<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------------
Date of Report (Date of earliest event reported): NOVEMBER 26, 1996
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ASTEA INTERNATIONAL INC.
(Exact name of Registrant as specified in charter)
DELAWARE 0-26330 23-2119058
- ---------------------------- ----------------------- ------------------
(State or other jurisdiction) (Commission file number) (IRS employer
of incorporation) identification no.)
455 BUSINESS CENTER DRIVE, HORSHAM, PA 19044
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(Address of principal executive offices) (Zip Code)
(215) 682-2500
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(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
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Astea International Inc. ("Astea") has agreed with Per Edstrom, Orjan
Grinndal, and Henrik Lindberg (the "Sellers") to amend certain terms of the
Share Purchase Agreement, the Registration Rights Agreement, and the Escrow
Agreement among Astea and the Sellers, each dated June 20, 1996 (collectively,
the "Agreements"). Astea and the Sellers had executed the Agreements in
connection with Astea's purchase of all of the outstanding shares of Abalon AB,
a Swedish company, from the Sellers on June 20, 1996 (the "Purchase"). Astea
reported the Purchase and the pro forma financial statements relating to the
Purchase by means of a Current Report on Form 8-K dated July 12, 1996 and an
amended Current Report on Form 8-K/A dated September 11, 1996.
The agreement effecting the foregoing amendments, dated November 26, 1996
(the "Amendment Agreement"), accelerates Astea's obligation to register for
resale the shares of Astea's common stock issued to the Sellers in connection
with the Purchase (the "Sellers' Shares"), waives certain contractual
restrictions against transfer of the Sellers' Shares, imposes certain other
contractual restrictions regarding the disposition of the Sellers' Shares and
provides for certain additional consideration to the Sellers and Astea in
connection with the Amendment Agreement. The foregoing description of the
Amendment Agreement is qualified in its entirety by reference to the full text
of the Amendment Agreement, which is attached as an exhibit to this Current
Report on Form 8-K and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
------------------------------------------------------------------
(c) Exhibit
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7.01 Amendment Agreement, dated November 26, 1996, among Astea
International Inc., Per Edstrom, Orjan Grinndal, and
Henrik Lindberg.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized
ASTEA INTERNATIONAL INC.
Dated: November 26, 1996 By:/s/ Caesar J. Belbel
--------------------
Vice President, General Counsel
and Secretary
<PAGE>
EXHIBIT 7.01
AMENDMENT AGREEMENT
WHEREAS, Astea International Inc., a Delaware corporation (the "Company"),
has purchased all of the outstanding capital stock of Bebalon AB, a company
organized under the laws of Sweden pursuant to registration number 556502-4972
and the parent corporation of Abalon AB, a company organized under the laws of
Sweden pursuant to registration number 556329-9741, and certain other companies
affiliated with Bebalon AB (collectively, "Abalon"), pursuant to a Share
Purchase Agreement dated June 20, 1996 (the "SPA") among the Company, Per
Edstrom, Orjan Grinndal and Henrik Lindberg, the sole shareholders of Abalon
(collectively, the "Shareholders");
WHEREAS, as partial consideration for the Company's purchase of Abalon, the
Company issued an aggregate of 233,236 shares of common stock, $.01 par value
per share, of the Company (the "Shares") to the Shareholders, which Shares had
an aggregate market value of approximately $6 million;
WHEREAS, in connection with and as a condition to the consummation of the
SPA, the Company and the Shareholders entered into a Registration Rights
Agreement of the same date (the "Rights Agreement") relating to the resale of
the Shares by the Shareholders and the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, pursuant to the Rights Agreement, the Shareholders, among other
restrictions placed upon the Shares, agreed that the Company would not be
required to register any of the Shares under the Securities Act prior to January
1, 1997, and the Shareholders further agreed not to sell or otherwise transfer
any of the Shares prior to January 1, 1997;
WHEREAS, since the consummation of the SPA, the market value of the Shares
has decreased significantly, and, pursuant to the restrictions set forth in the
Rights Agreement, the Shareholders have not been able to sell any of the Shares;
and
WHEREAS, without constituting a legal admission of any kind, the Company
desires to compensate the Shareholders for part of the decrease in market value
of the Shares, to increase the incentives of the Shareholders to work diligently
for the enrichment of the Company and its shareholders, and to strengthen the
bond of good will between the Shareholders and the Company.
