Exhibit 10.11
FTP SOFTWARE, INC.
STOCK OPTION PLAN
1. Purpose of the Plan. Under the Stock Option Plan (the "Plan") of FTP
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Software, Inc. (the "Company") options may be granted to eligible employees to
purchase shares of the Company's capital stock. The Plan is designed to enable
the Company and its subsidiaries to attract, retain and motivate their employees
by providing for or increasing the proprietary interests of such employees in
the Company. The Plan provides for options which qualify as incentive stock
options ("Incentive Options") under Section 422A of the Internal Revenue Code of
1986, as amended (the "Code"), as well as options which do not so qualify.
2. Stock Subject to Plan. The maximum number of shares of stock for which
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options granted hereunder may be exercised shall be 3,300,000 shares of common
stock $.01 par value, subject to the adjustments provided in Sections 7 and 12.
Shares of stock subject to the unexercised portions of any options granted under
this Plan which expire or terminate or are cancelled may again be subject to
options under the Plan. However, if stock appreciation rights are granted with
respect to any options under this Plan, the total number of shares of stock for
which further options may be granted under this Plan shall be irrevocably
reduced not only when there is an exercise of an option granted under this Plan,
but also when such option is surrendered upon an exercise of a stock
appreciation right granted under this Plan, in either case by the number of
shares covered by the portion of such option which is exercised or surrendered.
3. Eligible Employees. The employees eligible to be considered for the
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grant of options hereunder are any persons regularly employed by the Company or
its parent(s) or subsidiaries in a managerial, professional, or technical
capacity on a full-time, basis. Notwithstanding the above, an employee is not
eligible if he owns stock possessing more than 10% of the total combined voting
power of all stock of the company or its parents or subsidiaries unless the
option price is at least 110% of the fair market value of the stock subject to
the option and such option by its terms is not exercisable after the expiration
of five years from the date such option is granted. For purposes of this
paragraph, an employee is deemed to own stock if it is owned by himself, his
brothers, sisters, half-brothers, half-sisters, spouse, ancestors and lineal
descendants. Stock owned directly or indirectly by or for a corporation,
partnership or trust is treated as owned proportionately by or for its
shareholders, partners or beneficiaries.
4. $100,000 Incentive Stock Option Exercise Limitation. The aggregate
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fair market value of the stock for which Incentive Options granted to any one
eligible employee under this Plan and under all stock option plans of the
Company, its parent(s) and subsidiaries, may by their terms first become
exercisable during any calendar year shall not exceed $100,000, determining fair
market value of the stock subject to any option as of the time that option is
granted.
5. Minimum Exercise Price. The exercise price for each option granted
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hereunder shall not be less than 100% of the fair market value of the stock at
the date of the grant of the option.
6. Nontransferability. Any option granted under this Plan shall by its
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terms be nontransferable by the optionee other than by will or the laws of
descent and distribution and is exercisable during the optionee's lifetime only
by him or by his guardian or legal representative.
7. Adjustments. If the outstanding shares of stock of the class then
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subject to this Plan are increased or decreased, or are changed into or
exchanged for a different number or kind of shares or securities, as a result of
one or more reorganizations, recapitalizations, stock splits, reverse stock
splits, stock dividends or the like, appropriate adjustments shall be made in
the number and/or kind of shares or securities for which options may thereafter
be granted under this Plan and for which options then outstanding under this
Plan may thereafter be exercised. Any such adjustments in outstanding options
shall be made without changing the aggregate exercise price applicable to the
unexercised portions of such options.
8. Maximum Option Term. No option granted under this Plan may be
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exercised in whole or in part more than ten years after its date of grant.
9. Plan Duration. Options may not be granted under this Plan more than
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ten years after the date of the adoption of this Plan, or of shareholder
approval thereof, whichever is earlier.
10. Payment. Payment for stock purchased under any exercise of an option
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granted under this Plan shall be made in full in cash concurrently with such
exercise, except that, if and to the extent that the Board or the Committee so
provides, such payment may be made in whole or in part (a) with shares of the
same class of stock which have been held for at least six months (unless the
Board or the Committee approves a shorter period) and which shares have a fair
market value on the last business day preceding the date of exercise equal to
the exercise price or (b) at such time as the stock is registered under Section
12 of the Securities Exchange Act of 1934 (the "Exchange Act"), by delivery of
an unconditional and irrevocable undertaking by a broker to deliver to the
Company sufficient funds to pay the exercise price.
11. Administration. The Plan shall be administered by the Company's board
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of directors (the "Board") or, in the discretion of the Board, by a committee
(the "Committee") of not less than three members of the Board from and after the
time that the common stock is registered under Section 12 of the Exchange Act,
the Plan shall be administered by a committee of at least three directors, all
of whom are disinterested within the meaning of Rule 16b-3 under the Exchange
Act.
The interpretation and construction by the Committee of any term or
provision of the Plan or of any option granted under it shall be final, unless
otherwise determined by the Board in which event such determination by the Board
shall be final. The Committee may from time to time
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adopt rules and regulations for carrying out this Plan and, subject to the
provisions of this Plan, may prescribe the form or forms of the instruments
evidencing any option granted under this Plan.
