SCHEDULE 14-A
(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
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c)
or section 240.14a-12
EXCALIBUR TECHNOLOGIES CORPORATION
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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Payment of Filing Fee (Check the Appropriate Box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(j)(2), or item 22(a)(2) of Schedule 14A.
[ ] $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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EXCALIBUR TECHNOLOGIES CORPORATION
9255 Towne Centre Drive, 9th Floor
San Diego, California 92121
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, November 17, 1995, for the
following purposes:
PROPOSAL 1. To elect seven directors of the Company for terms
expiring at the 1996 Annual Meeting;
PROPOSAL 2. To consider and act upon a proposal to approve, for purposes
of Section 422 of the Internal Revenue Code, the adoption of the Company's
1995 Stock Option Plan authorizing the granting of options to purchase up to
400,000 shares of the Company's common stock pursuant to which options to
purchase 322,950 shares of the Company's common stock have been granted to
Excalibur employees who were previously employed by ConQuest Software, Inc.
and to transact such other business as may properly come before the meeting or
any adjournment thereof.
The close of business on October 19, 1995 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,
Patrick Condo
President
Dated: October 16, 1995
EXCALIBUR TECHNOLOGIES CORPORATION
----------------------------------------------------
Annual Meeting of
Shareholders
----------------------------------------------------
PROXY STATEMENT
This Proxy Statement is being mailed to shareholders on or about October
20, 1995 in connection with the solicitation of proxies for use at the 1995
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 9255 Towne Centre Drive, 9th Floor,
San Diego, California 92121.
On September 22, 1995, there were outstanding 11,549,541 shares of common
stock, par value $.01 per share, each entitled to one vote. The Board of
Directors has fixed October 19, 1995 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, 1995 is
enclosed with this Proxy Statement for each stockholder who has not previously
been sent the Annual Report.
PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
Seven directors, all 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. 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. Mr. Kennedy is expected to serve upon recovering from his stroke. 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. 55 Chairman of the Board of Directors
J. M. Kennedy 48 Chief Executive Officer, Director
Edwin R. Addison 38 Executive Vice President, Director
James W. Dowe, III 53 Chief Scientist, Director
Jay H. Diamond 44 Director
W. Frank King III 55 Director
Philip J. O'Reilly 57 Director
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.
J. M. Kennedy has been the Chief Executive Officer of the Company since
January 1992, a Director since March 1992, and the President of the Company
since 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. The Company announced in August, 1995 that Mr. Kennedy suffered what
has been described as a stroke and is temporarily unable to fulfill his duties.
During his absence, Patrick Condo, the Company's President, is assuming Mr.
Kennedy's duties as Chief Executive Officer.
Edwin R. Addison was elected a Director of the Company in July, 1995
at the time when the Company acquired ConQuest Software, Inc. which Mr.
Addison helped to found in 1990. Mr. Addison is serving as the Company's
Executive Vice President. Prior to ConQuest, Mr. Addison was a Senior
Associate at Booz Allen & Hamilton and an engineer with Westinghouse. 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. In connection with the acquisition of ConQuest, Allen
& Company Incorporated, Mr. Crooks, Mr. Kennedy and Mr. Condo have agreed
to vote their shares in favor of the election of Mr. Addison to the Board.
James W. Dowe III has been the Company's Chief Scientist since its
formation in February 1980 and from February 1980 until June 1990. Chairman of
the Board. He was also President and Chief Executive Officer from the date of
the Company's formation until July 1984. In addition to working with the
Company, Mr. Dowe is a Vice President of Microbics Corporation, a private
biotechnology company in Carlsbad, California.
Jay H. Diamond has been a Director of the Company since February 1989. Mr.
Diamond is a partner in the law firm of Holtzmann, Wise & Shepard, in New York,
New York, where he has been in practice for more than five years.
W. Frank King III was elected a Director of the Company in June 1992. He
is presently President and a Director of 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 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 the developing,
manufacturing and marketing products for the treatment of immune-related
diseases and cancers.