NOW, THEREFORE, BY THIS AMENDMENT, and in consideration of the premises and
in exchange for the promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Shareholders agree as follows. Any capitalized terms used but
not defined in this Amendment shall have the meanings assigned to them in the
Rights Agreement and the SPA.
1. Shelf Registration. (a) Section 3.1 of the Rights Agreement is
------------------
hereby amended by deleting the words "on or after January 1, 1997" in the first
sentence thereof and inserting the word "immediately" in their place.
(b) The Shareholders hereby request that the Company use its reasonable
efforts to promptly effect qualification and registration of the Shares under
the Securities Act on a Form S-3 registration statement. The Company agrees to
file such registration statement with the Securities and Exchange Commission
within five (5) business days of the date hereof and to file a current report on
<PAGE>
Form 8-K describing this Amendment with the Securities and Exchange Commission
within five (5) business days of the date hereof.
(c) Any and all of the Shares held in escrow pursuant to the Escrow
Agreement shall be released from escrow as soon as practicable. The parties to
this Amendment each agree to execute and submit to the Escrow Agent an amendment
to the Escrow Agreement between the Company and the Shareholders dated June 20,
1996, substantially in the form attached hereto as Exhibit A and a Joint Request
---------
for Release of Escrow Shares substantially in the form attached hereto as
Exhibit B.
- ---------
2. Temporary Waiver of Lock-Up; Repurchase Obligation. (a) The Company
--------------------------------------------------
hereby waives its rights under Section 4 of the Rights Agreement to permit each
Shareholder, in his individual discretion, to immediately sell or otherwise
transfer all or part of the Shares held by him, subject to the following
conditions:
(i) All sales or transfers of Shares by a Shareholder, pursuant
to the temporary waiver of lock-up granted hereby, shall be effected (A)
within fifteen (15) business days after the first such sale or transfer by
him and (B) either (I) in open-market sales on the Nasdaq National Market
using a registered broker or dealer pursuant to the registration statement
provided for in Section 1 hereof (the "Resale Registration Statement")
after it has been declared effective by the Securities and Exchange
Commission or (II) pursuant to a valid exemption from the registration
requirements of Section 5 of the Securities Act, including but not limited
to sales made under "Section 4(1 1/2)" of the Securities Act, sales to
qualified institutional buyers under Rule 144A of the Securities Act, and
sales made outside the jurisdictional limits of the United States
securities laws, provided that such extra-jurisdictional offers or sales do
not violate the laws or regulations of any other jurisdiction.
(ii) Any person who purchases Shares from a Shareholder pursuant
to the foregoing Subsection 2(a)(i)(B)(II) shall have the same registration
rights with respect to such Shares as the Shareholders have under the
Rights Agreement, and the Company shall use its best efforts to immediately
amend the Resale Registration Statement to include all such persons as
Selling Shareholders named therein and to amend the Rights Agreement to
include such persons as parties thereto or beneficiaries thereof with the
same rights as the Shareholders; provided, however, that Section 4 of the
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Rights Agreement shall not apply to such persons.
(iii) No later than the thirtieth (30th) business day after the
first sale or transfer of Shares by a Shareholder, the same Shareholder
shall purchase a number of shares of common stock, $.01 par value, of the
Company ("Common Stock") equal to the lesser of (a) the number of Shares
sold by him under Subsection 2(a)(i), or (b) the number of shares that can
be purchased at market prices using the proceeds of the sale described in
Subsection 2(a)(i) after deducting aggregate brokerage expenses for the
transactions set forth in Subsection 2(a)(i) and this Subsection 2(a)(iii).
If such transfer or sale was made by a Shareholder pursuant to Subsection
2(a)(i)(B)(I), then such purchase shall be effected in open-market
purchases on the Nasdaq National Market using a registered broker or
dealer.
(iv) The Shareholders acknowledge that Rule 10b-6 under the
Securities Exchange Act of 1934, as amended, makes it unlawful for any
person who is engaged in a "distribution" of securities to bid for or
purchase, or induce any other person to bid for or purchase, any securities
of the same class as those being distributed until after such person has
completed his participation in such distribution (except purchases pursuant
to certain exemptions specified in such Rule). Accordingly, after a
Shareholder has made an offer, through a broker
2
<PAGE>
or dealer, to sell any of his Shares, he will not purchase or offer to
purchase any shares of Common Stock on the open market until after he has
sold all of the Shares that he intends to sell pursuant to this Subsection
2(a).
