SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
EXCALIBUR TECHNOLOGIES CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price of other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
(4) Proposed maximum aggregate value of transaction:
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[X] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid: $125.00
(2) Form, schedule or registration statement no.: PRELIMINARY PROXY
STATEMENT
(3) Filing party: EXCALIBUR TECHNOLOGIES CORPORATION
(4) Date filed: MAY 17, 1996
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(1) Set forth the amount on which the filing fee is calculated
and state how it was determined.
<PAGE>
EXCALIBUR TECHNOLOGIES CORPORATION
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Excalibur Technologies Corporation, a Delaware corporation ("Excalibur" or the
"Company"), will be held at The University Club located at 1 West 54th Street,
New York, New York 10022, at 10:00 a.m. on Friday, June 28, 1996, for the
following purposes:
Proposal 1. To elect eleven directors of the Company for terms
expiring at the 1996 Annual Meeting;
Proposal 2. To approve the adoption of an amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares
of common stock, par value $.01 per share, from 20,000,000 to 40,000,000
shares.
Proposal 3. To consider and act upon a proposal to approve an
increase in the number of shares of common stock which may be granted
under the 1989 Stock Option Plan from 2,450,000 to 3,450,000.
Proposal 4. To consider and act upon a proposal to approve the
Excalibur Technologies Corporation 1996 Employee Stock Purchase Plan.
and to transact such other business as may properly come before the meeting or
any adjournment thereof.
The close of business on May 30, 1996 has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
meeting.
PLEASE SIGN, DATE AND MAIL YOUR PROXY IN THE ENVELOPE PROVIDED FOR YOUR
CONVENIENCE. YOU MAY REVOKE THIS PROXY AT ANY TIME AND, IF YOU ATTEND THE
MEETING, YOU MAY VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors,
James H. Buchanan
Secretary
Dated: May 28, 1996
<PAGE>
EXCALIBUR TECHNOLOGIES CORPORATION
Annual Meeting of Shareholders
PROXY STATEMENT
This Proxy Statement is being mailed to shareholders on or about May 31,
1996 in connection with the solicitation of proxies for use at the 1996 Annual
Meeting of Shareholders of Excalibur Technologies Corporation, a Delaware
corporation (the "Company"), to be held at the time and place and for the
purposes set forth in the accompanying Notice of Meeting. The Company's
principal executive offices are located at 1921 Gallows Road, Suite 200, Vienna,
Virginia 22182.
On May 10, 1996, there were outstanding 12,352,167 shares of common stock,
par value $.01 per share, each entitled to one vote. The Board of Directors has
fixed May 30, 1996 as the record date for the determination of the shareholders
entitled to notice of and to vote at the Meeting.
A form of proxy is enclosed for use at the Meeting. The proxy may be
revoked by a shareholder at any time prior to the exercise thereof, and any
shareholder present at the meeting may revoke his proxy thereat and vote in
person if he or she so desires. When such proxy is properly executed and
returned, the shares it represents will be voted at the meeting in accordance
with any instructions noted thereon. If no direction is indicated, all shares
represented by valid proxies received pursuant to this solicitation (and not
revoked prior to exercise) will be voted for the election of the nominees for
directors named herein (unless authority to vote is withheld) and in favor of
all other proposals stated in the Notice of Meeting and described in this Proxy
Statement.
The Company's Annual Report for the fiscal year ended January 31, 1996 is
enclosed with this Proxy Statement for each shareholder.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
General
Eleven individuals, eight of whom are members of the present Board of
Directors, have been nominated for election as directors of the Company until
the next annual meeting and until their respective successors are elected and
qualified. Three individuals, who are not presently directors of the Company,
have been nominated for election as directors: Donald R. Keough, the Chairman of
the Board of Allen & Company Incorporated and formerly President, Chief
Operating Officer and a Director of The Coca-Cola Company; John G. McMillian,
formerly Chairman and Chief Executive Officer of Northwest Energy Company and
Allegheny & Western Energy Corporation; and Shaun C. Viguerie, First Vice
President-Investments with J.C. Bradford & Company.
The persons named in the proxy, who have been designated by the
management, intend, unless otherwise instructed on the proxy card, to vote for
the election to the Board of Directors of the persons named below. If any
nominee should become unavailable to serve, the proxy may be voted for the
election of another person designated by the Board of Directors. The Board has
no reason to believe any of the persons named will be unable to serve if
elected. The affirmative vote of the holders of a plurality of the shares of
common stock voting at the meeting is necessary for the election of directors.
Information Concerning Directors and Nominees
Information regarding each nominee for director is set forth in the
following table:
Name Age Position
Richard M. Crooks, Jr. 56 Chairman of the Board of Directors
Patrick C. Condo 39 President and Chief Executive Officer,
Director
Edwin R. Addison 39 Executive Vice President, Director
James W. Dowe, III 54 Chief Scientist, Director
Jay H. Diamond 44 Director
J. M. Kennedy 49 Director
W. Frank King III 56 Director
Philip J. O'Reilly 58 Director
Donald R. Keough 69 Nominee
John G. McMillian 69 Nominee
Shaun C. Viguerie 65 Nominee
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<PAGE>
Richard M. Crooks, Jr. has been Chairman of the Board of Directors and
a Director of the Company since June 1990. Mr. Crooks has been a President of
RMC Consultants, a financial advisory services firm, since June 1990. Mr.
Crooks is a director of and consultant to Allen & Company Incorporated
(Allen), a privately held investment banking firm, which is the Company's
principal shareholder. Mr. Crooks served as a Managing Director of Allen for
more than five years prior to June 1990. Mr. Crooks is a director of IMRE
Corporation, a biotechnology company engaged in developing, manufacturing and
marketing products for the treatment of immune-related diseases and cancers.
Patrick C. Condo was elected Chief Executive Officer in November, 1995 and
was elected to be a Director in January, 1996. Mr. Condo was elected President
in May, 1995. He became Executive Vice President in January 1995 after being the
Director of Business Development since November 1992. From October 1987 to
November 1992, Mr. Condo held several manager level positions for Digital
Equipment Corporation's Image, Video and Voice Business Unit and Software
Business Group in New Hampshire.
Edwin R. Addison became the Executive Vice President and a Director of the
Company in July 1995 in connection with the Company's acquisition of ConQuest
Software, Inc., which Mr. Addison helped found in 1989. Mr. Addison was the
President of ConQuest. Prior to ConQuest, Mr. Addison was a Senior Associate at
Booz Allen & Hamilton and a Senior Program Manager with Westinghouse Electric
Corporation. He has served from time to time as a part-time graduate instructor
in Computer Science and Electrical Engineering at The Johns Hopkins University
in Baltimore, Maryland.
James W. Dowe III has been the Company's Chief Scientist since its
formation in February 1980, and from February 1980 until June 1990, he was the
Chairman of the Board. He was also President and Chief Executive Officer from
the date of the Company's formation until July 1984. Mr. Dowe is a consultant to
the Company and is a frequent keynote speaker at industry events.
Jay H. Diamond has been a Director of the Company since February 1989. Mr.
Diamond has been a partner in the law firm of Tenzer Greenblatt LLP, in New
York, New York, since February 1996. Prior to that, he was a partner in the law
firm of Holtzmann, Wise & Shepard, in New York, New York, where he had been in
practice for more than five years.
J.M. Kennedy has been a Director of the Company since March 1992. He also
held the position of Chief Executive Officer of the Company from January 1992 to
November 1995, and he was President of the Company from May 1992. From January
1990 to January 1992, Mr. Kennedy was a partner in Geneva Group International, a
management consulting and search firm specializing in emerging software
companies. Prior to that, he held several sales, marketing and management
positions with Cullinet Inc., Seagate Technology, GRID Systems and IBM.
W. Frank King III was elected a Director of the Company in June 1992. He
is presently President and a Director of PSW Technologies, formerly Pencom
Software, a leading provider of technology and resources for open systems
computing. From 1988 to November 1991, Dr. King was a Senior Vice President of
Development of Lotus Development Corporation, a software company. Prior to
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<PAGE>
joining Lotus, Dr. King held various positions with IBM over 17 years, the most
recent as Vice President of Development in its Entry Systems Division. Dr. King
is a director of Weitek Corporation, a semiconductor company, State of the Art,
Inc., a developer of high-end microcomputer accounting software, SystemSoft
Corporation, a software engineering company, and Auspex, Inc., a computer server
manufacturer.
Philip J. O'Reilly has been a Director of the Company since April 1988.
Mr. O'Reilly is a partner in the law firm of O'Reilly, Marsh, Kearney &
Corteselli P.C., in Mineola, New York. Mr. O'Reilly has been in private
practice for more than the past five years. Mr. O'Reilly is a director of
IMRE Corporation, a biotechnology company engaged in developing,
manufacturing and marketing products for the treatment of immune-related
diseases and cancers.
Donald R. Keough has been an advisor to the Board of Directors of The
Coca-Cola Company since April 15, 1993, and Chairman of the Board of Allen &
Company Incorporated, a New York investment banking firm, since April 15, 1993.
Mr. Keough retired as President, Chief Operating Officer and a Director of The
Coca-Cola Company on April 15, 1993, where he had been employed since 1950. From
1986 to 1993, he also served as Chairman of the Board of Coca-Cola Enterprises,
Inc., the world's largest bottling system. Mr. Keough serves on the Boards of
Directors of Allen & Company Incorporated, National Service Industries, Inc. (a
diversified manufacturing and service company), H.J. Heinz Company, The
Washington Post Company, Home Depot, Inc.
and McDonald's Corporation.
John G. McMillian owns a half interest in Peter Hughes Diving Company, a
charter company, and Contender Boats, Inc., a boat manufacturer. He was Chairman
and Chief Executive Officer of Allegheny & Western Energy Corporation, a natural
gas production and distribution company, from July, 1987 until July 1995, when
the company was sold. In October, 1986, Mr. McMillian purchased Burger Boat
Company, Inc., a boat manufacturer and served as its Chairman and Chief
Executive Officer until March, 1989, when the company was sold. He was the
founder and served as Chairman and Chief Executive Officer of Northwest Energy
Company, a major supplier of natural gas, from 1973 to 1983. Mr. McMillian
serves on the Board of Directors of /Sun Trust/Miami, N.A.
Shaun C. Viguerie is First Vice President - Investments with J.C.
Bradford & Co. in New Orleans, Louisiana, a securities brokerage firm, where
he has been employed for more than the past five years. Mr. Viguerie has
been in the securities industry for forty years. He has been a member of the
New York Stock Exchange, the Chicago Board of Trade, the Chicago Mercantile
Exchange, and other commodity exchanges.
Information Concerning the Board of Directors and its Committees
The Board of Directors held 7 meetings during the fiscal year ended
January 31, 1996; the Committees of the Board of Directors held 20 meetings. The
average attendance in the aggregate of the total number of meetings of the Board
and the total number of Committee meetings was 96%. Each director attended more
than 75% of the meetings of the Board of Directors.
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<PAGE>
The Board of Directors has established a number of Committees,
including the Audit Committee, the Compensation Committee and the Stock
Option Plan Administration Committee. The Audit Committee, comprising three
directors (Mr. Diamond, Chairman, Dr. King and Mr. O'Reilly) meets with the
Company's management, including its Chief Financial Officer and its
independent accountants several times a year to discuss internal controls and
accounting matters, the Company's financial statements, and the scope and
results of the auditing programs of the independent accountants. The Audit
Committee met six times during fiscal 1996. The Compensation Committee,
comprising three directors (Mr. Diamond, Chairman, Dr. King and Mr. O'Reilly)
administers management compensation and makes recommendations in that regard
to the Board. The Compensation Committee met two times during fiscal 1996.
The Stock Option Plan Administration Committee comprising two directors (Mr.
Diamond and Mr. O'Reilly) administers the Company's Stock Option Plan. The
Stock Option Plan Administration Committee met 12 times during fiscal 1996.
