Exhibit 10.1
- ------------
July 13, 1999
Personal & Confidential
- -----------------------
Mr. Bruce R. Rusch
97 Brimstone Lane
Sudbury, MA 01776
Dear Bruce:
On behalf of Zack Bergreen and Astea International Inc., I am
delighted to take this opportunity to extend this offer of employment as
President and Chief Executive Officer of Astea International, Inc. ("Astea"),
reporting to Astea's Board of Directors. You will be responsible for developing,
implementing and administering Astea's policies, goals and objectives, subject
to the direction of the Board of Directors. Zack Bergreen will remain as
Chairman of the Board and an employee or consultant of the Company. Your
employment will begin on August 9, 1999, subject to the approval of this offer
letter by the Board of Directors.
You will be based in Astea's Horsham, Pennsylvania headquarters, and
it is expected that you will relocate your principal residence to this area
within one year. Astea will reimburse you for reasonable relocation expenses up
to $25,000, and will reimburse you for reasonable travel and temporary housing
expenses for up to the first six months of your employment until you relocate.
Your annual base salary will be $300,000 payable semi-monthly, less
appropriate federal, state and local taxes. Assuming satisfactory performance,
this base salary will be reviewed annually consistent with Astea's compensation
policy in effect from time to time. Additionally, you will be eligible for a
special executive bonus of $50,000 if the Company reports net income for two
consecutive fiscal quarters ending before July 1, 2000.
You will also be eligible to participate in Astea's corporate
incentive bonus program as and if such program may be in effect from time to
time. However, you understand that any participation in this program is within
the sole discretion of the Board of Directors. The payment to you of any
incentive award on one occasion shall not be deemed to create an obligation for
any subsequent grant or award.
As an additional incentive to you, you will be eligible for a grant of
options to purchase 500,000 shares of Astea's common stock at the fair market
value on the date of grant. This grant will be evidenced by a separate stock
option agreement on the date of Board approval of the options, with vesting tied
to the date your employment commences. Of such options:
Bruce R. Rusch
July 13, 1999
Page 2 of 3
(a) Options to purchase 250,000 shares will vest in equal
installments on each of the first four anniversaries of the grant date.
(b) Options to purchase 125,000 shares will vest on the fifth
anniversary of the date of grant, or such earlier date that Astea reports net
income for two consecutive fiscal years, with operating income as a percentage
of revenue not less than 10% in each such year.
(c) Options to purchase the other 125,000 shares will vest on
the fifth anniversary of the date of grant, subject to earlier vesting as
follows:
(i) Options to purchase 62,500 shares will vest if the
average closing market price per share of Astea's common stock during a fiscal
quarter equals or exceeds $5; and
(ii) All unvested options of these 125,000 will vest if the
average closing market price per share of Astea's common stock during a fiscal
quarter equals or exceeds $8.
Upon termination of your employment with Astea, you may exercise any
vested options for a period of 90 additional days. In the event of a change in
control of Astea, your options that have not vested will vest immediately.
As an employee entrusted with confidential and sensitive information,
Astea requires that, upon your employment, you enter into a written agreement
containing noncompetitive covenants and restrictions on the use and ownership of
such information, as well as other terms and conditions. This agreement is
enclosed for your review.
Current Astea benefits include paid vacation days based upon length of
employment. In the first five years of your employment, you may accrue up to 15
days per year, accrued at a rate of 1.25 days per month. Thereafter, upon the
anniversary date of your employment, you will earn an additional paid vacation
day per year up to a maximum of 20 days per year. You will also be eligible to
receive other company paid benefits including holidays, earned sick days, and
certain personal absences.
Astea provides a progressive range of employee benefits including life
insurance, long-term disability insurance, a 40l(k) plan, profit sharing plan,
employee stock purchase plan, medical and dental plans and short-term disability
plans. You and your eligible dependents will be eligible to participate in these
benefits programs subject to the terms and conditions of the benefits programs.
Please note that the Astea benefits may change from time to time.
Bruce R. Rusch
July 13, 1999
Page 3 of 3
If you wish to accept Astea's offer of employment, please sign and
return this original letter to me, keeping a copy for yourself. Your signature
below indicates your acceptance of the terms of this offer, and represents and
warrants to Astea that there is no other agreement in effect which prohibits or
otherwise restricts your employment by Astea.
This letter does not constitute a contract of employment. It creates
an employment-at-will relationship that may be terminated at any time by either
party. If Astea terminates your employment without cause (to be defined in the
stock option agreement), you will receive, as severance in a lump sum and in
lieu of any other severance, an amount equal to six months of your base salary
then in effect, subject to your execution of a reasonable release of any claims
against Astea.
I am looking forward to working with you and building the company, and
we are confident that you will find the Astea environment to be challenging and
rewarding.
Sincerely,
/s/ Robert G. Schwartz, Jr.
Robert G. Schwartz, Jr.
Vice President, General Counsel and Secretary
Astea International Inc.
/s/ Zack B. Bergreen
Zack B. Bergreen
Chairman and CEO
Astea International Inc.
AGREED:
/s/ Bruce R. Rusch
Bruce R. Rusch