(v) The Company and the Shareholders intend that the Shareholders
be subject to the risk that the market value of the Common Stock could rise
or fall during the time between the sale or transfer of Shares and the
corresponding open-market purchase of Common Stock. To ensure that each
Shareholder is subject to this market risk, no Shareholder shall be party
to any agreement, option, understanding or arrangement with another person
who either purchases Shares from such Shareholder or sells shares of Common
Stock to such Shareholder, pursuant to which the price of such Shares or
shares of Common Stock will be guaranteed, fixed or otherwise supported or
the Shareholder or any other person will be compensated or indemnified for
losses resulting from such transactions. No Shareholder shall sell Shares
to another Shareholder or purchase Shares from another Shareholder.
(b) This waiver of the Company's rights under Section 4 of the Rights
Agreement with respect to each Shareholder shall become effective on the date of
this Amendment and shall expire on the earlier of (i) the thirtieth (30th)
business day after such Shareholder has made his first sale or transfer of
Shares under Subsection 2(a) of this Amendment or (ii) the close of business,
New York time, on January 17, 1997. Thereafter, the provisions of Section 4 of
the Rights Agreement shall no longer be waived and shall have full force and
effect. In any event, after January 17, 1997, the conditions set forth in
Subsection 2(a) of this Amendment shall have no force or effect.
(c) Any shares of Common Stock purchased by a Shareholder pursuant to
Subsection 2(a)(ii) of this Amendment shall be deemed "Registrable Securities"
for purposes of Section 4 of the Rights Agreement, and thus shall be subject to
the same lock-up restrictions that had applied to the Shares prior to the waiver
provided by Subsection 2(a) of this Amendment.
(d) The Shareholders hereby acknowledge that a Shareholder who sells or
transfers Shares prior to January 17, 1997 without complying with Subsection
2(a) of this Amendment shall have breached Section 4 of the Rights Agreement.
3. No Violation of United States Securities Laws or Company Policy. Each
---------------------------------------------------------------
Shareholder severally covenants that he will not sell any Shares or purchase any
shares of Common Stock in a manner that violates the securities laws of the
United States or the policies of the Company. In particular, and without
limiting the generality of the foregoing, the following restrictions shall
apply:
(a) Upon any sale of Shares under a registration statement, the selling
Shareholder shall deliver to the broker or dealer through which he sells his
Shares a copy of the current Prospectus for each ultimate purchaser of the
Shares.
(b) No Shareholder may sell Shares or purchase shares of Common Stock while
in possession of material, non-public information relating to the Company.
(c) Each Shareholder acknowledges receiving, reviewing and understanding a
copy of the Company's Statement of Policy Regarding Insider Trading, and each
Shareholder covenants to comply fully with such policy.
3
<PAGE>
4. Additional Consideration to Shareholders. (a) In addition to the
----------------------------------------
consideration set forth in the SPA and the Rights Agreement, the Company shall
pay an aggregate of Nine Hundred Thousand Dollars ($900,000) to the Shareholders
in accordance with their written instructions as follows:
(i) The Company shall pay each Shareholder, or his designee, One
Hundred Thousand Dollars ($100,000) on each of June 30, 1997, June 30, 1998
and June 30, 1999 (each a "Payment Date").
(ii) Notwithstanding the foregoing, in its sole discretion, the
Company may elect on any Payment Date to issue and deliver to any
Shareholder, in lieu of all or part of the cash payment that is payable on
such date, shares of Common Stock having an aggregate market value equal to
the cash payment, or portion thereof, that the Company has elected not to
deliver. Such shares of Common Stock shall be validly issued, fully paid
and non-assessable. The Company shall use its best efforts to immediately
register such shares for resale under the Securities Act pursuant to a
registration statement on Form S-3. Upon issuance, such shares shall be
deemed "Registrable Securities" under the Rights Agreement.
(b) The Company shall grant to each Shareholder a non-qualified stock
option to purchase 20,000 shares of Common Stock substantially in the form
attached hereto as Exhibit C (the "New Options") at an exercise price equal to
---------
the closing price of the Common Stock on the Nasdaq National Market on the date
of this Amendment. The New Options will become exercisable in four equal
portions over four years, commencing on the first anniversary of the date of
this Amendment. The shares of Common Stock issuable upon exercise of the New
Options shall be deemed "Registrable Securities" under the Rights Agreement, and
the right to demand registration of such shares under Section 3.1 of the Rights
Agreement shall not expire before the second anniversary of the issuance of such
shares.
(c) Astea shall pay the Shareholders' legal expenses incurred solely in
connection with the preparation and execution of this Amendment, up to a maximum
of $10,000.