Each non-employee director, who is not an officer of the Company, is paid
$5,000 for each meeting of the Board or its Committees they attend, in person or
by telephone, up to a maximum of $20,000 per fiscal year. Mr. Crooks and Mr.
Diamond are not paid the foregoing fees. All directors are reimbursed for their
expenses in attending meetings of the Board or of its Committees. Each
non-employee director receives options to purchase 25,000 shares of common stock
of Excalibur upon joining the Board and additional options to purchase 25,000
shares of common stock of Excalibur after each subsequent five year period of
service as a member of the Board. The Chairman is granted additional options to
purchase 25,000 shares of common stock of Excalibur upon being elected Chairman
and after each subsequent five year period of service.
PROPOSAL 2
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED SHARES OF
COMMON STOCK FROM 20,000,000 TO 40,000,000 SHARES
At the Annual Meeting, the shareholders will be asked to consider and to
vote upon an amendment to the Certificate (the "Proposed Amendment") to increase
the number of authorized shares of Common Stock from 20,000,000 to 40,000,000
shares. The form of the Proposed Amendment to the Company's Certificate is
attached as Exhibit A hereto.
The Company is authorized pursuant to the Certificate to issue up to
20,000,000 shares of Common Stock. As of May 10, 1996, the Company had
outstanding 12,352,167 shares of Common Stock, 271,800 shares are reserved for
issuance upon conversion of the outstanding shares of cumulative convertible
preferred stock and 2,912,146 shares are reserved for issuance upon exercise of
outstanding options and options available for grant under the Company's Stock
Option Plans.
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<PAGE>
Purpose and Effect of Amendment
The Board of Directors considers the Proposed Amendment advisable in order
to provide flexibility for future capital requirements. The development of the
Company to date has been financed to a considerable extent through the issuance
of Common Stock in public and private offerings and the acquisition of ConQuest
Software, Inc. ("ConQuest") was effected by issuing shares of common stock in
exchange for shares of ConQuest. Therefore, the Board of Directors believes that
it is important the Company be in a position to make additional issuances of its
Common Stock or convertible securities if circumstances warrant such issuances
to enable the Company to raise capital or to make acquisitions. Approval by
shareholders of the Proposed Amendment at the Annual Meeting could also result
in the Company avoiding the need in the future to call and hold a special
shareholder's meeting for such purpose.
If the Proposed Amendment is adopted, the Board of Directors will be
empowered to authorize the issuance of the additional shares of Common Stock
without further shareholder approval. Such purposes could include, without
limitation, issuance of shares of Common Stock in public or private sales for
cash as a means of obtaining capital for use in the Company's business, employee
benefit plans or as part or all of the consideration required to be paid by the
Company for acquisitions of other businesses or properties. The Company does not
presently have any plans, agreements, understandings or arrangements that will
or could result in the issuance of any shares of Common Stock for such purposes.
Although such additional shares could be used to dilute the stock ownership of
or otherwise create voting impediments to persons seeking to obtain control of
the Company, approval of the Proposed Amendment is not being sought for that
purpose.
The issuance of additional shares of Common Stock would result in dilution
to the interests of the Company's shareholders. None of the Company's common
shareholders has any preemptive rights.
In the event that the Proposed Amendment is not approved at the Annual
Meeting, the Company's ability to obtain financing or to make acquisitions
through the issuance of shares of Common Stock will continue to be limited to
the number of currently authorized shares.
Recommendation and Vote
The Board of Directors believes that the Proposed Amendment is advisable
in order to provide flexibility for further capital requirements. Adoption of
this proposal requires an affirmative vote by the holders of a majority of the
outstanding Common Stock. Any shares not voted (whether by abstention, broker
non-vote or otherwise) have the effect of a negative vote. The Board believes
that the Proposed Amendment is in the best interests of the Company and
recommends that shareholders vote "FOR" the Proposed Amendment to the Company's
Certificate of Incorporation to increase the authorized shares of Common Stock
from 20,000,000 to 40,000,000 shares.
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<PAGE>
PROPOSAL 3
APPROVAL OF AN INCREASE IN THE NUMBER OF SHARES OF COMMON STOCK WHICH MAY BE
GRANTED UNDER THE 1989 STOCK OPTION PLAN FROM 2,450,000 TO 3,450,000.
In September 1989, the Board of Directors of the Company and its
Stockholders approved the Company's Incentive Stock Option Plan (the "1989
Plan"), a copy of which is attached as Exhibit B. The purpose of the 1989 Plan,
which provides for grant of options to purchase shares of the Company's Common
Stock ($.01 par value) is to promote the interest of the Company and its
shareholders by providing long-term incentives to those persons with significant
responsibility for the success and growth of the Company, by strengthening the
Company's ability to recruit and obtain officers and other employees of the
Company, and by aligning the interests of such persons with those of the
Company's shareholders by facilitating their purchase of equity interest in the
Company. At present, the 1989 Plan authorizes the granting of stock options and
other forms of incentive compensation to purchase 2,450,000 shares of the
Company's Common Stock. The Company has granted options to purchase 2,047,437
shares under the 1989 Plan, almost all of the shares available. Accordingly, in
order to continue to offer incentive compensation to new and existing employees
in the form of stock ownership of the Company and for the Company to be able to
issue stock options and other forms of stock-based incentive compensation, the
Board has deemed it advisable to amend the 1989 Plan to increase the number of
share authorized to be issued under the 1989 Plan to 3,450,000 shares from
2,450,000 shares. In the opinion of the Board, the authorization to issue
additional shares would provide the necessary flexibility to motivate and reward
the employees of the Company in a manner that would improve the Company's
financial performance.
All other provisions of the 1989 Plan, as approved and amended by the
Stockholders, would remain in effect. The 1989 Plan provides a limit of
2,450,000 on the number of shares available from grants under the 1989 Plan. As
of May 10, 1996, 402,563 shares remain available for grant under the 1989 Plan.
It is not possible to determine the number or value of awards that would
have been distributed if the 1989 Plan, as amended, had been in effect during
the year ended January 31, 1996.
Recommendation and Vote
The Board of Directors believes that the proposed increase is advisable in
order to permit further grants under the 1989 Plan. Adoption of this proposal
requires an affirmative vote by the holders of a majority of the outstanding
Common Stock present and entitled to vote at the meeting. Any shares not voted,
whether by abstention, broker non-vote or otherwise, have no impact on the vote.
The Board recommends that shareholder vote "FOR" the proposal to increase the
number of shares authorized to be issued under the 1989 Plan to 3,450,000 shares
from 2,450,000 shares.
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<PAGE>
PROPOSAL 4
APPROVAL AND ADOPTION OF
1996 EMPLOYEE STOCK PURCHASE PLAN
In 1996, the Board of Directors adopted the Stock Purchase Plan subject to
stockholder approval. The following summary of the Stock Purchase Plan does not
purport to be complete and is subject to and qualified in its entirety by
reference to the full text of such plan, annexed hereto as Exhibit C.
The purpose of the Stock Purchase Plan is to encourage eligible employees
to acquire shares of the Company's Common Stock. The Company, by means of the
Stock Purchase Plan, wishes to provide a plan whereby employees can acquire
shares of Common Stock on a payroll deduction basis. The Company believes that
employee participation in ownership of the Company on this basis will be to the
mutual benefit of the employees and the Company.
Shares Reserved for the Plan
The aggregate number of shares of Common Stock which may be purchased
under the Plan shall not exceed 250,000, subject to adjustment in the event of
stock dividends, stock splits, combination of shares, recapitalizations, or
other changes in the outstanding Common Stock. Any such adjustment will be made
by the Board. Shares issues under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares.
Eligible Participants
All active employees of the Company are eligible. Approximately 133
employees would have been eligible to participate as of May 1, 1996.
Material Features of the Plan
Beginning August 1, 1996, the Company may make grants of options on
February 1, and/or August 1 of each year the Plan is in effect or on such other
date as the Committee (as defined herein) shall designate. Each option period
shall last for six months ending on the July 31 or January 31 immediately
following the grant of options or on such dates as the Committee determines.
Each eligible employee on a date of exercise shall be entitled to purchase
shares of Common Stock at a purchase price equal to 85% of the closing sale
price of shares of Common Stock in the over-the-counter market on the applicable
date of exercise. Dates of exercise shall take place on the last day of each
three month period ending January 31, April 30, July 31 and October 31 in which
Common Stock is traded in the over-the-counter market during the applicable
option period.
Payment for shares of Common Stock purchased under the Plan will be made
by authorized payroll deductions from an eligible employees' Eligible
Compensation (as defined herein) or, when authorized by the Committee, an
eligible employee may pay an equivalent amount for such shares. "Eligible
Compensation" means an eligible employee's total regular compensation payable
from the Company or a participating subsidiary of the Company during an option
period.
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<PAGE>
Eligible employees who elect to participate in the Plan will designate a
stated whole percentage equaling at least 1%, but no more than 10% of Eligible
Compensation, to be deposited into a periodic deposit account. On each date of
exercise, the entire periodic deposit account of each participant in the Plan is
used to purchase whole shares of Common Stock. The Company shall maintain a
stock purchase account for each participant to reflect the shares of Common
Stock purchased under the Plan by each participant. No participant in the Plan
is permitted to purchase Common Stock under the Plan at a rate that exceeds
$25,000 in fair market value of Common Stock, determined at the time options are
granted, for each calendar year.
All funds received by the Company from the sale of Common Stock under the
Plan may be used for any corporate purpose.
Tax Treatment
The following is a brief summary of the Federal income tax aspects of
awards to be made under the Performance Plan based upon the Internal Revenue
Code of 1986, as amended (the "Code") and other statutes, regulations and
interpretations in effect on the date hereof. This summary is not intended to be
exhaustive, and does not describe state or local tax consequences.
It is intended that the Stock Purchase Plan will constitute an "employee
stock purchase plan" under the provisions of Section 423 of the Code. No Federal
income tax liability will result from the grant or exercise of an option to
purchase shares of Common Stock pursuant to the Stock Purchase Plan, although
amounts deducted from payroll will be includible in an employee's compensation
as ordinary income. Participants will recognize gain or loss for Federal income
tax purposes upon disposition of the shares of Common Stock acquired upon
exercise of options purchased pursuant to the Stock Purchase Plan in an amount
equal to the difference between the amount received for such shares and the
price paid therefor upon exercise of the option. Such gain or loss will likely
constitute capital gain or loss for Federal income tax purposes. In the event of
a disqualifying disposition as defined in Sections 421 and 423 of the Code
(generally a sale of the shares within 2 years after the option grant),
participants would recognize ordinary income, rather than capital gains on the
difference between the exercise price and the stock's fair market value on the
date of grant, and the Company would generally be entitled to a deduction under
Section 162 of the Code to the extent that such ordinary income is realized by
the participants.
New Plan Benefits
It is not possible to determine how many eligible employees will
participate in the Plan in the future. Therefore, it is not possible to
determine with certainty the dollar value or number of shares of Common Stock
that will be distributed under the Plan. The Company anticipates, however, that
on the average approximately 50,000 shares of Common Stock will be distributed
annually during the five-year term of the Plan. Based on a per share price of
$20 (the closing sale price of the Common Stock in the over-the-counter market
on Friday, May 10, 1996) the benefits of the Plan during fiscal 1996 would have
been as follows:
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<PAGE>
EXCALIBUR TECHNOLOGIES CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
Name Dollar Value ($) Number of Shares
Patrick Condo $ 3,405 170
James Buchanan 912 45
James W. Dowe 2,206 110
Executive Group 15,816 790
Non-Executive 125,294 6,264
Officer/Employee Group
Plan Administration and Termination
The Board of Directors of the Company, or its delegate, shall appoint a
committee (the "Committee"), which shall be composed of one or more employees,
to administer the Plan on behalf of the Company. The Committee may delegate any
or all of the administrative functions under the Plan to such individuals,
subcommittees, or entities as the Committee considers appropriate. The committee
may adopt rules and procedures not inconsistent with the provisions of the Plan
for its administration. The Committee's interpretation and construction of the
Plan is final and conclusive.