Subject to the provisions of this Plan, the Board or, by delegation from
the Board, the Committee shall have full and final authority in its discretion
to select the employees to be granted options, to grant such options and to
determine the number of shares to be subject thereto, the exercise prices, the
terms of exercise, expiration date and other pertinent provisions thereof.
12. Corporate Reorganizations. Upon the dissolution or liquidation of the
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Company, or upon a reorganization, merger or consolidation of the Company as a
result of which the outstanding securities of the class then subject to options
hereunder are changed into or exchanged for cash or property or securities not
of the Company's issue, or upon a sale of substantially all the property of the
Company to, or the acquisition of stock representing more than eighty percent
(80%) of the voting power of the stock of the Company then outstanding by,
another corporation or person, the Plan shall terminate, and all options
theretofore granted hereunder shall terminate, unless provision be made in
writing in connection with such transaction for the continuance of the Plan
and/or for the assumption of options theretofore granted, or the substitution
for such options of options covering the stock of a successor employer
corporation, or a parent or a subsidiary thereof, with appropriate adjustments
as to the number and kind of shares and prices, in which event the Plan and
options theretofore granted shall continue in the manner and under the terms so
provided. If the Plan and unexercised options shall terminate pursuant to the
foregoing sentence, all persons entitled to exercise any unexercised portions of
options then outstanding shall have the right, at such time prior to the
consummation of the transaction causing such termination as the Company shall
designate, to exercise, the unexercised portions of their options, including the
portions thereof which would, but for this paragraph entitled "Corporate
Reorganizations," not yet be exercisable.
13. Stock Appreciation Rights. If the instrument evidencing the option so
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provides, an option granted under this Plan (herein sometimes referred to as the
"corresponding option") may include the right (a "Stock Appreciation Right") to
receive an amount equal to some or all of the excess of the fair market value
(determined in a manner specified in the instrument evidencing the corresponding
option) of the shares subject to unexercised portions of the corresponding
option over the aggregate exercise price for such shares under the corresponding
option as of the date the Stock Appreciation Right is exercised. The amount
payable upon exercise of a Stock Appreciation Right may be paid in cash or in
shares of the class then subject to the corresponding option (valued on the
basis of their fair market value, determined as specified with respect to the
measurement of the amount payable as aforesaid), or in combination of cash such
shares so valued. No Stock Appreciation Right may be exercised in whole or in
part (a) other than in connection with the contemporaneous surrender without the
exercise of such corresponding option, or the portion thereof that corresponds
to the portion of the Stock Appreciation Right being exercised, or (b) except to
the extent that the corresponding option or such portion thereof is exercisable
on the date of exercise of the Stock Appreciation Right by the person exercising
the Stock Appreciation Right, or (c) unless the class of stock then subject to
the
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corresponding option is then "publicly traded." For this purpose, a class of
stock is "publicly traded" if it is listed or admitted to unlisted trading
privileges on a national securities exchange or if bid and offer quotations
therefor are reported on the automated quotation system ("NASDAQ") operated by
the National Association of Securities Dealers, Inc. or on any then operative
successor to the NASDAQ system.
14. Restricted Stock. If the instrument evidencing the option so
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provides, shares of stock issued on exercise of an option granted under this
Plan may upon issuance be subject to the following restrictions (and, as used
herein, "restricted stock" means shares issued on exercise of options granted
under this Plan which are still subject to restrictions imposed under this
Section 14 that have not yet expired or terminated):
a. shares of restricted stock may not be sold or otherwise transferred or
hypothecated;
b. if the employment of the holder of shares of restricted stock with the
Company or a subsidiary is terminated for any reason other than his
death, normal or early retirement in accordance with his employer's
established policies or practices, or total disability, the Company (or
any subsidiary designated by it shall have the option for sixty (60)
days after such termination of employment to purchase for cash all or
any part of his restricted stock at the lesser of (i) the price paid
therefor by the holder, or (ii) the fair market value of the restricted
stock on the date of such termination of employment determined in a
manner specified in the instrument evidencing the option); and
c. as to the shares of stock affected thereby, any additional restrictions
that may be imposed on particular shares of restricted stock as
specified in the instrument evidencing the option.
The restrictions imposed under this Section 14 shall apply as well to all
shares or other securities issued in respect of restricted stock in connection
with any stock split, reverse stock split, stock dividend, recapitalization,
reclassification, spin-off, split-off, merger, consolidation or reorganization,
but such restrictions shall expire or terminate at such time or times as shall
be specified therefor in the instrument evidencing the option which provides for
the restrictions.
15. Financial Assistance. The Company is vested with authority under this
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Plan to assist any employee to whom an option is granted hereunder (including
any director or officer of the Company or any of its subsidiaries who is also an
employee) in the payment of the purchase price payable on exercise of that
option, by lending the amount of such purchase price to such employee on such
terms and at such rates of interest and upon such security (or unsecured) as
shall have been authorized by or under authority of the Board.
16. Amendment and Termination. The Board may alter, amend, suspend or
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terminate this Plan, provided that no such action shall deprive an optionee,
without his consent, of any
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option granted to the optionee pursuant to this Plan or of any of his rights
under such option. No such action will, without the approval of the
stockholders of the Company, effectuate a change for which stockholder approval
is required in order for the Plan to continue to qualify for the award of
Incentive Options under Section 422 of the Code and to continue to qualify under
Rule 16b-3 promulgated under Section 16 of the Exchange Act.
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