5. Joint and Several Release of All Claims. (a) Effective upon the
---------------------------------------
execution and delivery of this Amendment by the Company, the Shareholders do
hereby, for themselves and their heirs, executors, representatives, successors
and assigns, jointly and severally remise, release, acquit and forever discharge
the Company and its respective parents, subsidiaries, affiliates, directors,
officers, employees, agents, predecessors, successors and assigns, of and from
any and all manner of action and actions, cause and causes of action, suits,
debts, controversies, damages, judgments, executions, claims and demands
whatsoever, in law or in equity, which against the Company, or any of its
respective affiliates as hereinabove enumerated, the Shareholders jointly and/or
severally ever had, now have or which they, or their respective affiliates as
hereinabove enumerated, can, shall or may have, whether or not now known, for,
upon or by reason of or in any way relating to the SPA (other than Sections 6.1
and 6.2 thereof and Section 11.10 thereof), the Escrow Agreement, the issuance
of the Shares or the Company's purchase of Abalon from the Shareholders.
(b) Effective upon the execution and delivery of this Amendment by each of
the Shareholders, the Company does hereby, for itself, its respective parents,
subsidiaries, affiliates, directors, officers, employees, agents, predecessors,
successors and assigns, release, acquit and forever discharge the Shareholders
and their heirs, executors, representatives, successors and assigns, of and from
any and all manner of action and actions, cause and causes of action, suits,
debts, controversies, damages, judgments, executions, claims and demands
whatsoever, in law or in equity, which against the
4
<PAGE>
Shareholders, or any of their respective affiliates as hereinabove enumerated,
the Company ever had, now has or which it, or its respective affiliates as
hereinabove enumerated, can, shall or may have, whether or not now known, for,
upon or by reason of or in any way relating to the SPA, the Escrow Agreement,
the issuance of the Shares, or the Company's purchase of Abalon from the
Shareholders. The release provided in this Subsection 5(b) shall not apply to
indemnification claims made pursuant to Section 7 hereof.
6. Representations and Warranties. (a) Each Shareholder severally
------------------------------
acknowledges, represents and warrants to the Company as follows:
(i) Each Shareholder understands the risks of, and other
considerations relating to, the purchase of shares of Common Stock. Each
Shareholder has such knowledge and experience in financial and business
matters and in making investment decisions of this type that each
Shareholder is capable of evaluating the merits and risks of an investment
in the Company and of making an informed investment decision.
(ii) Each Shareholder has been granted the opportunity to make a
thorough investigation of the activities of the Company and has been
furnished with all materials relating to the Company and its activities.
Each Shareholder has been afforded the opportunity to obtain any additional
information about the Company.
(iii) The Shareholders hereby severally acknowledge that this
Amendment does not require or compel any Shareholder to take any action
whatsoever, and that this Amendment merely permits the Shareholders, in
their sole and individual discretion, to take certain actions, subject to
certain conditions, that had previously been prohibited by the Rights
Agreement.
(b) The Company acknowledges, represents and warrants to the Shareholders
that the Company has taken all action that may be required by its corporate
charter, by-laws and all other applicable law to authorize execution, delivery
and performance of this Amendment.
7. Indemnification. The Shareholders agree that they and their heirs,
---------------
executors, representatives, successors and assigns shall jointly and severally
indemnify and hold harmless the Company and its respective parents,
subsidiaries, affiliates, directors, officers, employees, agents, predecessors,
successors and assigns, of and from any and all manner of action and actions,
cause and causes of action, suits, debts, controversies, damages, judgments,
executions, claims and demands whatsoever, in law or in equity, relating to the
Shareholders' sale or transfer of Shares or their purchase of shares of Common
Stock pursuant to this Amendment, other than for such liability resulting
directly from actions of Astea. In particular, and without limiting the
generality of the foregoing, the Shareholders shall indemnify and hold harmless
the Company and its affiliates enumerated above for any and all liability of the
Shareholders and their respective successors as enumerated above or the Company
under any jurisdiction's tax or securities laws or regulations, including
without limitation any anti-fraud provision thereof, other than for such
liability resulting directly from actions of Astea.
