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EXHIBIT 10.11
XETA TECHNOLOGIES
2000 STOCK OPTION PLAN
1. PURPOSE. The purpose of the XETA Technologies 2000 Stock Option Plan
(the "Plan"), is to promote the interests of XETA Corporation, doing business as
XETA Technologies (the "Company") by aiding the Company in attracting and
retaining competent key employees and directors by means of providing such
persons with an opportunity to acquire or increase their proprietary interest in
the Company, and by affording an incentive to selected key employees and
directors to use their best efforts to assist the Company in achieving long-term
corporate objectives. It is intended that certain options granted hereunder will
qualify as incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended and that other options granted
hereunder will not be incentive stock options but instead will be nonqualified
stock options.
2. DEFINITIONS. Whenever used herein, the following terms shall have
the meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means a committee designated by the Board, which
shall consist of two or more "non-employee directors" as defined in
Rule 16b-3 under the Securities Exchange Act of 1934 as amended (the
"1934 Act") or any successor Rule. The Compensation Committee of the
Board may serve as the Committee, provided that it meets these
requirements. In the event the Committee shall no longer meet the
qualification requirements set forth above, the Board of Directors of
the Company shall appoint a new committee to administer the Plan, whose
members shall cause the committee to qualify under the transaction
approval requirements of Rule 16b-3. The Committee shall have the
authority to appoint a subcommittee whose members qualify as "outside"
directors under Section 162(m) of the Code and the regulations
thereunder, to administer awards under the Plan to the extent required
to meet the requirements of Section 162(m) of the Code and the
regulations thereunder.
(d) "Company" means XETA Corporation, d/b/a XETA Technologies.
(e) "Disability" means a "permanent and total disability" which
enables the Participant to be eligible for and receive a disability
benefit under the Federal Social Security Act.
(f) "Fair Market Value" means the closing price of the Stock as
reported on the NASDAQ stock market for the applicable date, or if
there were no sales on such date, on the last day preceding the
applicable date on which there were sales.
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(g) "Incentive Stock Option" means an Option granted under the Plan
which constitutes and shall be treated as an "incentive stock option"
as defined in Section 422 of the Code.
(h) "Option" means a right or rights to purchase shares of Stock
described in Section 6.
(i) "Option Agreement" means the agreement between the Company and a
Participant evidencing the grant of an Option and containing the terms
and conditions, not inconsistent with the Plan, that are applicable to
such Option.
(j) "Participant" means an individual to whom an Option is granted.
(k) "Plan" means the XETA Technologies 2000 Stock Option Plan, as
amended from time to time.
(l) "Retirement" means the voluntary termination of a Participant's
employment with the Company or a Subsidiary after twenty (20) years of
continuous service or after age 59 1/2.
(m) "Stock" means the Common Stock of the Company.
(n) "Subsidiary" means a subsidiary of the Company or an
unincorporated organization controlled, directly or indirectly, by the
Company.
3. ADMINISTRATION. The Plan shall be administered by the Committee,
which shall act by vote or written consent of a majority of its members. The
Committee shall have full power and authority to construe, interpret, and
administer the Plan and may from time to time prescribe, amend and rescind rules
and regulations for carrying out this Plan as it may deem proper and in the best
interests of the Company. Subject to the terms, provisions, and conditions of
the Plan, the Committee shall have exclusive jurisdiction to (i) select the
individuals to whom Options will be granted, (ii) determine the number of shares
subject to each Option and the time or times when Options will be granted, (iii)
determine the price of the shares subject to each Option, (iv) to determine the
time when each Option may be exercised, (v) fix such other provisions of the
Option Agreement as the Committee may deem necessary or desirable consistent
with the terms of the Plan, and (vi) determine all other questions relating to
the administration of the Plan. The interpretation of any provisions of the Plan
by the Committee shall be final, conclusive, and binding upon all persons.
Subject to compliance with applicable legal requirements, the full Board may
exercise any of the authority conferred upon the Committee hereunder. In the
event of any such exercise of authority by the Board, references in the Plan to
the Committee shall be deemed to refer to the Board.
4. SHARES SUBJECT TO THE PLAN.
(a) The total number of shares of Stock authorized to be issued
under the Plan shall be 300,000, subject to adjustment in accordance
with the provisions of Section 8.
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(b) The shares to be delivered upon exercise of an Option shall be
made available, at the discretion of the Board, from the authorized,
unissued shares of the Company's Stock or from shares of Stock
reacquired by the Company, including shares purchased in the open
market.
