Document:

Exhibit 10.6

 

STOCK
OPTION GRANT

(Qualified Incentive Stock Option)

 

THIS
STOCK OPTION  GRANT is made
as of the 31st day of December, 2008, by XETA TECHNOLOGIES, INC.,
an Oklahoma corporation (the “Company”), to                                 
(the “Grantee”).

 

Recitals

 

A.                                   At
a meeting of the Compensation Committee of the Company’s Board of Directors (“Compensation  Committee”)
held on December 18, 2008, the Compensation Committee authorized the grant
on that date (the “Grant Date”) of
certain qualified incentive stock options under the terms of the XETA
Technologies 2000 Stock Option Plan (the “Plan”), which
governs the grant of such stock options to salaried employees of the Company,
who are expected by the Compensation Committee to contribute, significantly and
materially, to the present and future performance of the Company and are,
therefore, determined by the Compensation Committee to constitute key employees
of the Company (“Key Employees”).

 

B.                                     The
Compensation Committee has determined that the Grantee is such a Key Employee
and has authorized the grant to Grantee of options to acquire                       
shares of the Company’s $0.001 par value common stock on the terms hereinafter
set forth.

 

C.                                     Capitalized
terms used and not otherwise defined herein have the meanings assigned to them
in the Plan.

 

NOW, THEREFORE, it
is hereby agreed as follows:

 

1.                                      Grant
of Option.  As of the Grant Date, the  Company
grants to the Grantee a qualified incentive stock option (the “Option”) to purchase                         
shares of the Company’s shares of $0.001 par value common stock (the “Option Shares”), subject to the terms and conditions set
forth herein.

 

2.                                      Option
Exercise Price.  The price per share payable for the Option
Shares is $           per
share (the “Exercise Price”).

 

3.                                      Option
Term; Date of Exercise.  The Option shall have a term of               
years measured from the Grant Date and shall accordingly expire at the close of
business on                                   
(the “Expiration Date”) unless sooner
terminated in accordance with Section 4 below, other terms of this
Agreement or the Plan.  Subject to the
conditions set forth herein, the Option shall become exercisable on                               
(the “Vesting Date”), and shall remain exercisable
through the Expiration Date.

 

4.                                      Condition.  Except
as otherwise provided in Section 7 of the Plan, this Option shall be
exercisable by the Grantee only on the condition (i) that the Grantee
shall have been 

 

 

continuously employed by
the Company or one of its Subsidiaries as a salaried employee from the Grant Date
through the Vesting Date and, (ii) that as provided in the Plan, the
Grantee shall be so employed on the date of exercise; provided, however, that
as permitted by the Plan:

 

(a)                                  If Grantee’s employment by the Company
and/or its Subsidiaries is terminated by his death, and if the Option was
otherwise exercisable on the date of death, the Option may be thereafter
exercised by his estate or by the person or persons to whom his rights pass by
will or by the laws of descent and distribution; provided, however, that such
exercise must occur not later than the Expiration Date or within one (1) year
after the date of Grantee’s death, whichever first arrives.

 

(b)                                 If Grantee’s employment is terminated by
his Disability, and if this Option was otherwise exercisable on the date of
such termination of employment, the Option may be thereafter exercised by
Grantee or his duly appointed guardian, if any; provided, however, that such
exercise must occur not later than the Expiration Date or within one (1) year
after the date of such Disability, whichever first arrives.

 

(c)                                  If Grantee’s employment is terminated by
reason of his Retirement, and if this Option was otherwise exercisable on the
date of such Retirement, the Option may be thereafter exercised by Grantee;
provided, however, such exercise must occur not later than the Expiration Date
or within three (3) months after the date of Grantee’s Retirement,
whichever first arrives.

 

(d)                                 If Grantee’s employment is terminated for
any reason other than (i) his death, Disability or Retirement or (ii) “for
cause” as defined in the Plan, and if this Option was otherwise exercisable by
Grantee on the date of such termination of employment, the Option may be thereafter
exercised by the Grantee; provided, however, that such exercise must occur not
later than the Expiration Date or within three (3) months after the date
of such termination of employment, whichever first arrives.

 

(e)                                  If Grantee’s employment is terminated “for
cause” (as defined in the Plan), this Option shall be immediately forfeited
unless already duly exercised prior to the date of such “for cause” termination
of employment.

 

5.                                      Manner
of Exercise; Payment.    In order to
exercise the Option, whether in whole or in part, the Grantee must:

 

(a)                                  Deliver
a written notice to the Company addressed to the attention of the Company’s
Chief Financial Officer at its principal offices at 1814 West Tacoma, Broken
Arrow, Oklahoma 74012;

 

(b)                                 State
in the notice (i) the Grantee’s election to exercise the Option, (ii) the
whole number of shares with respect to which the Option is being exercised, (iii) the
date of the proposed exercise, and (iv) that all conditions to exercise
have been satisfied; and

 

(c)                                  Make full payment of the Exercise Price
at the time of exercising the Option.

 

2

 

The Exercise Price shall
be payable upon delivery to the Company of any combination of (i) cash or
other immediately available funds or (ii) shares of the Company’s Stock
already owned by the Grantee and having a Fair Market Value on the date this
Option is exercised equal to the aggregate Exercise Price for the Option Shares
being purchased; provided that any portion of the Exercise Price representing a
fraction of a share of Stock may be paid only in cash and provided, further,
that no shares of Stock which have been held by the Grantee for less than six (6) months
may be delivered in payment of the Exercise Price.