8. Miscellaneous.
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(a) No Other Amendments; Entire Agreement. Except to the extent
-------------------------------------
expressly amended hereby, the SPA, the Rights Agreement and the Escrow Agreement
shall not be altered by this Amendment. Except as otherwise set forth in the
SPA, the Rights Agreement, the Escrow
5
<PAGE>
Agreement and the attachments thereto, this Amendment constitutes the entire
understanding of the parties with respect to the subject matter of this
Amendment and supersedes all prior agreements and understandings, written or
oral, with respect to the subject matter of this Amendment. To the extent
consistent with this Amendment, the SPA, the Rights Agreement and the Escrow
Agreement are reaffirmed hereby and incorporated herein by reference.
(b) Further Assurances. From and after the date hereof, upon the
------------------
reasonable request of any party hereto, the other party shall execute and
deliver such instruments, documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and effectuate fully the intent
and purposes of this Amendment.
(c) Choice of Law. This Amendment will be governed by and
-------------
interpreted in accordance with the internal laws of the State of Delaware
without regard to conflict-of-law principles.
(d) Counterpart Signatures. This Amendment may be executed by
----------------------
facsimile and in any number of counterparts, each of which shall be deemed an
original for all purposes.
IN WITNESS WHEREOF, the parties have executed this Amendment of this 26th
day of November, 1996.
ASTEA INTERNATIONAL INC.
By: /s/ Zack B. Bergreen
-----------------------
Zack B. Bergreen
Chief Executive Officer
/s/ Per Edstrom
-----------------------
Per Edstrom
/s/ Orjan Grinndal
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Orjan Grinndal
/s/ Henrik Lindberg
-----------------------
Henrik Lindberg
6
<PAGE>
EXHIBIT A
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AMENDMENT NO. 1 TO ESCROW AGREEMENT
In consideration of the premises and in exchange for the promises made
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Astea International Inc., a
Delaware corporation (the "Company"), Per Edstrom, Orjan Grinndal and Henrik
Lindberg (collectively, the "Shareholders" and each individually, a
"Shareholder") and Midlantic Bank, N.A. (the "Escrow Agent") hereby amend the
Escrow Agreement dated June 20, 1996 among the Company, the Shareholders and the
Escrow Agent (the "Escrow Agreement"), pursuant to Section 12 of the Escrow
Agreement, as follows. Any capitalized terms used but not defined in this
Agreement shall have the meanings assigned to them in the Escrow Agreement.
1. Section 2(c) of the Escrow Agreement is hereby amended by inserting
the following immediately after the end of Subsection 2(c)(iii) thereof:
"(iv) Immediately upon the receipt by the Escrow Agent of joint
written instructions from Astea and the Representative, the Escrow Agent
will release from the Escrow Account and deliver to each Holder the LESSER
of (A) all of such Holder's Escrow Shares remaining in the Escrow Account
(after subtracting all Escrow Shares previously released from escrow) or
(B) the number of Escrow Shares specified in the joint written
instructions. The release from escrow of all Escrow Shares pursuant to
this Subsection 2(c)(iv) shall not cause the termination of this Agreement
unless the applicable joint written instructions so specify.
2. Section 1.5.2(b) of Exhibit B to the Escrow Agreement is hereby
amended by inserting the following immediately after the end of Subsection
1.5.2(b)(iii) thereof:
"(iv) Immediately upon the receipt by the Escrow Agent of joint
written instructions from Astea and the Representative, the Escrow Agent
will release from the Escrow Account and deliver to each Holder the LESSER
of (A) all of such Holder's Escrow Shares remaining in the Escrow Account
(after subtracting all Escrow Shares previously released from escrow) or
(B) the number of Escrow Shares specified in the joint written
instructions. The release from escrow of all Escrow Shares pursuant to
this Subsection 1.5.2(b)(iv) shall not cause the termination of the Escrow
Agreement unless the applicable joint written instructions so specify.
3. From and after the date hereof, upon the reasonable request of any
party hereto, the other party shall execute and deliver such instruments,
documents and other writings as may be reasonably necessary or desirable to
confirm and carry out and effectuate fully the intent and purposes of this
Amendment.
4. This Amendment may be executed by facsimile and in any number of
counterparts, each of which shall be deemed an original for all purposes.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Escrow Agreement of this ____ day of November, 1996.
ASTEA INTERNATIONAL INC.
By: ____________________
Name:
Title:
MIDLANTIC BANK, N.A.