The Board may at any time, or from time to time, alter or amend the Plan
in any respect, except that, without approval of the shareholders of Excalibur
Technologies Corporation, no amendment may increase the number of shares
reserved for purchase, or reduce the purchase price per share under the Plan,
other than as described above.
The Board shall have the right to terminate the Plan or any offering at
any time for any reason. The Plan is anticipated to continue in effect through
July 31, 2001.
Adoption of this proposal requires an affirmative vote by the holders of a
majority of the outstanding Common Stock present and entitled to vote at the
meeting. Any shares not voted (whether by abstention, broker non-vote or
otherwise) have no impact on the vote. The Board recommends that shareholders
vote FOR the approval of the Excalibur Technologies Corporation 1996 Employee
Stock Purchase Plan.
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<PAGE>
Executive Compensation.
Summary Compensation Table
The following table is the compensation paid by the Company for each of
the three years in the period ended January 31, 1996 to the Chief Executive
Officer and each of the other four most highly compensated current executive
officers of the Company whose compensation exceeded $100,000:
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Other Securities All
Annual Restricted Under- Other
Compen- Stock lying LTIP Compen-
Name and Principal Fiscal sation Award Option/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs(#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Patrick C. Condo 1996 146,833 46,128 -- -- 200,000 -- 131,862 (1)
Chief Executive 1995 94,633 73,856 -- -- 75,000 -- --
Officer and 1994 73,333 30,668 -- -- 15,000 -- --
President
Edwin R. Addison (2) 1996 87,500 78,250 -- -- 40,000 -- --
Executive Vice
President
James H. Buchanan (3) 1996 51,705 -- -- -- 100,000 -- 50,000 (9)
Vice President, Chief
Financial Officer,
Secretary and
Treasurer
James W. Dowe III 1996 125,000 -- -- -- -- -- --
Chief Scientist 1995 125,000 -- -- -- -- -- --
1994 125,000 -- -- -- -- -- --
J. M. Kennedy (4) 1996 200,000 33,000 -- -- -- -- 4,923 (6)
1995 225,000 20,000 -- -- -- -- 124,178 (7)
1994 250,000 145,000 -- -- -- -- 86,547 (8)
David Lambert (5) 1996 64,787 63,000 -- -- 50,000 -- 10,000 (9)
1995 125,000 41,875 -- -- -- -- 24,000 (9)
1994 125,000 43,240 -- -- 95,000 -- 16,000 (9)
<FN>
Mr. Crooks, the Chairman of the Company, does not receive a salary or any
cash compensation.
(1) Reimbursed relocation payments of $78,194 and reimbursed taxes $53,668.
(2) Mr. Addison joined the Company on July 20, 1995 when the Company acquired
ConQuest Software, Inc.
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<PAGE>
(3) Mr. Buchanan joined the Company on September 13, 1995.
(4) Mr. Kennedy resigned as Chief Executive Officer in November, 1995 as a
consequence of a stroke which he suffered in August, 1995.
(5) Mr. Lambert resigned as Chief Financial Officer, Secretary and Treasurer
as of June 16, 1995.
(6) Reimbursed relocation expense of $2,569 and reimbursed taxes of $2,354.
(7) Reimbursed commuting expenses of $13,282, relocation expenses of $54,528
and reimbursed taxes of $56,368.
(8) Reimbursed commuting expenses of $42,754 and reimbursed taxes of $43,793.
(9) Reimbursed relocation expenses.
</FN>
</TABLE>
- 12 -
<PAGE>
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable
Individual Grants Value at Assumed
----------------- Annual Rates of
% of Total Stock Price
Options Appreciation for
Granted to Exercise Option Term
Options Employees in or Base Expiration -----------
Name Granted (#) Fiscal Year Price Date 5% ($) 10% ($)
- ---- ----------- ----------- -------------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Patrick C.
Condo 200,000 (1) 21.9% 100,000 - $12.41 6/2/2005 $780,460 $1,977,830
100,000 - $15.97 11/1/2005 $1,004,340 $2,545,210
Edwin R.
Addison 40,000 (1) 4.4% $15.23 7/20/2005 $383,122 $970,908
James H.
Buchanan 100,000 (1) 11.0% 30,000 - $16.85 9/13/2005 $317,907 $805,638
70,000 - $15.97 11/1/2005 $703,038 $1,781,647
James W.
Dowe III 0 -- -- -- -- --
J. M.
Kennedy (2) 0 -- -- -- -- --
David
Lambert (3) 50,000 (1) 5.5% $7.44 2/02/2005 $233,950 $592,872
<FN>
(1) These options vest in equal 12-1/2% increments every six months.
(2) Mr. Kennedy resigned as an employee of the Company in November, 1995, as a
consequence of the stroke he suffered in August, 1995.
(3) Mr. Lambert resigned as an employee of the Company as of June 16, 1995.
</FN>
</TABLE>
-13-
<PAGE>
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Values
The following table sets forth, for each of the executive officer names in
the Summary Compensation Table above, each exercise of stock options during the
fiscal year ended January 31, 1996, and the year-end value of unexercised
options:
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARS at (Options/SARS at
Shares Fiscal Year-End Fiscal Year-End ($)
Acquired on Exercisable/ Exercisable/
Name Exercise(#) Value Realized Unexercisable Unexercisable (1)
---- -------------- ------------- ------------------
<S> <C> <C> <C> <C>
Patrick C. Condo 0 0 300,000 $840,700/$3,947,200
33,750/266,250
Edwin R. Addison 0 0 192,526 $4,128,062/$446,950
157,526/35,000
James H. Buchanan 0 0 100,000 0/$1,176,600
0/100,000
James W. Dowe III 20,000 $443,025 175,000 $2,895,750/0
175,000/0
J. M. Kennedy(2) 160,000 $4,331,936 175,000 $1,921,500/0
175,000/0
David Lambert (3) 36,250 $127,113 0/0 0/0
<FN>
(1) The closing price of the Company's common stock on January 31, 1996, the
last trading day of the Company's fiscal year, was $28.00 per share.
(2) Mr. Kennedy's employment was terminated in November 1995 as a result of a
stroke which he suffered in August, 1995.
(3) Mr. Lambert resigned as an employee of the Company as of June 16, 1995.
</FN>
</TABLE>
- 14 -
<PAGE>
Report of the Compensation Committee
The following is the Report of the Compensation Committee of the Board of
Directors, describing the compensation policies and rationale applicable to the
Company's executive officers with respect to the compensation paid to such
executive officers for the fiscal year ended January 31, 1996 (the information
contained in the report shall not be deemed to be "soliciting material" or to be
"filed" with the Securities and Exchange Commission (SEC) nor shall such
information be incorporated by reference into any future filing under the
Securities Act of 1933, as amended (the Securities Act), or the Securities
Exchange Act of 1934, as amended (the Exchange Act), except to the extent that
the Company specifically incorporates it by reference into such filing):
As members of Compensation Committee, it is our duty to set compensation
policies applicable to the Company's executive officers and to evaluate the
performance of the Company's executive officers.
The compensation policy of the Company is that a substantial portion of
the annual compensation of each executive officer should relate to and be
contingent upon the performance of the Company, as well as the individual
contribution of each executive officer. Under the Company's bonus scheme,
bonuses are paid based upon the Company attaining certain sales, expense and
profitability goals and on each officer's individual contribution to the
Company's attainment of such goals.
Mr. Kennedy's base salary for fiscal 1996 was $200,000, which was
determined by negotiation between Mr. Kennedy and the Company. For the
fiscal year ended January 31, 1996, Mr. Kennedy was paid $33,000 for the
achievement of certain goals during the fiscal year ended January 31,
1996. Mr. Kennedy suffered a stroke in August, 1995 and Pat Condo was
then elected to serve as Chief Executive Officer. Mr. Kennedy resigned
as an employee in November, 1995. His employment agreement provided
that he be paid at the rate of $200,000 per annum until January 31,
1997.
Mr. Condo's base salary for fiscal 1996 was $150,000 per annum,
which was increased to $200,000 as of February 1, 1996. Mr. Condo's
salary was determined by negotiation between Mr. Condo and the Company.
Mr. Condo was paid $46,128 for the achievement of certain goals during
the fiscal year January 31, 1996. Forty percent of Mr. Condo's
potential bonus was based on the achievement of quarterly revenue goals;
forty percent of his potential bonus was based on the achievement of
profitability goals and twenty percent was awarded at the discretion of
the Compensation Committee of the Board of Directors.
During fiscal 1996, the Committee also considered stock option grants to
each of the executive officers of the Company. If the officer received stock
options, it was based on his responsibilities and relative position in the
Company. These grants were approved by the Stock Option Plan Administration
Committee which includes Mr. Diamond and Mr. O'Reilly and which administers
the Company's Incentive Plan.
- 15 -
<PAGE>
No member of the Compensation Committee is a former or current officer or
employee of the Company or any of its subsidiaries.
Compensation Committee: Jay H. Diamond
Philip J. O'Reilly
W. Frank King III
Compensation Committee Interlocks and Insider Participation
Jay H. Diamond, a Director of the Company is a member of the law firm of
Tenzer Greenblatt LLP, New York, New York, which is performing legal services in
the current fiscal year. During the fiscal year ended January 31, 1996 Mr.
Diamond was a member of the law firm of Holtzmann, Wise & Shepard, New York, New
York. The fees paid to Holtzmann, Wise & Shepard did not exceed 5% of such
firm's gross revenues for its last full fiscal year.
Performance Graph
The following graph is a comparison of the cumulative total return to
shareholders of the Company's Common Stock at January 31, 1996 since February 1,
1991 to the cumulative total return over such period of (i) the NASDAQ Stock
Market-U.S., and (ii) the Standard & Poor's High Tech Composite, assuming an
investment in each of $100 on February 1, 1991 and the reinvestment of
dividends. The information contained in the Performance Graph shall not be
deemed to be "soliciting material" or to be "filed" with the SEC, nor shall such
information be incorporated by reference into any future filing under the
Securities Act or the Exchange Act, except to the extent that the Company
specifically incorporates it by reference into such filing.
(Cumulative Total Return graph appears here, plot points are as follows)
<TABLE>
<CAPTION>
Fiscal Year Ended January 31,
-----------------------------
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Excalibur Technologies
Corporation 100 124 91 84 55 204
NASDAQ Market Index 100 153 173 199 190 268
Standard & Poor's High
Technology Composite 100 107 112 137 153 227
</TABLE>
- 16 -
<PAGE>
Employment Agreements
On January 11, 1992, the Company entered into an Employment Agreement with J.
M. Kennedy, which was subsequently amended in February 1993, September 1993, and
February 1995 (as amended, the Employment Agreement). The Employment Agreement
provides that Mr. Kennedy will serve as Chief Executive Officer of the Company
until February 1, 1997. Under the Employment Agreement, Mr. Kennedy's annual
salary is $200,000, and he is eligible to receive additional incentive
compensation for achieving performance goals set by the Compensation Committee
of the Board of Directors. Pursuant to the Employment Agreement, Mr. Kennedy
received stock option grants to purchase 175,000 shares of Common Stock at
$17.02 per share and to purchase 60,000 shares at $1.00 per share. Mr. Kennedy
suffered a stroke in August, 1995, and as a consequence his employment was
terminated in November, 1995. Pursuant to the terms of his Employment Agreement,
he has been paid through January 31, 1997.
On July 20, 1995, the Company entered into an Employment Agreement with Edwin
Addison which provides that Mr. Addison will serve as Executive Vice President
of the Company until July 20, 1997 at an annual salary of $150,000. Mr. Addison
is eligible to receive additional incentive compensation upon the achievement of
certain goals by the Company. Pursuant to his employment agreement Mr. Addison
received options to purchase 40,000 shares of Common Stock at an exercise price
of $15.23 per share.