(c) In the event that any Option granted under the Plan expires,
terminates, ceases to be exercisable or is surrendered without having
been exercised in full, the shares subject to, but not delivered under,
such Option shall again become available for issuance under the Plan
unless the Plan has been terminated. If any Option is exercised by
tendering shares of Stock, either actually or by attestation, to the
Company as full or partial payment in connection with the exercise of
an Option under this Plan, the shares of Stock so tendered may be used
by the Company to satisfy any other Option under the Plan, provided
that in no event may the number of shares of Stock issued under the
Plan, net of the shares so tendered, exceed the total number of shares
authorized to be issued under the Plan.
(d) Shares of Stock issued under the Plan through the settlement,
assumption or substitution of outstanding awards or through obligations
to grant future awards as a condition of the Company acquiring another
entity shall not reduce the maximum number of shares available for
delivery under the Plan.
(e) More than one Option may be granted to a Participant pursuant to
the Plan.
5. ELIGIBILITY. Key employees of the Company and any of its
Subsidiaries, including officers and directors who are salaried employees, and
outside directors of the Company and any of its Subsidiaries, shall be eligible
to receive Options. Key employees and directors to whom Options may be granted
will be those selected by the Committee from time to time who, in the sole
discretion of the Committee, have contributed in the past or who may be expected
to contribute materially in the future to the successful performance of the
Company or its Subsidiaries.
6. OPTION TERMS AND CONDITIONS. Each Option granted under the Plan
shall be evidenced by an Option Agreement which shall contain such terms and
conditions (which need not be uniform for all Participants) consistent with the
Plan as the Committee shall determine; provided, however, that each Option shall
satisfy the following requirements:
(a) Exercise Price. The price at which shares of Stock may be
purchased under an Option (the "Exercise Price") shall be specified in
the Option Agreement and shall not be less than Fair Market Value of
such shares on the date the Option is granted, subject, however, to the
provisions of Section 8 hereof and further provided that in no event
shall the Exercise Price be less than the par value of the Stock.
(b) Exercise of Options.
(i) The period during which an Option may be exercised shall
not exceed ten (10) years from the date the Option is granted;
provided, however,
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that the Option may be sooner terminated in accordance with the
provisions of Subsection (d) below.
(ii) An Option may be exercised only after one year of
continued employment by or service as an outside director with the
Company or one of its Subsidiaries immediately following the date
the Option is granted and, except as provided in Subsection (d)
below, only during the continuance of the Participant's employment
with the Company or one of its Subsidiaries. Subject to the
foregoing limitations and the terms and conditions of the Option
Agreement, each Option shall be exercisable in whole or in part in
installments, at such time or times as the Committee may prescribe
in the Option Agreement.
(c) Payment. Full payment of the Exercise Price shall be made at the
time of exercising the Option in whole or in part. The Exercise Price
shall be payable (i) in cash or by an equivalent means acceptable to
the Committee, (ii) by delivery (actually or by attestation) to the
Company of shares of Stock owned by the Participant having a Fair
Market Value on the date of exercise of the Option equal to the
Exercise Price for the shares being purchased; except that any portion
of the Exercise Price representing a fraction of a share shall in any
event be paid in cash and no shares of the Stock which have been held
by the Participant for less than six (6) months may be delivered in
payment of the Exercise Price, or (iii) in the discretion of the
Committee, by any combination of the above. The Committee may grant an
Option that provides for the grant of a replacement Option if all or
any portion of the Exercise Price of the original Option is paid by
delivery of shares of Stock. The replacement Option shall (i) cover the
number of shares of Stock surrendered to pay the Exercise Price of the
original Option; (ii) have an Exercise Price equal to 100% of the Fair
Market Value of such Stock on the date the replacement Option is
granted; (iii) become exercisable no sooner than six (6) months after
the date of grant of the replacement Option; and (iv) have an
expiration date identical to the expiration date of the original
Option. No certificates for shares purchased upon exercise of an Option
shall be issued until full payment therefore has been made, and a
Participant shall have none of the rights of a shareholder until such
certificates are issued to him or her.
(d) Termination of Employment.
(i) Death. If a Participant's employment is terminated by
death, the Option may be exercised by the Participant's estate or by
the person or persons to whom the Participant's rights pass by will
or by the laws of descent and distribution, subject to the same
conditions upon exercise to which the Participant was subject prior
to death. All Options which were not exercisable as of the date of
death shall expire as of such date.
(ii) Disability. If a Participant's employment with the Company
or a Subsidiary is terminated by Disability, any Options held by the
Participant may be exercised in accordance with and subject to the
same conditions upon
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exercise to which the Participant was subject prior to such
Disability; provided, however, that the Option must be exercised
prior to the expiration date of the Option or within one year after
the date of Disability, whichever is earlier. All Options which were
not exercisable as of the date of Disability shall expire as of such
date.
