.
7. MERGER OR CONSOLIDATION. After a merger of one or more corporations
-----------------------
into the Company in which the Company shall survive, or after the consolidation
of the Company and one or more corporations, in which the resulting corporation
remains as an independent corporation, Optionee shall, at the same cost, be
entitled upon exercise of an Option to receive (subject to any required action
by shareholders) such securities of the surviving or resulting corporation as
the Board of Directors of such corporation, in its sole discretion, and without
liability to any person, shall determine to be equivalent, as nearly as
practicable to the nearest whole number and class of shares, to the Shares, and
such shares, after such merger or consolidation, shall be deemed to be Shares
subject to the 1995 Plan.
2
<PAGE>
8. VESTING OF RIGHTS. The Optionee (or any executor or administrator
-----------------
of the optionee who may exercise the Option pursuant to this Agreement) shall
not be deemed to be a shareholder of the Company nor shall he or she have any
rights or privileges as a shareholder of the Company by virtue of the Option,
and he or she shall acquire such status, rights and privileges only when, as and
to the extent the Option is duly exercised in accordance with the terms hereof.
9. NON-TRANSFERABILITY. The Option and the rights and privileges
-------------------
conferred hereby shall not be transferable other than by will or by the laws of
descent and distribution, and during the Optionee's lifetime shall be
exercisable only by the optionee.
10. NOTICES. Any notice required to be given under the terms of this
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Agreement, including any written notice of exercise given pursuant to Paragraph
3 hereof, shall be given by registered or certified mail, return receipt
requested. Any such notice shall be addressed, if to the Company, at its address
as set forth above, to the attention of its President, and if to the Optionee,
at his or her address as set forth above, or at such other address as either
party may hereafter designate by notice to the other.
11. INVESTMENT REPRESENTATION. If the Shares have not been registered
-------------------------
under the Securities Act of 1933, as amended (the "Act"), the exercise of any
part or all of the Option shall be conditioned upon delivery to the Company of a
letter from the Optionee addressed to the Company stating in substance (i) that
the Shares proposed to be acquired by the Optionee upon such exercise are being
acquired for his or her own account for investment and not with a view to sale
or distribution, and (ii) that the optionee understands that the Shares acquired
must be held indefinitely unless they are subsequently registered under the Act,
or an exemption from such registration is available.
12. RESTRICTIVE STOCK PURCHASE AGREEMENT. Concurrently with the
------------------------------------
exercise of an Option, the Optionee shall execute a Restrictive Stock Purchase
Agreement (the "Agreement") substantially in the form attached as Exhibit "B" to
the 1995 Plan and incorporated herein by this reference. The purpose of the
Restrictive Stock Purchase Agreement is to provide the Corporation with an
opportunity to acquire the Shares upon the occurrence of certain events, to
provide that such Shares shall be transferable only upon compliance with the
terms and conditions of the Agreement and to provide for continuity of
operating, administrative and sales personnel of the Company to be derived from
the opportunity of share ownership.
3
<PAGE>
13. INUREMENT. This Agreement shall be binding. upon and inure to the
---------
benefit of any successor or successors of the Company.
14. GOVERNING LAW. This Agreement shall be interpreted under the laws
-------------
of the State of California applicable to agreements entered into and to be
performed entirely within such state.
IN WITNESS WHEREOF, this Agreement has been executed by a duly
authorized officer of the Company and by the Optionee as of the day and year set
forth below.
Dated: _____________________ DESKTALK SYSTEMS, INC.