- 17 -
<PAGE>
Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of May 10, 1996, information concerning the
ownership of Common Stock of the Company of all persons known to the Company to
beneficially own 5% or more of the Company's Common Stock, each director of the
Company, each nominee who is not currently a director and all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
Percent
Amount and Nature of Class
Name and Address of Beneficial Beneficially
of Beneficial Owner Ownership (1) Owned
- ------------------- ------------- -----
<S> <C> <C>
Allen & Company Incorporated 3,187,846(2)(3) 25.2%
711 Fifth Avenue
New York, NY 10022
Richard M. Crooks, Jr 367,850(4) 3.0%
Patrick C. Condo 83,750(5) *
Edwin R. Addison 509,127(6) 4.0%
J. M. Kennedy 175,200(7) 1.4%
James W. Dowe III 175,492(8) 1.4%
Philip J. O'Reilly 30,000(9) *
Jay H. Diamond 5,000(10) *
W. Frank King III 13,000(11) *
Donald R. Keough 30,000(12) *
John G. McMillian 0
Shaun C. Viguerie 27,710(13) *
All directors and
executive officers 1,386,919(14) 10.6%
as a group (9 persons)
- 18 -
<PAGE>
<FN>
* Represents less than one percent of the outstanding common stock.
(1) To the Company's knowledge, each person listed has sole voting and
investment power as to the shares indicated, except as described below.
(2) Does not include 1,484,132 shares owned by persons, including Mr. Crooks
and entities which, together with Allen & Company Incorporated may be
considered a "group," as such term is defined by Section 13(d) of the
Securities Exchange Act of 1934, because many of these persons or entities
are Allen stockholders, officers, directors or relatives of the foregoing
(as reported on Schedule 13D filed with the Commission on April 8, 1994).
No person or entity included in this possible "group," with the exception
of Allen & Company Incorporated, owns 5% or more of the outstanding common
stock.
(3) Includes 271,800 shares of common stock issuable upon conversion of 27,180
shares of the Company's cumulative convertible preferred stock.
(4) Includes (a) 50,000 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options of the Company at a price
of $16.10 per share expiring June 28, 2000 and (b) 50,000 shares of common
stock issuable upon exercise of stock options of the Company at a price of
$20.56 per share expiring November 27, 2005. Does not include shares owned
by Allen & Company Incorporated, of which Mr. Crooks is a director and as
to which shares Mr. Crooks disclaims beneficial ownership..
(5) Includes (a) 8,750 shares of common stock owned beneficially but not of
record upon exercise of stock options at a price of $12.40 per share
expiring November 13, 2002; (b) 9,375 shares of common stock owned
beneficially but not of record upon exercise of stock options at a price of
$11.64 per share, expiring January 4, 2004; (c) 28,125 shares of common
stock owned beneficially but not of record upon exercise of stock options
at a price of $6.34 per share, expiring December 6, 2004; (d) 25,000 shares
of common stock owned beneficially but not of record, issuable upon
exercise of stock options at a price of $12.41 per share, expiring June 2,
2005; and (e) 12,500 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options at a price of $15.97 per
share expiring November 1, 2005.
(6) Includes (a) 127,767 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options at a price of $1.04 per
share, expiring April 30, 1997; (b) 13,732 shares of common stock owned
beneficially but not of record, issuable upon exercise of stock options at
a price of $2.07 per share expiring June 30, 1997; (c) 11,027 shares of
common stock owned beneficially but not of record, issuable upon exercise
of stock options at a price of $4.14 per share expiring December 31, 1998;
and (d) 5,000 shares of common stock owned beneficially but not of record,
issuable upon exercise of stock options at a price of $15.23 per share
expiring July 20, 2005.
(7) Includes 175,000 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options of the Company at a price
of $17.02 per share, expiring January 11, 2002.
- 19 -
<PAGE>
(8) Includes (a) 100,000 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options of the Company at a price
of $8.125 per share, expiring May 17, 1999; (b) 50,000 shares of common
stock owned beneficially but not of record, issuable upon exercise of stock
options of the Company at a price of $15.95 per share, expiring July 1,
2000; (c) 25,000 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options of the Company at a price
of $15.75 per share, expiring May 8, 2001.
(9) Includes 25,000 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options of the Company at a price
of $13.00 per share expiring March 12, 2003.
(10) Includes 25,000 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options of the Company at a price
of $11.50 per share expiring February 28, 2004.
(11) Includes 13,000 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options of the Company at a price
of $12.50 per share, expiring July 2, 2002.
(12) Does not include shares owned by Allen & Company Incorporated, of which
Mr. Keough is Chairman of the Board, and as to which shares Mr. Keough
disclaims beneficial ownership.
(13) Includes 510 shares owned beneficially by Mr. Viguerie's spouse, as to
which shares Mr. Viguerie disclaims beneficial ownership.
(14) Includes 766,776 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options of the Company.
</FN>
</TABLE>
Certain Relationships and Related Transactions.
Richard M. Crooks, Jr., the Chairman of the Board of Directors of the
Company, is a director of and consultant to Allen & Company Incorporated. Donald
R. Keough, a nominee for election as a director, is the Chairman of the Board of
Allen & Company Incorporated.
In March, 1996 the Company completed a private placement of 350,000
shares of its common stock at a price of $25.00 per share. Allen & Company
Incorporated served as placement agent and was paid a fee of $350,000.
The Company's policy is that it will not make loans to, or enter into
other transactions with directors, officers or affiliates unless such loans or
transactions are approved by a majority of the Company's independent
disinterested directors, may reasonably be expected to benefit the Company, and
will be on terms no less favorable to the Company than could be obtained from
unaffiliated third parties. The Company believes that the transactions set forth
herein were made on terms no less favorable to the Company than could have been
obtained from unaffiliated third parties.
- 20 -
<PAGE>
The Company has adopted provisions in its Certificate of Incorporation
that limit the liability of its directors for monetary damages arising from a
breach of their fiduciary duty as directors, except to the extent otherwise
required by the Delaware General Corporation Law. Such limitation of liability
does not affect the availability of equitable remedies such as injunctive relief
or rescission.
See also "Compensation Committee Interlocks and Insider Participation"
above.
Description of 1989 Stock Option Plan
In September 1989, the Company adopted, and its shareholders approved,
the 1989 Stock Option Plan (the "1989 Plan") which authorized the granting of
stock options and other forms of incentive compensation to purchase up to
300,000 shares of the Company's common stock in order to attract and retain
personnel who possess a high degree of competence, experience and motivation. In
meetings in each of January 1991, September 1991, August 1992 and May 1993, the
shareholders approved increases of 300,000, 300,000, 700,000 and 850,000 shares
in the number of shares which may be granted under the 1989 Plan. Accordingly,
at present, options to purchase up to 2,450,000 shares may be granted pursuant
to the 1989 Plan.
The 1989 Plan provides for the issuance of incentive stock options within
the meaning of Section 422A of the Internal Revenue Code and non-incentive stock
options, as well as stock appreciation rights. All employees, including officers
and directors who are also employees, are eligible to be granted incentive stock
options under the 1989 Plan. Non-incentive stock options may be granted under
the 1989 Plan to employees or to other persons who perform substantial services
for or on behalf of the Company, including officers and directors who are not
members of the Stock Option Plan Administration Committee of the Board of
Directors. Options are not transferable by the optionee, other than by will or
the laws of descent and distribution, and are exercisable during the optionee's
lifetime only by the optionee.
The 1989 Plan is currently administered by the Stock Option Plan
Administration Committee of the Board of Directors (the "Committee"), consisting
of Jay H. Diamond and Philip J. O'Reilly. Subject to the terms of the 1989 Plan,
the Committee has the authority to determine all terms and provisions under
which stock options are granted under the 1989 Plan, including determining the
individuals to whom options may be granted, the exercise price and number of
shares subject to each option, the time or times during which all or a portion
of each option may be exercised and certain other terms of each option. The
maximum term of options granted under the 1989 Plan is ten years.
- 21 -
<PAGE>
Under the Company's 1989 Plan, incentive stock options have been granted
to officers and key employees of the Company to purchase shares of the common
stock at a purchase price equal to the fair market value of the common stock on
the date of grant. The Committee has the power, when and to the extent it deems
appropriate and with the consent of optionees, to substitute outstanding options
with replacement options at a lower exercise price. Options granted and
outstanding under the 1989 Plan vest over a period of up to four years. The 1989
Plan provides that optionees may be granted stock appreciation rights ("SARs")
at the discretion of the Board of Directors. Upon the exercise of an SAR,
payment will be made to the optionee by the Company in an amount equal to the
excess of the fair market value of a share of common stock on the date of
exercise over the option price. Payment may be made in shares of common stock,
in cash, or partly in cash and partly in shares of common stock, as the
Committee shall determine. When an SAR is exercised, the related stock option is
surrendered; when a stock option is exercised, the related SAR, if any, is
surrendered. No SARs have been granted to date under the 1989 Plan. The vesting
schedule of outstanding options would accelerate under the 1989 Plan in the
event of the occurrence of certain events constituting a change in control of
the Company.
Upon termination of an employee for cause, such employee's stock options
will terminate. If the employee is involuntarily terminated without cause, his
stock options will be exercisable for three months following termination or
until the end of the option period, whichever is shorter. Upon the disability or
retirement of the employee, stock options will be exercisable within the lesser
of the remainder of the option period or one year from the date of disability or
retirement. Upon the death of an employee, stock options will be exercisable by
the deceased employee's representative within the lesser of the remainder of the
option period or one year from the date of the employee's death. Unless
otherwise determined by the Committee, only options which are exercisable on the
date of termination, death, disability or retirement may be subsequently
exercised. Options granted to non-employees including directors do not terminate
upon termination of such persons' relationship with the Company.
The 1989 Plan may be amended by the Board of Directors, except that the
Board may not, without the approval of the Company's stockholders, increase the
number of shares available for distribution, decrease the option price of a
stock option below 100% of the fair market value at grant, change the pricing
rule applicable for stock purchase rights, change the class of employees
eligible to receive awards under the 1989 Plan or extend the term of any option
award.
Description of 1995 Stock Option Plan
The 1995 Stock Option Plan authorizes the granting of stock options and
other forms of incentive compensation to purchase up to 400,000 shares of the
Company's common stock in order to attract and retain personnel who possess a
high degree of competence, experience and motivation. The terms of the 1995
Stock Option Plan are identical to the 1989 Stock Option Plan described above,
except that the 1995 Stock Option Plan does not provide that optionees may be
granted stock appreciation rights. The 1995 Stock Option Plan is currently
administered by the Stock Option Plan Administration Committee of the Board of
Directors consisting of Jay H.
Diamond and Philip J. O'Reilly.
- 22 -
<PAGE>
Compliance With Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 and regulations of
the SEC thereunder require the Company's executive officers and directors, and
persons who own more that ten percent of a registered class of the Company's
equity securities, to file reports of initial ownership and changes in ownership
with the SEC. Based solely on its review of copies of such forms received by the
Company, or on written representations from certain reporting persons that no
other reports were required for such persons, the Company believes that, during
or with respect to the period from February 1, 1995 to January 31, 1996, all of
the Section 16(a) filing requirements applicable to its executive officers,
directors and ten percent shareholders were complied on a timely basis.
OTHER MATTERS
Expenses of Solicitation
The accompanying proxy is solicited by and on behalf of the Board of
Directors of the Company, and the entire cost of such solicitation will be borne
by the Company. In addition to the use of the mails, proxies may be solicited by
directors, officers and employees of the Company, by personal interview,
telephone and telegraph. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries for the forwarding of solicitation
material and annual reports to the beneficial owners of stock held of record by
such persons, and the Company will reimburse them for reasonable out-of-pocket
and clerical expenses incurred by them in connection therewith.
Discretionary Authority
The Annual Meeting is called for the specific purposes set forth in the
Notice of Meeting and discussed above, and also for the purpose of transacting
such other business as may properly come before the Meeting. At the date of this
Proxy Statement, the only matters which management intends to present, or is
informed or expects that others will present for action at the Meeting, are
those matters specifically referred to in such notice. As to any matters which
may come before the Meeting other than those specified above, the proxy holders
will be entitled to exercise discretionary authority.