(iii) Retirement. If a Participant's employment with the
Company or a Subsidiary is terminated by reason of Retirement, any
Options held by the Participant may be exercised in accordance with
and subject to the same conditions upon exercise to which the
Options were subject prior to the Participant's Retirement;
provided, however, that the Options must be exercised prior to the
expiration date of the Options or within three (3) months after the
date of Participant's Retirement, whichever is earlier. All Options
which were not exercisable as of the date of Retirement shall expire
as of such date.
(iv) Other Termination. If a Participant's employment with the
Company or a Subsidiary is terminated for any reason other than for
death or Disability and other than "for cause" as defined in
subparagraph (v) below, any Options held by the Participant may be
exercised in accordance with and subject to the same conditions upon
exercise to which the Options were subject prior to the
Participant's termination of employment; provided, however, that the
Options must be exercised prior to the expiration date of the
Options or within three (3) months after the date of such
termination of employment, whichever is earlier. All Options which
were not exercisable as of the date of such termination shall expire
as of such date. In the case of a director who is not an employee of
the Company or a Subsidiary, termination of employment shall mean
the voluntary or involuntary cessation of Board service for any
reason.
(v) Termination For Cause. Notwithstanding any other provision
in the Plan to the contrary, if the Participant's employment with
the Company or a Subsidiary is terminated "for cause" (as defined
below), any unexercised Options held by the Participant shall
immediately be forfeited. Termination "for cause" shall mean
termination by the Company because of: (x) the Participant's willful
and continued failure to substantially perform his duties (other
than any such failure resulting from the Participant's incapacity
due to physical or mental impairment); (y) the willful conduct of
the Participant which is demonstrably and materially injurious to
the Company or a Subsidiary, monetarily or otherwise, or (z) the
conviction of the Participant for a felony by a court of competent
jurisdiction.
(e) Special Incentive Stock Option Conditions. Notwithstanding
anything in the Plan to the contrary, the following special conditions
shall apply to Incentive Stock Options granted under the Plan:
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(i) if an Incentive Stock Option is granted to a Participant
who, at the time such Option is granted, owns stock that has more
than 10 percent of the voting power of all classes of stock of the
Company or of any Subsidiary, then (x) the Exercise Price of the
Incentive Stock Option granted shall be not less than 110% of the
Fair Market Value on the date of grant; and (y) the Incentive Stock
Option shall not be exercisable after the expiration of five (5)
years from the date such Option is granted; and
(ii) Incentive Stock Options shall not be granted to any
Participant, the effect of which would be to permit such Participant
to first exercise options, in any calendar year, for the purchase of
shares having a Fair Market Value, determined at the time the Option
is granted, in excess of $100,000. Any Option purporting to
constitute an Incentive Stock Option in excess of such limitation
shall, to the extent of such excess, constitute a nonqualified stock
option.
(f) Other Terms and Conditions. Any Option granted hereunder shall
contain such other and additional terms, not inconsistent with the
terms of the Plan, which are deemed necessary or desirable by the
Committee. Options may be granted that are subject to different terms,
conditions and restrictions than other Options granted. Except as
otherwise expressly provided in the Plan, the Committee may designate
an Option, at the time of its grant, as an Incentive Stock Option or as
a nonqualified stock option; provided, however, that an Option may be
designated as an Incentive Stock Option only if the applicable
Participant is an employee of the Company or a Subsidiary on the date
of grant.
7. TRANSFERABILITY OF OPTIONS. An Option shall not be transferable
except by will or the laws of descent and distribution upon the death of the
Participant. Options shall be exercisable during the Participant's lifetime only
by the Participant, or, in the event of the Participant's Disability, by his
legal representative. Notwithstanding the foregoing, the Committee may, in its
sole discretion, permit a Participant to transfer a non-qualified Option, to a
"family member" as defined in the General Instructions to Form S-8 adopted by
the Securities Exchange Commission under the Securities Act of 1933, as amended,
provided that such transfer is not made for value as set forth in the General
Instructions to Form S-8. Any such Option so transferred to the aforementioned
persons shall be subject to the provisions of Section 6 concerning the
exercisability during the Participant's employment or service as an outside
director of the Company or any of its Subsidiaries.
8. CHANGES IN CAPITAL ADJUSTMENTS AFFECTING STOCK. In the event that
there is any change in the capital structure of the Company through merger,
consolidation, reorganization, recapitalization, spin-off or otherwise, or if
there shall be any dividend on the Company's Stock, payable in such Stock, of if
there shall be a Stock split or a combination of shares, then the number of
shares reserved for Options (both in the aggregate and with respect to each
Participant), and the number of shares subject to outstanding Options and the
price per share of each such Option, shall be proportionately adjusted by the
Committee as it deems
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equitable, in its absolute discretion, to prevent dilution or enlargement of the
rights of a Participant. The issuance of Stock for consideration and the
issuance of Stock rights shall not be considered a change in the Company's
capital structure. No adjustment provided for in this Section 8 shall require
the issuance of any fractional share. To the extent deemed advisable by the
Committee, the adjustments made to the Options will not (i) result in a
modification to the incentive stock options as defined in Section 424 or other
subsequent relevant Internal Revenue Code Sections and Treasury Regulations; or
(ii) result in an earnings charge to the Company under generally accepted
accounting principles.