By___________________________
Dated: _____________________ NAME
By____________________________
Optionee
4
<PAGE>
Exhibit "B"
RESTRICTIVE STOCK PURCHASE AGREEMENT
BY AND BETWEEN
DESKTALK SYSTEMS, INC.,
A CALIFORNIA CORPORATION
AND
_______________________________________________________
<PAGE>
TABLE OF CONTENTS
RESTRICTIVE STOCK PURCHASE AGREEMENT
Paragraph Page
--------- ----
1. RESTRICTION ON SUBJECT STOCK............................ 1
2. INTER VIVOS TRANSFERS................................... 2
3. PURCHASE ON TERMINATION................................. 3
4. PURCHASE PRICE.......................................... 4
5. LEGEND CONDITION; CERTIFICATES.......................... 4
6. CONTINUED EMPLOYMENT.................................... 5
7. TERMINATION............................................. 5
8. INVESTMENT REPRESENTATION............................... 5
9. GOVERNING LAW; SUCCESSORS............................... 5
10. ENFORCEMENT............................................. 6
11. ARBITRATION............................................. 6
12. SEVERABILITY............................................ 6
13. ATTORNEYS, FEES......................................... 6
14. PARAGRAPH HEADINGS...................................... 7
15. NOTICES................................................. 7
16. ENTIRE AGREEMENT........................................ 7
17. REPRESENTATION OF COUNSEL............................... 8
18. EFFECTIVE DATE.......................................... 8
(i)
<PAGE>
Exhibit "B"
RESTRICTIVE STOCK PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of _________________, 19_____, by
and between DESKTALK SYSTEMS, INC., a California corporation (the "Company"),
located at 19401 South Vermont Avenue, Suite F100, Torrance, California 90502
and
_________________________________________________________________________(the
"Purchaser"), with reference to the following facts:
A. The Company is a corporation engaged in the business of
heterogeneous computer network integration and systems architecture;
B. The authorized capitalization of the Company consists of
1,000,000 shares of common stock (the "Common Stock");
C. The Purchaser has been engaged as a key employee of the Company,
and in connection with such employment the Company granted Purchaser an option
to purchase_______________(___) shares of Common Stock (the "Option") pursuant
to its 1995 Incentive Stock Option Plan, and evidenced by an Option Agreement
dated _____________________, 19_______(the "Option Agreement");
D. The Purchaser has exercised the Option with respect to
___________________ (_____) shares of Common Stock (the "Subject Stock") for
_____________________($_____________) per share, pursuant to the terms of the
Option Agreement, and the Company proposes to issue the Subject Stock, subject
to the terms of this Agreement; and
E. Concurrently with such sale and issuance, the Company and the
Purchaser are entering into this Agreement (i) to provide for the disposition of
the Subject Stock upon the occurrence of certain events, (ii) to provide the
Subject Stock shall be transferable by the Purchaser only upon compliance with
the terms and conditions of this Agreement and (iii) to provide for continuity
of operating, administrative and sales personnel of the Company through equity
ownership of the Company.
NOW THEREFORE, in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. RESTRICTION ON SUBJECT STOCK. The Purchaser shall not have the
----------------------------
right or power either voluntarily or involuntarily (by operation of law or
otherwise) to sell, assign, transfer, pledge, hypothecate, or in any way
encumber any shares of the Subject Stock, or any legal or economic interest
therein without the prior written consent of the Company except in accordance
with this Agreement. In the event the Subject Stock is transferred in violation
of this Paragraph, the transfer shall be null and void.
1.1 If the Purchaser desires to sell all or any part of the
Subject Stock in a bona fide transaction during his lifetime, he shall give
written notice thereof to the Company. The notice shall name the proposed
transferee and specify the number of shares sought to be sold, the price offered
per share, the terms of payment and any other material terms or conditions of
the sale, including a written copy of the proposed offer to purchase.
<PAGE>
1.2 The Company shall have an option to purchase all or any part
of the Subject Stock the Purchaser desires to sell at the price and upon the
terms specified in the notice. The Company shall have thirty (30) days after the
receipt of such written notice to exercise its option. It shall exercise the
option by giving notice of such exercise to the Purchaser and by paying the
purchase price in the same manner as provided in the purchase offer.
1.3 If the Company does not exercise the option provided for in
this Paragraph 1 as to all of the shares offered for sale by the Purchaser, the
Purchaser shall be entitled to sell the Subject Stock not purchased free of any
restrictions. He shall be entitled to surrender to the Company his Certificates
representing such unpurchased shares and to receive in lieu thereof new
Certificates for an equal number of shares, without the endorsement provided for
in Paragraph 5.1 hereof. Thereupon, the Purchaser shall cease to be a party to
this Agreement.
1.4 If the offer from a proposed buyer for all or any part of the
Subject Stock states a consideration other than cash or evidences of
indebtedness, then for the purpose of determining the price stated in the offer,
the value of such other consideration shall be the fair market value of such
consideration either as agreed upon by the Purchaser and the Company within
twenty (20) days after the date of the notice or, if such agreement is not
reached, then as determined by arbitration pursuant to the procedure set forth
in Paragraph 11 hereof, and the parties shall be bound by the valuation so
determined.