By Order of the Board of Directors,
James H. Buchanan
Secretary
Dated: Vienna, Virginia
May 28, 1996
- 23 -
<PAGE>
EXHIBIT A
Form of Proposed Amendment to the
Excalibur Technologies Corporation
Certificate of Incorporation
FOURTH:
The Corporation will have authority to issue Forty-One Million
(41,000,000) shares of Capital Stock of which Forty Million
(40,000,000) shares are Common Stock, $.01 par value per share (the
"Common Stock") and One Million (1,000,000) shares are Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of which
49,587 shares are designated as Cumulative Preferred Stock (the
"Convertible Preferred Stock").
<PAGE>
EXHIBIT B
EXCALIBUR TECHNOLOGIES CORPORATION
1989 INCENTIVE PLAN
SECTION 1. Purpose; Definitions
The purpose of the Excalibur Technologies Corporation 1989 Incentive Plan
(the "Plan") is to enable Excalibur Technologies Corporation (the "Company") to
attract, retain and reward key employees of the Company and its Subsidiaries and
Affiliates, and strengthen the mutuality of interests between such key employees
and the Company's stockholders, by offering such key employees performance-based
stock incentives and/or other equity interests or equity-based incentives in the
Company, as well as performance-based incentives payable in cash.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Company directly or indirectly owns at least 20% of
the combined voting power of all classes of stock of such entity or at least 20%
of the ownership interests in such entity.
(b) "Board" means the Board of Directors of the Company.
(c) "Book Value" means, as of any given date, on a per share basis (i) the
stockholders' Equity in the Company as of the end of the immediately preceding
fiscal year as reflected in the Company's consolidated balance sheet, subject to
such adjustments as the Committee shall specify at or after grant, divided by
(ii) the number of then outstanding shares of Stock as of such year-end date (as
adjusted by the Committee for subsequent events).
(d) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
(e) "Committee" means the Committee referred to in Section 2 of the Plan.
If at any time no Committee shall be in office, then the functions of the
Committee specified in the Plan shall be exercised by the Board.
(f) "Company" means Excalibur Technologies Corporation, a corporation
organized under the laws of the State of Delaware, or any successor corporation.
(g) "Deferred Stock" means an award made pursuant to Section 8 below of
the right to receive Stock at the end of a specified deferral period.
(h) "Disability" means disability as determined under procedures
established by the Committee for purposes of this Plan.
<PAGE>
(i) "Disinterested Person" shall have the meaning set forth in Rule
16b-3(d)(3) as promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (the "Exchange Act"), or any successor
definition adopted by the Commission.
(j) "Fair Market Value" means, as of any given date, unless otherwise
determined by the Committee in good faith, the mean between the highest and
lowest quoted bid price, regular way, of the Stock on the NASDAQ System or, if
no such sale of Stock occurs on such date, the fair market value of the Stock as
determined by the Committee in good faith.
(k) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422A of
the Code.
(l) "Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.
(m) "Other Stock-Based Award" means an award under Section 10 below that
is valued in whole or in part by reference to, or is otherwise based on, Stock.
(n) "Restricted Stock" means an award of shares of Stock that is subject
to restrictions under Section 7 below.
(o) "Stock" means the Common Stock, $.01 par value per share, of
the Company.
(p) "Stock Appreciation Right" means the right pursuant to an award
granted under Section 6 below to surrender to the Company all (or a portion) of
a Stock Option in exchange for an amount equal to the difference between (i) the
Fair Market Value, as of the date such Stock Option (or such portion thereof) is
surrendered, of the shares of Stock covered by such Stock Option (or such
portion thereof), subject, where applicable, to the pricing provisions in
Section 6(b)(ii) and (ii) the aggregate exercise price of such Stock Option (or
such portion thereof).
(q) "Stock Option" or "Option" means any option to purchase shares of
Stock (including Restricted Stock and Deferred Stock, if the Committee so
determines) granted pursuant to Section 5 below.
(r) "Stock Purchase Right" means the right to purchase Stock pursuant to
Section 9.
(s) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if the corporation
(other than the last corporation in the unbroken chain) owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in the chain.
In addition, the terms "Change in Control" and "Change in Control Price"
shall have the meanings set forth, respectively, in Sections 1 l(b), (c) and (d)
below and the term "Cause" shall have the meaning set forth in Section 5(i)
below.
- 2 -
<PAGE>
SECTION 2. Administration
The Plan shall be administered by a Committee of no fewer than two
Disinterested Persons, who shall be appointed by the Board and who shall serve
at the pleasure of the Board. The functions of the Committee specified in the
Plan shall be exercised by the Board, if and to the extent that no Committee
exists which has the authority to so administer the Plan.
The Committee shall have full authority to grant, pursuant to the terms of
the Plan, to officers and other key employees eligible under Section 4: (i)
Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv)
Deferred Stock, (v) Stock Purchase Rights and/or (vi) Other Stock-Based Awards.
In particular, the Committee shall have the authority:
(a) to select the officers and other key employees of the Company and its
Subsidiaries and Affiliates to whom Stock Options Appreciation Rights,
Restricted Stock, Deferred Stock, Stock Purchase Rights and/or Other Stock-Based
Awards may from time to time be granted hereunder;
(b) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Deferred Stock, Stock Purchase Rights and/or Other Stock-Based Awards, or any
combination thereof, are to be granted hereunder to one or more eligible
employees;
(c) to determine the number of shares to be covered by each such
award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any award granted hereunder (including, but not limited to, the
share price and any restriction or limitation, or any vesting acceleration or
waiver of forfeiture restrictions regarding any Stock Option or other award
and/or the shares of Stock relating thereto, based in each case on such factors
as the Committee shall determine, in its sole discretion);
(e) to determine whether and under what circumstances a Stock Option may
be settled in cash, Restricted Stock and/or Deferred Stock under Section 5(k) or
(1), as applicable, instead of Stock;
(f) to determine whether, to what extent and under what circumstances
grants and/or other awards under the Plan and/or other cash awards made by the
Company are to be made, and operate, on a tandem basis vis-a-vis other awards
under the Plan and/or cash awards made outside of the Plan, or on an additive
basis;
(g) to determine whether, to what extent and under what circumstances
Stock and other amounts payable with respect to an award under this Plan shall
be deferred either automatically or at the election of the participant
(including providing for and determining the amount (if any) of any deemed
earnings on any deferred amount during any deferral period);
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(h) to determine the terms and restrictions applicable to Stock
Purchase Rights and the Stock purchased by exercising such Rights; and
(i) to grant with the consent of the optionee, in substitution for
outstanding Stock Options, replacement Stock Options, which may be at a lower
exercise price, provided that, in the case of Incentive Stock Options, at an
exercise price less than the Fair Market Value of the Stock at the time of
replacement.
The Committee shall have the authority to adopt, alter and repeal such
rules, guidelines and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be made in the Committee's sole discretion and shall be final and binding
on all persons, including the Company and Plan participants.
SECTION 3. Stock Subject to Plan
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 2,450,000 shares. Such shares may consist,
in whole or in part, of authorized and unissued shares or treasury shares.
Subject to Section 6(b)(iv) below, if any shares of Stock that have been
optioned cease to be subject to a Stock Option, or if any such shares of Stock
that are subject to any Restricted Stock or Deferred Stock award, Stock Purchase
Right or Other Stock-Based Award granted hereunder are forfeited or any such
award otherwise terminates, without a payment being made to the participant in
the form of Stock, such shares shall again be available for distribution in
connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split spin-offs, spin-outs or other
change in corporate structure affecting the Stock, such substitution or
adjustment shall be made in the aggregate number of shares reserved for issuance
under the Plan, in the number and option price of shares subject to outstanding
Options granted under the Plan, in the number and purchase price of shares
subject to outstanding Stock Purchase Rights under the Plan, and in the number
of shares subject to other outstanding awards granted under the Plan as may be
determined to be appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a whole number.
Such adjusted option price shall also be used to determine the amount payable by
the Company upon the exercise of any Stock Appreciation Right associated with
any Stock Option.
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SECTION 4. Eligibility
Officers, directors and key employees of the Company and its Subsidiaries
and Affiliates (but excluding members of the Committee) and any other individual
as determined by the Committee who are responsible for or contribute to the
management, growth and/or profitability of the business of the Company and/or
its Subsidiaries and Affiliates are eligible to be granted awards under the
Plan.
SECTION 5. Stock Options
Stock Options may be granted alone, in addition to or in tandem with other
awards granted under the Plan and/or cash awards made outside of the Plan. Any
Stock Option granted under the Plan shall be in such form as the Committee may
from time to time approve.
Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant to any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of Stock Options (in
each case with or without Stock Appreciation Rights).
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) Option Price. The option price per share of Stock purchasable under an
Incentive Stock Option shall be determined by the Committee at the time of grant
but shall be not less than 100% of the Fair Market Value of the Stock at the
time of grant. Non-Qualified Stock Options may, in the discretion of the
Committee, may be granted at a price per share less than the Fair Market Value
of the Stock at the time of grant.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten years after
the date the Option is granted.
(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at or after grant. If the Committee provides, in its sole discretion,
that any Stock Option is exercisable only in installments, the Committee may
waive such installment exercise provisions at any time at or after grant in
whole or in part, based on such factors as the Committee shall determine, in its
sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise
provisions apply under Section 5(c), Stock Options may be exercised in whole or
in part at any time during the option period by giving written notice of
exercise to the Company specifying the number of shares to be purchased. Such
notice shall be accompanied by payment in full of the purchase price, either by
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check, note or such other instrument as the Committee may accept. As determined
by the Committee, in its sole discretion, at or after grant, payment in full or
in part may also be made in the form of Stock or, in the case of the exercise of
a Non-Qualified Stock Option, Restricted Stock or Deferred Stock subject to an
award hereunder (based, in each case, on the Fair Market Value of the Stock on
the date the option is exercised, as determined by the Committee).
No shares of Stock shall be issued until full payment therefor has
been made. An optionee shall generally have the rights to dividends or other
rights of a shareholder with respect to shares subject to the Option when the
optionee has given written notice of exercise, has paid in full for such shares,
and if requested, has given the representation described in Section 14(a).
(e) Non-Transferability of Options. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee.
(f) Termination by Death. Subject to Section 5(j), if an optionee's
employment by the Company or any Subsidiary or Affiliate terminates by reason of
death, any Stock Option held by such optionee may thereafter be exercised, to
the extent such option was exercisable at the time of death or on such
accelerated basis as the Committee may determine at or after grant (or as may be
determined in accordance with procedures established by the Committee), by the
legal representative of the estate or by the legatee of the optionee under the
will of the optionee, for a period of one year (or such other period as the
Committee may specify at grant) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(g) Termination by Reason of Disability. Subject to Section 5(j), if an
optionee's employment by the Company and any Subsidiary or Affiliate terminates
by reason of Disability, any Stock Option held by such optionee may thereafter
be exercised by the optionee, to the extent it was exercisable at the time of
termination or on such accelerated basis as the Committee may determine at or
after grant (or as may be determined in accordance with procedures established
by the Committee), for a period of one year (or such other period as the
Committee may specify at grant) from the date of such termination of employment
or until the expiration of the stated term of such Stock Option, whichever
period is the shorter, provided, however, that, if the optionee dies within such
one-year period (or such other period as the Committee shall specify at grant),
any unexercised Stock Option held by such optionee shall thereafter be
exercisable to the extent to which it was exercisable at the time of death for a
period of one year from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of termination of employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422A of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
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4 (h) Other Termination. Unless otherwise determined by the Committee (or
pursuant to procedures established by the Committee) at or after grant, if an
optionee's employment by the Company or any Subsidiary or Affiliate terminates
for any reason other than death or Disability, the Stock Option shall thereupon
terminate, except that such Stock Option may be exercised, to the extent
otherwise then exercisable, for the lesser of three months or the balance of
such Stock Option's term if the optionee is involuntarily terminated by the
Company or any Subsidiary or Affiliate without Cause. For purposes of this Plan,
"Cause" means a felony conviction of an optionee or the failure of an optionee
to contest prosecution for a felony, or an optionee's willful misconduct or
dishonesty, any of which is directly and materially harmful to the business or
reputation of the Company or any Subsidiary or Affiliate.