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, 1995 to the Chief Executive
Officer and each of the other four most highly compensated current executive
officers of the Company whose compensation exceeded $100,000:
Long Term Compensation
----------------------------
Annual Compensation Awards Payouts
----------------------------- -------------------- --------
Other Securities All
Annual Restricted Under- Other
Compen- Stock lying LTIP Compen-
Name and PrinciFiscal sation Award Option/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs(#) ($) ($)
- -------------------- ---- ------- ------- ----------- ------- ------- ------- -----------
J. M. Kennedy 1995 225,000 20,000 124,169 (a)
Chief Executive 1994 250,000 145,000 86,547 (b)
Officer 1993 200,000 195,000 100,000
David Lambert(1) 1995 125,000 41,875 24,000 (c)
Executive Vice 1994 125,000 43,240 95,000 16,000 (c)
President, CFO, 1993 17,629
Secretary
and Treasurer
Patrick C.Condo(2) 1995 94,633 73,856 75,000
President 1994 73,333 30,668 15,000
1993 19,897
David C. Jones(3) 1995 140,000 42,273 4,510 (d)
Vice President,Sales 1994 140,000 37,464 15,000
and Marketing 1993 55,730 8,334 80,600 50,000 (c)
James W. Dowe I 1995 125,000
Chief Scientist 1994 125,000
1993 125,000
<FN>
(1) Mr. Lambert joined the Company on December 10, 1992 and resigned as an
employee as of June 16, 1995.
(2) Mr. Condo joined the Company on November 13, 1992 and became an executive
officer on August 5, 1994.
(3) Mr. Jones joined the Company on September 6, 1992 and resigned as an
employee on April 10, 1995.
(a) Reimbursed commuting expenses of $13,282, relocation expenses of $54,528
and reimbursed taxes of $56,368.
(b) Reimbursed commuting expenses of $42,754 and reimbursed taxes of
$43,793.
(c) Relocation expenses.
(d) Vacation upon termination of employment.
</FN>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Individual Grants Value of Assumed
---------------------------------- Annual Rates of
% of Total Stock Price
Options Exer- Appreciation for
Granted to cise or Expir- Option Term
Options Employees in Base ation -------------------
Name Granted (#) Fiscal Year Price Date 5% ($) 10% ($)
- --------- ----------- ----------- ----- --------- -------- --------
J. M.
Kennedy - -
David
Lambert(1) - -
Patrick C.
Condo 75,000 73.53% $6.34 12/06/04 $434,163 $963,052
David C.
Jones (2) - -
James W.
Dowe III - -
<FN>
(1) Mr. Lambert resigned as an employee of the Company as of June 16, 1995.
(2) Mr. Jones resigned as an employee of the Company on April 10, 1995.
</FN>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The Following table sets forth, for each of the executive officer named in
the Summary Compensation Table above, each exercise of stock options during the
fiscal year ended January 31, 1995, and the year-end value of unexercised
options:
Value of
Number of Unexercised
Unexercised In-the Money
Options at Options at
Shares Year-End: Year-End:
Acquired on Value Exercisable/ Exercisable/
Name Exercised($) Realized($) Unexercisable Unexercisable (1)
- ---- ------------ ----------- -------------- -----------------
J. M. -0- -0- 335,000
Kennedy 285,000/50,000 $390,000 / -0-
David -0- -0- 95,000
Lambert(2) 30,000/65,000 -0- / -0-
David C. -0- -0- 95,600
Jones (3) 95,600/-0- -0- / -0-
Patrick C. -0- -0- 100,000
Condo 8,750/91,250 -0- / -0-
James W. -0- -0- 195,000
Dowe III 195,000/-0- -0- / -0-
<FN>
(1) The closing price of the Company's common stock on January 31, 1995, the
last trading day of the Company's fiscal year end, was $7.50.
(2) Mr. Lambert resigned as an employee of the Company as of June 16, 1995.
(3) Mr. Jones resigned as an officer of the Company on January 10, 1995, and
resigned as an employee of the Company on April 10, 1995.
</FN>
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, 1995 (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 1995 and 1994 was $250,000
reduced to $200,000 effective August 1, 1994. The salary was determined by
negotiation between Mr. Kennedy and the Company. For the fiscal year ended
January 31, 1995, Mr. Kennedy was paid $20,000 for the achievement of
certain goals during the fiscal year ended January 31, 1994.
During fiscal 1995, 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. Crooks and Mr. Dowe and
which administers the Company's Incentive Plan.