2. INTER VIVOS TRANSFERS. Notwithstanding any provisions to the
---------------------
contrary contained in this Agreement, the Purchaser, while he or she is living,
may at any time transfer any or all of his or her interest in the fully paid
Subject Stock to his or her spouse, descendants, spouses of any such
descendants, or the trustee(s) of trust(s) at any time established by the
Purchaser for the sole benefit of one or more of such persons (hereinafter
collectively called "Family Members"). In such event, the Family Member shall
hold the interest involved subject to all of the terms of this Agreement and,
upon demand made at any time by any of the parties to this Agreement, shall
execute an appropriate instrument to that effect. All actions hereunder taken or
omitted by the Purchaser hereunder shall be binding on such Family
2
<PAGE>
Member. Any obligations of the Purchaser hereunder shall be obligations
of such Family Member. The Purchaser and Family Members of the Purchaser shall
be deemed one and the same indivisible unit, and all interest transferred as
permitted by this Paragraph shall be still deemed to be held and owned by the
Purchaser for the purpose of this Agreement.
3. PURCHASE ON TERMINATION.
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3.1 If the Purchaser
(i) dies;
(ii) becomes disabled (as hereinafter defined);
(iii) has his employment by the Company terminated with or
without cause;
(iv) voluntarily terminates his employment with the
Company;
(v) obtains or becomes subject to an order for relief
under the United States Bankruptcy Code, or a
similar law in other jurisdictions;
(vi) makes an assignment for the benefit of his or her
creditors;
(vii) is subject to legal process which shall permit the
taking of any shares of the Subject Stock including,
without limitation, division of the Subject Stock
with a spouse in a marital dissolution proceeding
(all of the foregoing being defined as a
"Triggering Event");
the Company shall have the right to purchase from the Purchaser (or his or her
estate, successors, assigns, executor, administrator or personal representative
or trustees of intervivos trusts referred to in Paragraph 2 hereof, hereinafter
collectively referred to as "personal representative"), and the Purchaser (or
his or her personal representative) shall sell to the Company, all of the
Subject Stock at the purchase price and on the terms and conditions hereinafter
set forth.
3.2 The closing for the purchase and sale (the "Closing"), if the
company exercises its right to acquire the subject stock, shall take place at
the office of the Company in Torrance, California within ninety (90) days after
the Company becomes aware of the Triggering Event; provided, however, if such
Triggering Event is occasioned by the death of the Purchaser, the Closing shall
take place within ninety (90) days after the later of (i) the qualification of
the personal representative of the Purchaser or (ii) the Company becoming aware
of the Triggering Event. The Company shall give the Purchaser, or his or her
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personal representative, and the Escrow Agent (as hereinafter defined) at least
ten (10) days prior notice of the time, date and place of Closing. At the
Closing, the Company shall remit the purchase price (as hereinafter defined) in
the manner set forth in Paragraph 4 hereof.
3.3 The term "disability", as used herein, shall mean such
mental or physical incapacity which prevents the Purchaser from thereafter
performing his normal and customary services for the Company. The determination
of whether such disability exists shall be made by the Company, in its sole
discretion, and the determination of the Company shall be final and binding upon
the Purchaser and his or her personal representative, if any.
3.4 The restrictions on transferability of the Subject Stock
shall lapse as to any shares of the Subject Stock not acquired by the Company
pursuant to this Agreement upon the occurrence of a Triggering Event.
4. PURCHASE PRICE. The purchase price to be paid by the Company for
--------------
each share of the Subject Stock shall be determined by first computing one
hundred percent (100%) of the fair market value of the Company, as of the end of
the last fiscal quarter prior to the Triggering Event. The fair market value as
so determined shall then be divided by the number of shares of Common Stock then
outstanding and the quotient multiplied by the number of shares of the Subject
Stock owned by the Purchaser. The determination of fair market value shall be
made by the Board of Directors after consideration of the earnings history, book
value, and prospects of the Company in light of market conditions generally. All
values fixed by the Board of Directors shall be conclusive, final and binding
upon (i) the Company and its successors and assigns and (ii) the Purchaser and
the personal representative of Purchaser. Any lien or encumbrance on the Subject
Stock as of the Closing shall reduce the purchase price by an amount equal to
the value of any and all such liens and encumbrances. The purchase price to be
paid by the Company for the Subject Stock shall be paid to the Purchaser (or his
or her personal representative) by cashier's or certified check at the Closing.