 

No certificates for
Option Shares purchased by exercise of this Option or registration of such
Shares in the Grantee’s name on the books of the Company shall be issued or
recorded until full payment of the Exercise Price for such Option Shares has
been received by the Company, and the Grantee shall have none of the rights of
a shareholder associated with such Option Shares until such certificates have
been so issued or, if said Option Shares are to be uncertificated, until such Option
Shares are so registered in the Grantee’s name.

 

6.                                      Option
Plan.                            This
Option is granted pursuant to and shall be governed by and subject to the
provisions of the Plan, as the same may be amended from time to time, the terms
thereof being hereby incorporated herein by reference.  Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the Plan.  In the event of any conflict between the
terms of the Plan and the terms of this Option, the terms of the Plan shall govern.

 

7.                                      Assignment.  This
Option is personal to the Grantee and is not transferable or assignable, in
whole or in part, except by will or by the laws of descent and distribution
upon the death of Grantee, or as otherwise permitted by Section 7 of the
Plan.

 

8.                                      Taxes.  The
Grantee shall make appropriate arrangements with the Company for the
satisfaction of all federal, state and local income and employment tax
withholding obligations applicable to the Option exercise, as provided under
the Plan.

 

9.                                      Adjustment.  In the event the outstanding shares of common
capital stock of the Company as a whole are increased, decreased, changed into,
or exchanged for a different number or kind of the Company’s shares or
securities, whether through stock dividend, stock split, reclassification,
merger, or the like, an approximate and proportionate adjustment shall be made
in the number, kind and per share exercise price of shares subject to any
unexercised portion of the Option.  Any
such adjustment shall be made without a change in the total price applicable to
the unexercised portion of the Option, but with a corresponding adjustment in
the price for each share covered by the Option.

 

10.                               Nature
of Option; Acknowledgement of Employee. 
In accepting this Option, the Grantee acknowledges and agrees that:

 

(a)                                  The
Plan is established voluntarily by the Company, it is discretionary in nature
and it may be modified, amended, suspended or terminated by the Company at any
time, unless otherwise provided in the Plan;

 

(b)                                 The
award of the Option is voluntary and does not create any right on the 

 

3

 

part
of the Employee to receive future grants of options, and all decisions with
respect to future option grants, if any, will be at the sole discretion of the
Company;

 

(c)                                  Neither
the Option, nor this Agreement confers upon the Employee any right with respect
to the continuation of employment with the Company; and

 

(d)                                 The
future value of the Shares is unknown and cannot be predicted with any degree
of certainty.

 

EXECUTED
in Broken Arrow, Oklahoma, as of the day and year first written above.

 

	
   

  	
  “Grantor”

  
	
   

  	
   

  
	
   

  	
  XETA
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Greg Forrest,

  
	
   

  	
  President and Chief
  Executive Officer

  

 

 

Accepted as of the
         day of                       ,
200 .

 

 

	
   

  	
   

  
	
  Printed Name:

  	
   

  

 

4Exhibit 10.7

 

 

KEY EMPLOYEE BONUS PLAN

 

Summary

 

The
Company provides an annual incentive bonus to those individuals who have been
identified as Key Employees (“KEP’s”). 
KEP participants are nominated by their respective executive officer
based on the guidelines provided below. 
The CEO has final authority over the list of each year’s participants
and their level of participation based.  Furthermore,
cash bonuses paid under the KEP Plan are subject to review by the Compensation
Committee of the Board of Directors of the Company and all equity grants of any
kind must be approved by the same committee. 
Finally, the total bonus pool distributed under the KEP Plan is subject
to the Company’s overall profitability.

 

There
are two levels of participation in the KEP Plan:  KEP and MVP. 
Participants at the KEP level will receive an annual cash incentive
bonus.  Participants at the MVP level are
eligible for a higher level of cash incentive bonus and equity grants most
likely in the form of restricted stock.  Sales
employees receiving any form of commissions are exempt from KEP nomination.

 

Guidelines
for Nomination as a KEP

 

A
nominee to participate in the KEP Plan will be a key influencer/leader in one
or more of the following areas:

 

·                  The
Company’s growth and/or profitability

·                  Employee
engagement

·                  The
employee effectively leads and motivates employees in his/her sphere of
influence

·                  The
experience of the customers – internal and external

·                  The
employee’s actions and attitudes consistently create a positive experience for
customers

 

A
nominee to participate in the KEP Plan will also:

 

·                  Consistently
live the Company’s Core Values;

·                  Perform
consistently above and beyond their responsibilities; and

·                  Have
a proven record of high performance.

 

Guidelines
for Nomination as an MVP

 

A
nominee to participate in the KEP Plan at the MVP level will:

 

·                  Qualify
as a KEP participant whose influence in the areas above is consistently and
significantly greater than most of his peers;

·                  Be
in the top 2% of all employees (non-Sales; non-Executive)

·                  Consistently
think “for the Company” rather than just for their functional area

·                  Consistently
solve significant problems, knock down barriers, and is a “go to” person to get
things done

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