(i) Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under
Section 422A of the Code, or, without the consent of the optionee(s) affected,
to disqualify any Incentive Stock Option under such Section 422A.
To the extent required for "incentive stock option" status under
Section 422A(b)(7) of the Code (taking into account applicable Internal Revenue
Service regulations and pronouncements), the Plan shall be deemed to provide
that the aggregate Fair Market Value (determined as of the time of grant) of the
Stock with respect to which Incentive Stock Options granted are exercisable for
the first time by the optionee during any calendar year under the Plan and/or
any other stock option plan of the Company or any Subsidiary or parent
corporation (within the meaning of Section 425 of the Code) shall not exceed $
100,000. If Section 422A is hereafter amended to delete the requirement now in
Section 422A(b)(7) that the plan text expressly provide for the $100,000
limitation set forth in Section 422A(b)(7), then this first paragraph of Section
5(i) shall no longer be operative.
(j) Buyout Provisions. The Committee may at any time offer to buy out for
a payment in cash, Stock, Deferred Stock or Restricted Stock an option
previously granted, based on such terms and conditions as the Committee shall
establish and communicate to the optionee at the time that such offer is made.
(k) Settlement Provisions. If the option agreement so provides at grant or
is amended after grant and prior to exercise to so provide (with the optionee's
consent), the Committee may require that all or part of the shares to be issued
with respect to the spread value of an exercised Option take the form of
Deferred or Restricted Stock, which shall be valued on the date of exercise on
the basis of the Fair Market Value (as determined by the Committee) of such
Deferred or Restricted Stock determined without regard to the deferral
limitations and/or forfeiture restrictions involved.
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SECTION 6. Stock Appreciation Rights
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of the grant of such
Stock Option.
A Stock Appreciation Right or applicable portion thereof granted
with respect to a given Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option,
subject to such provisions as the Committee may specify at grant where a Stock
Appreciation Right is granted with respect to less than the full number of
shares covered by a related Stock Option.
A Stock Appreciation Right may be exercised by an optionee, subject
to Section 6(b), in accordance with the procedures established by the Committee
for such purpose. Upon such exercise, the optionee shall be entitled to receive
an amount determined in the manner prescribed in Section 6(b). Stock Options
relating to exercised Stock Appreciation Rights shall no longer be exercisable
to the extent that the related Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:
(i) Stock Appreciation Rights shall be exercisable only at such time
or times and to the extent that the Stock Options to which they relate shall be
exercisable in accordance with the provisions of Section S and this Section 6 of
the Plan; provided, however, that any Stock Appreciation Right granted to an
optionee subject to Section 16(b) of the Exchange Act subsequent to the grant of
the related Stock Option shall not be exercisable during the first six months of
its term, except that this special limitation shall not apply in the event of
death or Disability of the optionee prior to the expiration of the six-month
period. The exercise of Stock Appreciation Rights held by optionees who are
subject to Section 16(b) of the Exchange Act shall comply with Rule 16b-3
thereunder, to the extent applicable.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee
shall be entitled to receive an amount in cash and/or shares of Stock equal in
value to the excess of the Fair Market Value of one share of Stock over the
option price per share specified in the related Stock Option multiplied by the
number of shares in respect of which the Stock Appreciation Right shall have
been exercised, with the Committee having the right to determine the form of
payment. When payment is to be made in shares, the number of shares to be paid
shall be calculated on the basis of the Fair Market Value of the shares on the
date of exercise. When payment is to be made in cash, such amount shall be
calculated on the basis of the average of the highest and lowest quoted bid
price, of the Stock on the NASDAQ System during the applicable period referred
to in Rule 16b-3(e) under the Exchange Act.
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(iii) Stock Appreciation Rights shall be transferable only when and
to the extent that the underlying Stock Option would be transferable under
Section 5(e).
(iv) Upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation Right is related shall
be deemed to have been exercised for the purpose of the limitation set forth in
Section 3 on the number of shares of Stock to be issued under the Plan, but only
to the extent of the number of shares issued under the Stock Appreciation Right
at the time of exercise based on the value of the Stock Appreciation Right at
such time.
(v) In its sole discretion, the Committee may grant "Limited" Stock
Appreciation Rights under this Section 6, i.e., Stock Appreciation Rights that
become exercisable only in the event of a Change in Control, subject to such
terms and conditions as the Committee may specify at grant. Such Limited Stock
Appreciation Rights shall be settled solely in cash.
(vi) The Committee, in its sole discretion, may also provide that,
in the event of a Change in Control, the amount to be paid upon the exercise of
a Stock Appreciation Right or Limited Stock Appreciation Right shall be based on
the Change of Control Price, subject to such terms and conditions on the
Committee may specify at grant.
SECTION 7. Restricted Stock
(a) Administration. Shares of Restricted Stock may be issued either
alone, in addition to or in tandem with other awards granted under the Plan
and/or cash awards made outside the Plan. The Committee shall determine the
eligible persons to whom, and the time or times at which, grants of Restricted
Stock will be made, the number of shares to be awarded, the price (if any) to be
paid by the recipient of Restricted Stock (subject to Section 7(b)), the time or
times within which such awards may be subject to forfeiture, and all other terms
and conditions of the awards.
The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as the Committee
may determine, in its sole discretion.
The provisions of Restricted Stock awards need not be the same with
respect to each recipient.
(b) Awards and Certificates. The prospective recipient of a Restricted
Stock award shall not have any rights with respect to such award, unless and
until such recipient has executed an agreement evidencing the award and has
delivered a fully executed copy thereof to the Company, and has otherwise
complied with the applicable terms and conditions of such award.
(i) The purchase price for shares of Restricted Stock may be equal
to or less than their par value and may be zero.
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(ii) Awards of Restricted Stock must be accepted within a period of
60 days (or such shorter period as the committee may specify at grant) after the
award date, by executing a Restricted Stock Award Agreement and paying whatever
price (if any) is required under Section 7(b)(i).
(iii) Each participant receiving a Restricted Stock award shall be
issued a stock certificate in respect of such shares of Restricted Stock. Such
certificate shall be registered in the name of such participant, and shall bear
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such award.
(iv) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company until the restrictions
thereon shall have lapsed, and that, as a condition of any Restricted Stock
award, the participant shall have delivered a stock power, endorsed in blank,
relating to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following restrictions and
conditions:
(i) Subject to the provisions of this Plan and the award agreement,
during a period set by the Committee commencing with the date of such award (the
"Restricted Period"), the participant shall not be permitted to sell, transfer,
pledge or assign shares of Restricted Stock awarded under the Plan. Within these
limits, the Committee, in its sole discretion, may provide for the lapse of such
restrictions in installments and may accelerate or waive such restriction in
whole or in part, based on service, performance and/or such other factors or
criteria as the Committee may determine, in its sole discretion.
(ii) Except as provided in this paragraph (ii) and Section 7(c)(i),
the participant shall have, with respect to the shares of Restricted Stock, all
of the rights of a stockholder of the Company, including the right to vote the
shares and the right to receive any cash dividends. The Committee, in its sole
discretion, as determined at the time of award, may permit or require the
payment of cash dividends to be deferred and, if the Committee so determines,
reinvested, subject to Section 14(e), in additional Restricted Stock, to the
extent shares are available under Section 3, or otherwise reinvested. Pursuant
to Section 3 above, Stock dividends issued with respect to Restricted Stock
shall be treated as additional shares of Restricted Stock that are subject to
the same restrictions and other terms and conditions that apply to the shares
with respect to which such dividends are issued.
(iii) Subject to the applicable provisions of the award agreement
and this Section 7, upon termination of a participant's employment with the
Company or any Subsidiary or Affiliate for any reason during the Restriction
Period, all shares still subject to restriction will vest or be forfeited, in
accordance with the terms and conditions established by the Committee at or
after grant.
(iv) If and when the Restricted Period expires without a prior
forfeiture of the Restricted Stock subject to such Restricted Periods,
certificates for an appropriate number of unrestricted shares shall be delivered
to the participant promptly.
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(d) Minimum Value Provisions. In order to better ensure that award
payments actually reflect the performance of the Company and service of the
participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a Restricted Stock award, subject to such
performance, future service deferral and other terms and conditions as may be
specified by the Committee.
SECTION 8. Deferred Stock
(a) Administration. Deferred Stock may be awarded either alone, in
addition to or in tandem with other awards granted under the Plan and/or cash
awards made outside of the Plan. The Committee shall determine the eligible
persons to whom and the time or times at which Deferred Stock shall be awarded,
the number of shares of Deferred Stock to be awarded to any person, the duration
of period (the "Deferral Period") during which, and the conditions under which,
receipt of the Stock will be deferred, and the other terms and conditions of the
award in addition to those set forth in Section 8(b).
The Committee may condition the grant of Deferred Stock upon the
attainment of specified performance goals or such other factors or criteria as
the Committee shall determine, in its sole discretion.
The provisions of Deferred Stock awards need not be the same with
respect to each recipient.
(b) Terms and Conditions. The shares of Deferred Stock awarded pursuant to
this Section 8 shall be subject to the following terms and conditions:
(i) Subject to the provisions of this Plan and the award agreement
referred to in Section 8(b)(vi) below, Deferred Stock awards may not be sold,
assigned, transferred, pledged or otherwise encumbered during the Deferral
Period. At the expiration of the Deferral Period (or the Elective Deferral
Period referred to in Section 8(b)(v), where applicable), share certificates
shall be delivered to the participant, or his legal representative, in a number
equal to the shares covered by the Deferred Stock award.
(ii) Unless otherwise determined by the Committee at grant, amounts
equal to any dividends declared during the Deferral Period with respect to the
number of shares covered by a Deferred Stock award shall be paid to the
participant currently, or deferred and deemed to be reinvested in additional
Deferred Stock, or otherwise reinvested, all as determined at or after the time
of the award by the Committee, in its sole discretion.
(iii) Subject to the provision of the award agreement and this
Section 8, upon termination of a participant's employment with the Company or
Subsidiary or Affiliate for any reason during the Deferral Period for a given
award, the Deferred Stock in question will vest or be forfeited, in accordance
with the terms and conditions established by the Committee at or after grant.
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(iv) Based on service, performance and/or such other factors or
criteria as the Committee may determine, the Committee may, at or after grant,
accelerate the vesting of all or any part of any Deferred Stock award and/or
waive the deferral limitations for all or any part of such award.
(v) A participant may elect to further defer receipt of an award (or
an installment of an award) for a specified period or until a specified event
(the "Elective Deferral Period"), subject in each case to the Committee's
approval and to such terms as are determined by the Committee, all in its sole
discretion. Subject to any exceptions adopted by the Committee, such election
must generally be made at least one-year prior to completion of the Deferral
Period for such Deferred Stock award (or such installment).
(vi) Each award shall be confirmed by, and subject to the terms of,
a Deferred Stock agreement executed by the Company and the participant.
(c) Minimum Value Provisions. In order to better ensure that award
payments actually reflect the performance of the Company and service of the
participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a deferred stock award, subject to such
performance, future service, deferral and other terms and conditions as may be
specified by the Committee.
SECTION 9. Stock Purchase Rights
(a) Awards and Administration. Subject to Section 3 above, the Committee
may grant eligible participants Stock Purchase Rights which shall enable such
participants to purchase Stock (including Deferred Stock and Restricted Stock):
(i) at its Fair Market Value on the date of grant;
(ii) at 50% of such Fair Market Value on such date;
(iii) at an amount equal to Book Value on such date; or
(iv) at an amount equal to the par value of such Stock on such
date.