By: ____________________
Name:
Title:
_________________________
Per Edstrom
_________________________
Orjan Grinndal
_________________________
Henrik Lindberg
<PAGE>
EXHIBIT B
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JOINT REQUEST FOR RELEASE OF ESCROW SHARES
Midlantic Bank, N.A.
c/o Corporate Trust Department
P.O. Box 600
Edison, NJ 08818
Attn: Mr. John H. Gaffney
Re: Release of Escrow Shares
------------------------
Pursuant to Section 2(c)(iv) of the Escrow Agreement, as amended (the
"Escrow Agreement"), among Astea International Inc., Per Edstrom, Orjan
Grinndal, Henrik Lindberg and Midlantic Bank, N.A. (the "Escrow Agent"), the
undersigned hereby request that the Escrow Agent immediately release from escrow
and deliver to the Holders set forth below the number of Escrow Shares set forth
opposite their respective names.
HOLDER NUMBER OF ESCROW SHARES
<TABLE>
<CAPTION>
<S> <C>
Per Edstrom 28,280
Orjan Grinndal 28,280
Henrik Lindberg 28,280
</TABLE>
Certificates representing such Escrow Shares shall be delivered to the
undersigned at the address of the Representative of the Holders as provided for
in the Escrow Agreement.
Executed as of this ____ day of November, 1996.
ASTEA INTERNATIONAL INC.
By: ____________________
Name:
Title:
_________________________
Per Edstrom
_________________________
Orjan Grinndal
_________________________
Henrik Lindberg
<PAGE>
EXHIBIT C
---------
ASTEA INTERNATIONAL INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------
ASTEA INTERNATIONAL INC., a Delaware corporation (the "Company"), hereby
grants this ____ day of _______, 1996, to _____________________, an option to
purchase a maximum of 20,000 shares (the "Option Shares") of its Common Stock,
$.01 par value (the "Common Stock"), at the price of _____ per share, subject to
the following terms and conditions:
1. GRANT AS NON-QUALIFIED OPTION; OTHER OPTIONS. This Option is intended
--------------------------------------------
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.
2. EXTENT OF OPTION. On the following dates, the Optionee may exercise
----------------
this Option for the number of Option Shares set opposite the applicable date:
Less than one year - 0% of the total Option
from DATE Shares
One year but less than - an additional 25% of the
two years from DATE total Option Shares
Two years but less than - an additional 25% of the
three years from DATE total Option Shares
Three years but less than - an additional 25% of the
four years from DATE total Option Shares
Four years from DATE - an additional 25% of the
total Option Shares
The foregoing rights are cumulative and may be exercised up to and including the
date that is ten years from the date this Option is granted.
3. DEATH; DISABILITY. If the Optionee is a natural person who dies before
-----------------
the date that is ten years from the date this Option is granted, 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 to whom this Option has been
assigned pursuant to
<PAGE>
Section 8, at any time before the date that is ten years from the date this
Option is granted.
4. PARTIAL EXERCISE. Exercise of this Option up to the extent above 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 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.
5. PAYMENT OF PRICE. The Option price is payable in United States 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.
6. AGREEMENT TO PURCHASE FOR INVESTMENT. By acceptance of this Option, 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
<PAGE>
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.
7. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of 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 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 3 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.
8. OPTION NOT TRANSFERABLE. This Option is not transferable or assignable
-----------------------
except by will or by the laws of descent and distribution. During the
Optionee's lifetime only the Optionee can exercise this Option.
9. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of this
--------------------------------
Option imposes no obligation on the Optionee to exercise it.
10. NO OBLIGATION TO CONTINUE BUSINESS RELATIONSHIP. The Company and any
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affiliated corporations are not by this Option obligated in any manner to
continue to maintain a Business Relationship with the Optionee.
11. 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. 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.
12. CAPITAL CHANGES AND BUSINESS SUCCESSIONS. It is the purpose of this
----------------------------------------
Option to encourage the Optionee to work for the best interests of the Company
and its
<PAGE>
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. 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 2 and 3 hereof,
maintaining or being involved in a Business Relationship with the Company
includes maintaining or being involved in a Business Relationship with an
affiliated corporation.
13. WITHHOLDING TAXES. The Optionee hereby agrees that the Company may
-----------------
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.
14. GOVERNING LAW. This Agreement shall be governed by and interpreted in
-------------
accordance with the internal laws of the State of Delaware.
IN WITNESS WHEREOF, the Company and the Optionee have caused this instrument
to be executed, and the Optionee whose signature appears below acknowledges
acceptance of an original copy of this Agreement.
____________________________ ASTEA INTERNATIONAL INC.
SIGNATURE OF OPTIONEE
____________________________ By:______________________________
NAME
Its:_____________________________
____________________________
Street Address
____________________________
City State Zip Code