9. CHANGE IN CONTROL. Unless the Committee shall otherwise expressly
provide in the Option Agreement, upon the occurrence of a Change in Control of
the Company (as defined herein), all Options then outstanding under the Plan
shall become immediately fully exercisable by the Participant. A "Change in
Control" shall be deemed to have occurred if:
(a) Any person becomes the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of securities of the
Company representing 25 percent or more of the combined voting power of
the Company's then outstanding common stock, unless through a
transaction arranged by, or consummated with the prior approval of the
Board;
(b) During any period of two consecutive years, there shall cease to
be a majority of the Board comprised as follows: individuals who at the
beginning of such period constituted the Board and any new director(s)
whose election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved;
(c) The shareholders of the Company approve a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) less than fifty percent of the
combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation;
(d) The shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of its assets; or
(e) Two-thirds (2/3rd) of the Board deems any other event to
constitute a change in control of the Company for purposes of this
provision, or if, notwithstanding the occurrence of an event as
described in subsections (a) through (d) of this Section 9, two-thirds
(2/3rd) of the Board deems such event not to constitute a change in
control for purposes of this provision.
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10. AMENDMENT OR TERMINATION. The Board of Directors of the Company
shall have the right, at any time, to amend or terminate the Plan in any respect
which it may deem to be in the best interests of the Company; provided, however,
no amendment to the Plan shall be made without the approval of the Company's
shareholders if such amendment would: (i) materially increase the benefits
accruing to Participants under the Plan; (ii) materially increase the number of
securities that may be issued under the Plan; (iii) materially modify the
requirements as to eligibility for participation in the Plan; or (iv) otherwise
require shareholder approval under the Oklahoma General Corporation Act, Rule
16b-3 of the Securities Exchange Act of 1934, as amended from time to time, or
Section 162(m) of the Code.
11. EFFECTIVE DATE AND APPROVAL. The Plan shall take effect upon its
adoption by the Company's Board of Directors. The Plan shall be submitted to the
Company's shareholders for approval at the annual meeting in 2000 or at any
special meeting held within twelve (12) months after the Plan is adopted by the
Board. Options may be granted under the Plan prior to, but conditional upon,
shareholder approval.
12. DURATION OF PLAN. The Plan shall remain in effect for a period of
ten (10) years from the date of its adoption by the Board, unless sooner
terminated in accordance with Section 10.
13. MISCELLANEOUS.
(a) The Plan and all Options granted pursuant to it are subject to
all applicable laws, rules and regulations, including without
limitation Federal Securities laws and tax laws. Notwithstanding any
provisions of the Plan or any Option Agreement, the Participant shall
not be entitled to exercise an Option nor shall the Company be
obligated to issue any shares to a Participant if such exercise or
issuance would constitute a violation of any provision of any such
laws, rules or regulation.
(b) The Committee may require each Participant acquiring Stock
pursuant to the exercise of an Option to represent to and agree with
the Company in writing that such Participant is acquiring the shares
without a view to distribution thereof. No shares of Stock shall be
issued pursuant to an Option until all applicable securities laws and
other legal or regulatory requirements have been satisfied. The
Committee may require the placing of stop-orders and restrictive
legends on certificates for Stock, as it deems appropriate.
(c) The proceeds received by the Company from the sale of Shares
pursuant to Options may be used for general corporate purposes.
(d) The Company may, as a condition to issuing Stock upon exercise
of an Option, require the payment (through withholding from the
Participant's salary or payment of cash by the Participant) of any
federal, state or local taxes required by law to be withheld with
respect to such.
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(e) The adoption of the Plan does not preclude the adoption by
appropriate means of any other incentive plan for employees and nothing
herein shall be construed to limit the Company's right to grant options
outside of the Plan for any proper and lawful purpose.
(f) The fact that an employee has been granted an Option under the
Plan shall not in any way affect or qualify the right of the employer
to terminate the employee's employment at any time.
(g) Members of the Committee shall be entitled to indemnification as
directors of the Company, and to any limitation of liability and
reimbursement as directors with respect to their services as members of
the Committee.
(h) The Participant is required to notify the Company of a
disqualifying disposition of Company stock acquired through the
exercise of incentive stock options as defined in Section 422 or other
subsequent relevant Internal Revenue Code Sections and Treasury
Regulations.
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