The Committee shall also impose such deferral, forfeiture and/or
other terms and conditions as it shall determine, in its sole discretion, on
such Stock Purchase Rights or the exercise thereof.
The terms of Stock Purchase Rights awards need not be the same with
respect to each participant.
Each Stock Purchase Right award shall be confirmed by, and be
subject to the terms of, a Stock Purchase Rights Agreement.
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(b) Exercisability. Stock Purchase Rights shall generally be exercisable
for such period after grant as is determined by the Committee not to exceed 30
days. However, the Committee may provide, in its sole discretion, that the Stock
Purchase Rights of persons potentially subject to Section 16(b) of the Exchange
Act shall not become exercisable until six months and one day after the grant
date, and shall then be exercisable for ten trading days at the purchase price
specified by the Committee in accordance with Section 9(a).
SECTION 10. Other Stock-Based Awards
(a) Administration. Other awards of Stock and other awards that are valued
in whole or in part by reference to, or are otherwise based on, Stock ("Other
Stock-Based Awards"), including, without limitation, performance shares,
convertible preferred stock, convertible debentures, exchangeable securities and
Stock awards or options valued by reference to Book Value or subsidiary
performance, may be granted either alone or in addition to or in tandem with
Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock or
Stock Purchase Rights granted under the Plan and/or cash awards made outside of
the Plan.
Subject to the provision of the Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
awards shall be made, the number of shares of Stock to be awarded pursuant to
such awards, and all other conditions of the awards. The Committee may also
provide for the grant of Stock upon the completion of a specified performance
period.
The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient.
(b) Terms and Conditions. Other Stock-Based Awards made pursuant to this
Section 10 shall be subject to the following terms and conditions:
(i) Subject to the provision of the Plan and the award agreement
referred to in Section 10(b)(v) below, shares subject to awards made under this
Section 10 may not be sold, assigned, transferred, pledged or otherwise
encumbered prior to the date on which the shares are issued, or, if later, the
date on which any applicable restriction, performance or deferral period lapses.
(ii) Subject to the provisions of the Plan and the award agreement
and unless otherwise determined by the Committee at grant, the recipient of an
award under this Section 10 shall be entitled to receive, currently or on a
deferred basis, interest or dividends or interest or dividend equivalents with
respect to the number of shares covered by the award, as determined at the time
of the award by the Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have been reinvested in
additional Stock or otherwise reinvested.
(iii) Any award under this Section 10 and any Stock covered by any
such award shall vest or be forfeited to the extent so provided in the award
agreement, as determined by the Committee, in its sole discretion.
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(iv) In the event of the participant's retirement, Disability or
death, or in cases of special circumstances, the Committee may, in its sole
discretion, waive in whole or in part any or all of the remaining limitations
imposed hereunder (if any) with respect to any or all of an award under this
Section 10.
(v) Each award under this Section 10 shall be confirmed by, and
subject to the terms of, an agreement or other instrument by the Company and by
the participant.
(vi) Stock (including securities convertible into Stock) issued on a
bonus basis under this Section 10 may be issued for no cash consideration. Stock
(including securities convertible into Stock) purchased pursuant to a purchase
right awarded under this Section 10 shall be priced at least 50% of the Fair
Market Value of the Stock on the date of grant.
SECTION 11. Change in Control Provisions
(a) Impact of Event. In the event of a "Change in Control" as defined in
Section 11 (b), unless otherwise decided by the Committee, the following
acceleration and valuation provisions shall apply:
(i) Any Stock Appreciation Rights (including, without limitation,
any Limited Appreciation Rights) outstanding for at least six months and any
Stock Options awarded under the Plan not previously exercisable and vested shall
become fully exercisable and vested.
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock, Deferred Stock, Stock Purchase rights and Other Stock-Based
Awards, in each case to the extent not already vested under the Plan, shall
lapse and such shares and awards shall be deemed fully vested.
(iii) The value of all outstanding Stock Options, Stock Appreciation
Rights, Restricted Stock, Deferred Stock, Stock Purchase Rights and Other
Stock-Based Awards, in each case to the extent vested, shall, unless otherwise
determined by the Committee in its sole discretion at or after grant but prior
to any Change in Control, be cashed out on the basis of the "Change in Control
Price" as defined in Section 11(d) as of the date such Change in Control is
determined to have occurred or such other date as the Committee may determine
prior to the Change in Control.
(b) Definition of "Change in Control". For purposes of Section
11(a), a "Change in Control" means the happening of any of the following:
(i) When any "person" as defined in Section 3(a)(9) of the Exchange
Act and as used in Sections 13(d) and 14(d) thereof, including a "group" as
defined in Section 13(d) of the Exchange Act but excluding the Company and any
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Subsidiary and any employee benefit plan sponsored or maintained by the Company
or any Subsidiary (including any trustee of such plan acting as trustee),
directly or indirectly, becomes the "beneficial owner" (as defined in Rule
13(d)-3 under the Exchange Act, as amended from time to time), of securities of
the Company representing 20 percent or more of the combined voting power of the
Company's then outstanding securities;
(ii) When, during any period of 24 consecutive months during the
existence of the Plan, the individuals who, at the beginning of such period,
constitute the Board (the "Incumbent Directors") cease for any reason other than
death to constitute at least a majority thereof, provided, however, that a
director who was not a director at the beginning of such 24-month period shall
be deemed to have satisfied such 24-month requirement (and be an Incumbent
Director) if such director was elected by, or on the recommendation of or with
the approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually (because they were directors at the
beginning of such 24-month period) or by prior operation of this Section
11(b)(ii); or
(iii) The occurrence of a transaction requiring stockholder approval
for the acquisition of the Company by an entity other than the Company or a
Subsidiary through purchase of assets, or by merger, or otherwise.
(c) Charge in Control Price. For purposes of this Section 11, "Change
Control Price" means the highest price per share bid in any transaction reported
on the NASDAQ System, or paid or offered in any bona fide transaction related to
a Change in Control of the Company at any time during the 60 day period
immediately preceding the occurrence of the Change in Control, in each case as
determined by the Committee except that, in the case of Incentive Stock Options
and Stock Appreciation Rights relating to Incentive Stock Options, such price
shall be based only on transactions reported for the date on which the optionee
exercises such Stock Appreciation Rights (or Limited Stock Appreciation Rights)
or, where applicable, the date on which a cashout occurs under Section 11
(a)(ii).
SECTION 12. Amendment and Termination
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of an
optionee or participant under a Stock Option, Stock Appreciation Right (or
Limited Stock Appreciation Right), Restricted or Deferred Stock award, Stock
Purchase Right or Other Stock-Based Award theretofore granted, without the
optionee's or participant's consent, or which, without the approval of the
Company's stockholders, would cause the Plan to no longer comply with Rule 16b-3
under the Exchange Act or any successor rule or other regulatory requirements.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent.
Subject to the above provisions, the Board shall have broad authority to
amend the Plan to take into account changes in applicable securities and tax
laws and accounting rules.
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SECTION 13. Unfunded Status of Plan
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that, unless the Committee otherwise determines
with the consent of the affected participant, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of the Plan.
SECTION 14. General Provisions
(a) The Committee may require each person purchasing shares pursuant to a
Stock Option or other award under the Plan to represent and to agree with the
Company in writing that the optionee or participant is acquiring the shares
without a view to distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed, and any applicable Federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
(b) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee of the
Company or any Subsidiary or Affiliate any right to continued employment with
the Company or a Subsidiary or Affiliate, as the case may be, nor shall it
interfere in any way with the right of the Company or a Subsidiary or Affiliate
to terminate the employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes includible
in the gross income of the participant for Federal income tax purposes with
respect to any award under the Plan, the participant shall pay to the Company,
or make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to such amount. Unless otherwise determined by the Committee,
withholding obligations may be settled with Stock, including Stock that is part
of the award that gives rise to the withholding requirement. The obligations of
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the Company under the Plan shall be conditional on such payment or arrangements
and the Company and its Subsidiaries and Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment or
any kind otherwise due to the participant.
(e) The actual or deemed reinvestment of dividends or dividend equivalents
in additional Restricted Stock (or in Deferred Stock or other types of Plan
awards) at the time of any dividend payment shall be permissible only if
sufficient shares of Stock are available under Section 3 for such reinvestment
(taking into account then outstanding Stock Options, Stock Purchase Rights and
other Plan awards).
(f) The Plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.
SECTION 15. Effective Date of Plan
The Plan shall be effective as of April 24, 1989, subject to the approval
of the Plan by a majority of the votes cast by the holders of the Stock at the
next annual stockholder's meeting in 1989. Any grants made under the Plan prior
to such approval shall be effective when made (unless otherwise specified by the
Committee at the time of grant), but shall be conditioned on, and subject to,
such approval of the Plan by such shareholders.
SECTION 16. Term of Plan
No Stock Option, Stock Appreciation Right, Restricted Stock award,
Deferred Stock award, Stock Purchase Right or Other Stock-Based Award shall be
granted pursuant to the Plan on or after the tenth anniversary of the date of
stockholder approval, but awards granted prior to such tenth anniversary may
extend beyond that date.
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EXHIBIT C
EXCALIBUR TECHNOLOGIES CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
Excalibur Technologies Corporation, a Delaware corporation, hereby
adopts this Excalibur 1996 Employee Stock Purchase Plan (the "Plan") as of the
Effective Date. The purposes of this Plan are as follows:
(1) To assist employees of the Company in acquiring a stock
ownership interest in the Company pursuant to a plan which is intended to
qualify as an "employee stock purchase plan" under section 423 of the
Internal Revenue Code of 1986, as amended.
(2) To help employees provide for their future security and to
encourage them to remain in the employment of the Company.
1. Definitions
Whenever any of the following terms is used in the Plan with the
first letter or letters capitalized, it shall have the following meaning unless
the context clearly indicates to the contrary (such definitions to be equally
applicable to both the singular and plural forms of the terms defined):
(a) "Code" means the Internal Revenue Code of 1986, as
amended.
(b) "Committee" means the committee appointed to
administer the Plan pursuant to paragraph 10.
(c) "Company" means Excalibur Technologies Corporation,
a Delaware corporation.
(d) "Dates of Exercise" means the dates as of which an Option
is exercised and the Stock subject to that Option is purchased. With respect to
any Option, the Dates of Exercise are the last day of each three month period
ending January 31, April 30, July 31 and October 31 in which Stock is traded in
the over-the-counter market during the Option Period in which that Option was
granted.
(e) "Date of Grant" means the date as of which an Option is
granted, as set forth in paragraph 3(a).
(f) "Eligible Compensation" means total cash compensation
received from the Company as regular compensation during an Option Period. By
way of illustration, and not by way of limitation, Eligible Compensation
includes regular compensation such as salary, wages, overtime, bonuses,
commissions, and incentive compensation, but excludes relocation expense
reimbursements, other reimbursements and income realized as a result of
participation in any stock option, stock purchase, or similar plan of the
Company.
<PAGE>
(g) "Effective Date" means August 1, 1996.
(h) "Eligible Employee" means any employee of the Company does
not, immediately after the Option is granted, own (within the meaning Code
Sections 423(b)(3) and 424(d)) stock possessing five percent or more of the
total combined voting power or value of all classes of stock of the company.
(i) "Option" means an option granted under the Plan to an
Eligible Employee to purchase shares of Stock.
(j) "Option Period" means with respect to any Option the
period beginning upon the Date of Grant and ending on the July 31 or January 31
immediately following the Date of Grant, whichever is earlier, or ending on such
other date as the Committee shall determine. No Option Period may exceed 5 years
from the Date of Grant.
(k) "Option Price" with respect to any Option has the
meaning set forth in paragraph 4(b).
(l) "Participant" means an Eligible Employee who has
complied with the provisions of paragraph 3(b).