5. LEGEND CONDITION; CERTIFICATES.
------------------------------
5.1 Each stock certificate now or hereafter issued to the
Purchaser evidencing the Subject Stock shall be endorsed as follows:
"This stock certificate and the rights represented hereby are subject
to all of the terms, covenants, conditions and limitations of a certain
agreement made and entered into by__________________________________
with DESKTALK SYSTEMS, INC. , dated as of____________________, 1995
(the "Agreement"), a copy of which is on file with the Secretary of the
aforesaid Company, and the holder of this certificate accepts and
agrees to be bound by the Agreement."
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5.2 If the Purchaser is a California resident at the date of this
Agreement, then this Agreement shall be executed by the Purchaser and his or her
spouse, if any. If the Purchaser becomes a California resident at any time after
the date of this Agreement, his or her spouse shall promptly execute such an
acknowledgment.
5.3 Each stock certificate now or hereafter issued to the
Purchaser evidencing any shares of the Subject Stock shall bear any legend
required by the California Department of corporations or any other governmental
agency with respect to the issuance and transfer of the Subject Stock.
5.4 Each stock certificate now or hereafter issued to the
Purchaser evidencing any shares of the Subject Stock shall be endorsed as
follows:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and are being issued
pursuant to an exemption that limits their disposition and the transfer
of such shares is therefore subject to those limitations."
6. CONTINUED EMPLOYMENT. Nothing in this Agreement shall confer upon
--------------------
the Purchaser any right to continue in the employ of or to consult for the
Company or shall affect any right of the Company to terminate the employment of
Purchaser as would exist in the absence of this Agreement.
7. TERMINATION. All restrictions under this Agreement shall continue
-----------
until thirty (30) days after the Common Stock has been listed for trading on a
United States national securities exchange or has been trading in the
over-the-counter market for at least three months on the National Association of
Security Dealers Automated Quotation System. Thereafter this Agreement shall be
of no further force or effect.
8. INVESTMENT REPRESENTATION. The Purchaser represents that he or she
-------------------------
is purchasing the Subject Stock for his or her own account for investment
--
purposes only and not with a view to the distribution thereof, and that he or
she will not dispose of the Subject Stock in violation of the federal securities
laws of the United States, or the State of California, or the jurisdiction where
he or she resides.
9. GOVERNING LAW; SUCCESSORS. The execution, delivery, effectiveness
-------------------------
and performance of this Agreement shall be governed by and construed under the
local laws of the State of California.
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<PAGE>
This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, representatives, executors, administrators,
successors and assigns, and the Purchaser, by signing this Agreement, directs
his or her personal representative to open his or her estate promptly in the
courts of proper jurisdiction and to procure, execute and deliver all documents,
including, but not limited to, appropriate orders of the Superior Court, Probate
Division (or court of comparable jurisdiction), and estate and inheritance tax
waivers, as shall be required to effectuate the purposes of this Agreement.
10. ENFORCEMENT. The Purchaser acknowledges that it will be impossible
-----------
to measure in money the damage to the Company if the Purchaser fails to comply
with any of the restrictions or obligations herein imposed upon the transfer,
encumbrance or other disposition of the Subject Stock, that such restrictions
and obligations are material, and that in the event of any such failure, the
Company will not have an adequate remedy at law or in damages. Therefore, the
Purchaser hereby consents to the issuance of an injunction or the enforcement of
the equitable remedies against him or her upon the filing of an action by an
aggrieved party without bond or other security, to compel performance of the
terms hereof, and waives any defenses thereto, including, without limiting the
generality of the foregoing, the defenses of (a) failure of consideration, (b)
breach of any other provision of this Agreement, and (c) availability of relief
in damages. The foregoing provisions shall not limit any other remedies which
the aggrieved party may have at law or in equity in connection with any breach,
interpretation or nonperformance hereof.
11. ARBITRATION. Subject to Paragraph 10 hereof, any controversy or
-----------
claim arising out of or relating to this Agreement, or the breach thereof, shall
be settled by binding arbitration in the City of Los Angeles, in accordance with
the then current rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrator(s) may entered in any court having
jurisdiction thereof.
12. SEVERABILITY. In the event any provision or provisions of this
------------
Agreement are for any reason adjudged to be indefinite, invalid or otherwise
unenforceable, such provision or provisions shall to such extent be severed and
disregarded, and the remaining provisions hereof shall subsist and be carried
into effect.
13. ATTORNEYS' FEES. In the event any action, suit or proceeding is
---------------
instituted under or in connection with this Agreement by any party hereto
against any party hereto, the unsuccessful party therein agrees to pay the other
party therein such attorneys' fees as the Court or board of arbitration assuming
jurisdiction may adjudge reasonable in such action, suit or proceeding.
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<PAGE>
14. PARAGRAPH HEADINGS. The headings of the paragraphs of this
------------------
Agreement are inserted solely for convenience and are not a part of and are not
intended to govern, limit or aid in the construction of any term or provision
hereof.
15. NOTICES.
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15.1 All notices hereunder to the Purchaser shall be sent to the
Purchaser at his or her address hereinabove set forth or at such other address
as the Purchaser may designate by written notice sent to the Company at its
office in Torrance, California, with a copy sent to Lawrence E. May, PLC, 1999
Avenue of the Stars, Suite 1250, Los Angeles, California 90067, Attention:
Lawrence E. May, Esq.
15.2 All notices to the Company hereunder shall be sent to its
offices in Torrance, California at the address hereinabove set forth, with a
copy sent to Lawrence E. May, PLC, 1999 Avenue of the Stars, Suite 1250, Los
Angeles, California 90067, Attention: Lawrence E. May, Esq.
15.3 All notices shall be in writing and shall be deemed to have
been given on the date of service if served personally on the party to whom
addressed; or if mailed within the United States within seventy-two (72) hours
after mailing, if sent by first-class mail, registered or certified, return
receipt requested, postage prepaid.
15.4 Any address set forth in this Agreement may be changed by any
party giving notice of such change to the other parties hereto in the manner
provided above.
16. ENTIRE AGREEMENT. Except for the Option Agreement, this Agreement
----------------
is the entire agreement between the parties with respect to the subject matter
hereof, and supersedes all prior agreements, arrangements and understandings
related to the subject matter hereof. This Agreement may be amended,
supplemented or discharged, and any provision hereof may be modified or waived
only by a written agreement executed by all of the parties hereto.
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<PAGE>
17. REPRESENTATION OF COUNSEL. The Purchaser acknowledges that Lawrence
-------------------------
E. May, PLC, is counsel for the Company and does not represent the individual
interest of the Purchaser in this matter. The Purchaser acknowledges that he or
she has been advised, and has been given the opportunity, to seek independent
counsel to advise him or her on' both the form and substance of this Agreement.
18. EFFECTIVE DATE. This Agreement shall be effective as of the date it
--------------
becomes fully executed by the parties hereto.
IN WITNESS WHEREOF, the parties hereinbefore duly authorized have
executed this Agreement the day and year set forth opposite their respective
signatures.
__________________________________ ________________________
Purchaser Date
DESKTALK SYSTEMS, INC.
By________________________________ _______________________
David J. Kaufman, President Date
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<PAGE>
This is Page 9 of a Restrictive Stock Purchase Agreement by and between
DeskTalk Systems, Inc., and the spouse of the undersigned.
I acknowledge that I have read and know and understand the contents of
the Restrictive Stock Purchase Agreement between my spouse and DeskTalk Systems,
Inc. (the "Company") , and hereby agree to be bound by its terms and provisions.
I am aware that by the provisions of the Agreement my spouse agrees to sell to
the Company shares of common stock upon the terms and conditions contained
therein, including my community, quasi-community, or similar interest in such
shares, and I agree that I will not bequeath such shares or any of them or any
interest therein by my Will if I should predecease my spouse. I direct that the
residuary clause in my Will shall not be deemed to apply to my community,
quasicommunity, or similar interest, if any, in such shares. I consent to have
the terms and conditions of the Agreement specifically enforced against my
estate if the executor of my estate shall fail to abide by such provisions and
my desires herein expressed.
Date:_____________________________
___________________________________
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