(m) "Periodic Deposit Account" means the account established
and maintained by the Company to which shall be credited pursuant to Section
3(c) amounts received from Participants for the purchase of Stock under the
Plan.
(n) "Plan" means this Excalibur Technologies Corporation
1996 Employee Stock Purchase Plan.
(o) "Plan Year" means the fiscal year of the Company which
begins on February 1.
(p) "Stock" means shares of common stock, par value $.01
per share, of the Company.
(q) "Stock Purchase Account" means the account established and
maintained by the Company to which Stock purchased upon exercise of an Option
under the Plan shall be credited pursuant to Section 4(c).
(r) Subsidiary means any corporation other than the Company in
an unbroken chain of corporations beginning with the Company if at the time of
the granting of the Option each of the corporations other than the last
corporation, in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
2. Stock Subject to Plan
Subject to the provisions of paragraph 8 (relating to adjustment
upon changes in the Stock) the Stock which may be sold pursuant to Options
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granted under the Plan shall not exceed in the aggregate 250,000 shares, and may
be newly issued shares or treasury shares or shares bought in the market or
otherwise for purposes of the Plan.
3. Grant of Options
(a) General Statement
The Company may grant Options under the Plan to all Eligible
Employees on February 1 and/or August 1 of each Plan Year or on such other date
as the Committee shall designate. The term of each Option shall end on the last
day of the Option Period with respect to which the Option is granted. With
respect to each Offering Period each Eligible Employee shall be granted an
Option on the Date of Grant for as many full and fractional shares of Stock as
the Eligible Employee may purchase with up to 10% of the Compensation he or she
receives during the Option Period (or during any portion of the Option Period as
the Eligible Employee may elect to participate).
(b) Election to Participate
Each Eligible Employee who elects to participate in the Plan
shall communicate to the Company in accordance with procedures established by
the Committee an election to participate in the Plan whereby the Eligible
Employee designates a stated whole percentage equaling at least 1% but no more
than 10% of his or her Eligible Compensation during the Option Period to be
deposited periodically in his or her Periodic Deposit Account under subparagraph
(c). The cumulative amount deposited in the Periodic Deposit Account during a
Plan Year with respect to any Eligible Employee may not exceed the limitation
stated in subparagraph (d). A Participant's election to participate in the Plan
shall continue in effect during the current and subsequent Option Periods until
changed pursuant to subparagraph 3(c).
(c) Periodic Deposit Accounts
The Company shall maintain a Periodic Deposit Account for each
Participant and shall credit to that account in U.S. dollars all amounts
received under the Plan from the Participant. No interest will be paid to any
Participant or credited to his or her Periodic Deposit Account under the Plan
with respect to such funds. All amounts credited to a Participant's Periodic
Deposit Account shall be used to purchase Stock under subparagraph 4(c) and no
portion of a Participant's Periodic Deposit Account shall be refunded to him or
her.
Credits to an Eligible Employee's Periodic Deposit Account
shall be made by payroll deduction or by other alternate payment arrangements in
accordance with rules and procedures established by the Committee. An Eligible
Employee may increase, decrease or eliminate the periodic credits to his or her
Periodic Deposit Account for future periods by filing a new election amount at
any time during an Option Period. The change shall become effective in
accordance with the Committee's rules and procedures as soon as practicable
after the Company receives the election but the change will not affect the
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amounts deposited with respect to Eligible Compensation sooner than the Eligible
Compensation payable with respect to the next pay period after the Company
receives the authorization.
(d) $25,00 Limitation
No Eligible Employee shall be permitted to purchase Stock
under the Plan or under any other employee stock purchase plan of the Company or
of any Subsidiary which is intended to qualify under Code Section 423, at a rate
which exceeds $25,000 in fair market value of Stock (determined at the time the
Option is granted) for each calendar year in which any such Option granted to
such Participant is outstanding at any time.
4. Exercise of Options
(a) General Statement
On each Date of Exercise the entire Periodic Deposit Account
of each Participant shall be used to purchase at the Option Price whole and/or
fractional shares of Stock subject to the Option. Each Participant automatically
and without any act on his or her part will be deemed to have exercised his or
her Option on each such Date of Exercise to the extent that the amounts then
credited to the Participant s Periodic Deposit Account under the Plan are used
to purchase Stock.
(b) Option Price Defined
The Option Price per share of Stock to be paid by each
Participant on each exercise of his or her Option shall be an amount in U.S.
dollars equal to 85% of the fair market value of a share of Stock as of the
applicable Date of Exercise. The fair market value of a share of Stock as of an
applicable Date of Exercise shall be the closing sale price of a share of Stock
traded in the over-the-counter market on such date.
(c) Stock Purchase Accounts; Stock Certificates
The Company shall maintain a Stock Purchase Account for each
Participant to reflect the Stock purchased under the Plan by the Participant.
Upon exercise of an Option by a Participant pursuant to subparagraph 4(a), the
Company shall credit to the Participant's Stock Purchase Account the whole or
fractional shares of Stock purchased at that time.
Except as provided in paragraph 5, certificates with respect
to Stock credited to a Participant's Stock Purchase Account shall be issued only
on request by the Participant for a distribution of whole shares or when
necessary to comply with the transaction requirements outside the United States.
Upon issuance of such a Stock certificate to a Participant, the Participant's
Stock Purchase Account shall be adjusted to reflect the number of shares of
Stock distributed to the Participant.
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<PAGE>
5. Rights on Retirement, Death, Termination of Employment
If a Participant retires, dies, or otherwise terminates employment,
then to the extent practicable, no further amounts shall be credited to the
Participant's Periodic Deposit Account from any pay due and owing with respect
to the Participant after such retirement, death, or other termination of
employment. All amounts credited to such a Participant's Periodic Deposit
Account shall be used on the next Date of Exercise in that Option Period to
purchase Stock under paragraph 4. Such a Participant's Stock Purchase Account
shall be terminated, and Stock certificates with respect to whole shares of
Stock and cash with respect to fractional shares of Stock shall be distributed
as soon as practicable after such Date of Exercise.
Notwithstanding anything in this Plan to the contrary and except to
the extent permitted under Code Section 423(a), a Participant's Option shall not
be exercisable more than three months after the Participant retires or otherwise
ceases to be employed by the Company.
6. Restriction Upon Assignment
An Option granted under the Plan shall not be transferable otherwise
than by will or the laws of descent and distribution, and is exercisable during
the Participant's lifetime only by the Participant. The Company will not
recognize and shall be under no duty to recognize any assignment or purported
assignment by a Participant, other than by will or the laws of descent and
distribution, of the Participant's interest in the Plan or of his or her Option
or of any rights under his or her Option.
7. No Rights of Stockholder Until Exercise of Option
A Participant shall not be deemed to be a stockholder of the
Company, nor have any rights or privileges of a stockholder, with respect to the
number of shares of Stock subject to an Option. A Participant shall have the
rights and privileges of a stockholder of the Company when, but not until, the
Participant's Option is exercised pursuant to paragraph 4(a) and the Stock
purchased by the Participant at that time has been credited to the Participant's
Stock Purchase Account.
8. Changes in the Stock; Adjustments of an Option
If, while any Options are outstanding, the outstanding shares of
Stock have increased, decreased, changed into, or been exchanged for a different
number or kind of shares or securities of the Company, or there has been any
other change in the capitalization of the Company, through reorganization,
merger, recapitalization, reclassification, stock split, reverse stock split,
spinoff or similar transaction, appropriate and proportionate adjustments may be
made by the Committee in the number and/or kind of shares which are subject to
purchase under outstanding Options and to the Option Exercise Price or prices
applicable to such outstanding Options, including, if the Committee deems
appropriate, the substitution of similar options to purchase shares of another
company (with such other company's consent). In addition, in any such event, the
number and/or kind of shares which may be offered in the Options shall also be
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proportionately adjusted. No adjustments to outstanding Options shall be made
for dividends paid in the form of stock.
9. Use of Funds; Repurchase of Stock
All funds received or held by the Company under the Plan will be
included in the general funds of the Company free of any trust or other
restriction and may be used for any corporate purpose. The Company shall not be
required to repurchase from any Eligible Employee shares of Stock which such
Eligible Employee acquires under the Plan.
10. Administration by Committee
(a) Appointment of Committee
The board of directors of the Company, or its delegate, shall
appoint a Committee, which shall be composed of one or more members, to
administer the Plan on behalf of the Company. Each member of the Committee shall
serve for a term commencing on the date specified by the board of directors of
the Company, or its delegate, and continuing until he or she dies or resigns or
is removed from office by such board of directors, or its delegate.
(b) Duties and Powers of Committee
It shall be the duty of the Committee to conduct the
general administration of the Plan in accordance with its provisions. The
Committee shall have the power to:
(1) determine when the initial and subsequent
Option Periods will commence;
(2) interpret the Plan and the Options;
(3) adopt such rules for the administration,
interpretation, and application of the Plan as are
consistent with the Plan and Code Section 423; and
(4) interpret, amend, or revoke any such rules.
In its absolute discretion, the board of the directors of the
Company may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan. The Committee may delegate any of its
responsibilities under the Plan by designating in writing other persons to carry
out any or all of such responsibilities.
(c) Majority Rule
The Committee shall act by a majority of its members in
office. The Committee may act either by vote at a meeting or by a memorandum or
other written instrument signed by a majority of the Committee.
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<PAGE>
(d) Compensation; Professional Assistance; Good Faith
Actions
Each member of the Committee who is an employee of the Company
or a Subsidiary shall receive no additional compensation for his or her services
under the Plan. Each Committee member who is not an employee of the Company or a
Subsidiary shall receive such compensation for his or her services under the
Plan as may be determined by the board of directors of the Company, or its
delegate. All expenses and liabilities incurred by members of the Committee in
connection with the administration of the Plan shall be borne by the Company.
The Committee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons. The Committee, the Company, and its officers and
directors shall be entitled to rely upon the advice, opinions, or valuations of
any such persons. All actions taken and all interpretations and determinations
made by the Committee in good faith shall be final and binding upon all
Participants, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options, and
all members of the Committee shall be fully protected by the Company in respect
to any such action, determination or interpretation.
11. No Rights as an Employee
Nothing in the Plan nor any Option shall be construed to give any
person (including any Eligible Employee or Participant) the right to remain in
the employ of the Company or to affect the right of the Company to terminate the
employment of any person (including any Eligible Employee or Participant) at any
time with or without cause, to the extent otherwise permitted under law.
12. Term of Plan
No Option may be granted during any period of suspension of the Plan
or after termination of the Plan, and in no event may any Option be granted
under the Plan after five years from the commencement of the initial Option
Period.
13. Amendment of the Plan
The board of directors of the Company, or its delegate, may amend,
suspend, or terminate the Plan at any time; provided that approval by the vote
of the holders of more than 50% of the outstanding shares of the Stock entitled
to vote shall be required to amend the Plan to reduce the Exercise Price or
increase the number of shares of Stock reserved for the Options under the Plan.
14. Effect Upon Other Plans
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company, except to the extent required by law.
Nothing in this Plan shall be construed to limit the right of the Company (a) to
establish any other forms of incentives or compensation for employees of the
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Company or (b) to grant or assume options otherwise than under this Plan in
connection with any proper corporate purpose, including, but not by way of
limitation, the grant or assumption of options in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.
15. Notices
Any notice to be given under the terms of the Plan to the Company
shall be addressed to the Company in care of the Committee and any notice to be
given to the Eligible Employee shall be addressed to the Eligible Employee at
his or her last address as reflected in the Company's records. By a notice given
pursuant to this paragraph, either party may hereafter designate a different
address for notices to be given to it or the Eligible Employee. Any notice which
is required to be given to the Eligible Employee shall, if the Eligible Employee
is then deceased, be given to the Eligible Employee's personal representative if
such representative has previously informed the Company of his or her status and
address by written notice under this paragraph. Any notice shall have been
deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office,
branch post office, or other depository regularly maintained by the United
States Postal Services.
16. Titles
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of the Plan.
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