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
Holtzmann, Wise & Shepard, New York, New York, which performed legal services
for the Company during the last fiscal year and is performing legal services in
the current fiscal year. The fees paid to Holtzmann, Wise & Shepard during the
fiscal year ended January 31, 1995 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, 1995 since February 1,
1990 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. 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.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG EXCALIBUR TECHNOLOGIES CORPORATION, THE NASDAQ STOCK MARKET-US INDEX
AND THE S&P HIGH TECH COMPOSITE INDEX
(Cumulative Total Return graph appears here, plot points are as follows)
Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95
EXCALIBUR TECHNOLOGIES
CORPPRATON $100 $175 $216 $159 $146 $ 95
NASDAQ STOCK MRKT - US $100 $103 $158 $179 $204 $195
S&P HIGH TECH COMPOSITE $100 $115 $123 $128 $158 $176
* $100 Invested on January 31, 1990 in stock or index -
including reinvestment of dividends.
Fiscal Year Ending January 31.
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.
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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of September 20, 1995, 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 and all directors and officers of the Company as a
group.
Percent
Amount and Nature of Class
Name and Address of Beneficial Beneficially
of Beneficial Owner Ownership (1) Owned
Allen & Company Incorporated 3,187,846(2)(3) 27.0%
711 Fifth Avenue
New York, NY 10022
Edwin R. Addison 511,736(4) 4.4%
Richard M. Crooks, Jr 322,000(5) 2.8%
J. M. Kennedy 310,200(6) 2.6%
James W. Dowe III 195,492(7) 1.7%
Philip J. O'Reilly 30,000(8) *
Jay H. Diamond 25,000(9) *
W. Frank King III 35,000(10) *
All directors and executive 1,451,928(11) 11.7%
officers as a group (8 persons)
<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 1,436,632 shares owned by persons, including Mr. Crooks
and entities which, together with Allen 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, 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) 127,767 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options at a price of $1.00 per
share, expiring April 30, 1997; (b) 13,731 shares of common stock owned
beneficially but not of record, issuable upon exercise of stock options at
a price of $2.00 per share expiring June 30, 1997; and (c) 11,027 shares of
common stock owned beneficially but not of record, issuable upon exercise
of stock options at a price of $4.00 per share expiring December 31, 1998.
(5) Includes 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. Does not include shares owned by Allen, of which Mr.
Crooks is a director, or 1,000 shares of common stock owned by Mr. Crooks'
daughter, as to which Mr. Crooks disclaims beneficial ownership.
(6) Includes (a) 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; (b) 60,000 shares of common
stock owned beneficially but not of record, issuable upon exercise of stock
options of the Company at a price of $1.00 per share, expiring January 11,
2002; (c) 75,000 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options to purchase 100,000 shares
of common stock of the Company at a price of $9.54 per share, of which an
additional 12,500 shares vest every six months beginning April 23, 1996
through October 23, 1996, expiring October 23, 2002.
(7) Includes (a) 120,000 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.
(8) 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.
(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 $11.50 per share.
(10) Includes (a) 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 $12.50 per share, expiring July 2, 2002; (b) 10,000 shares of common
stock owned beneficially but not of record, issuable upon exercise of stock
options of the Company at a price of $7.44 per share, expiring February 2,
2005.
(11) Includes 820,225 shares of common stock owned beneficially but not of
record, issuable upon exercise of stock options of the Company.
</FN>
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.
In April 1994, the Company completed a private placement offering of
625,000 shares of its common stock at an offering price of $8.00 per share. A
registration statement was filed March 31, 1995 covering these shares. Allen &
Company Incorporated acted as placement agent of the offering and was paid a fee
of $200,000 in connection with this private placement.
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.
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 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 Stock Option Plan. Accordingly, at
present, options to purchase up to 2,450,000 shares may be granted pursuant to
the 1989 Stock Option Plan.
The 1989 Stock Option 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 Stock Option Plan.
Non-incentive stock options may be granted under the 1989 Stock Option 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 1989
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 Stock Option Plan is currently administered by the Stock Option
Plan Administration Committee of the Board of Directors (the "Committee"),
consisting of Richard M. Crooks, Jr. and James W. Dowe III. Subject to the terms
of the 1989 Stock Option Plan, the Committee has the authority to determine all
terms and provisions under which stock options are granted under the Stock
Option 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 Stock Option Plan is ten years.
Under the Company's 1989 Stock Option 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 Stock Option Plan vest over a period of
up to four years. The 1989 Stock Option 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 Stock Option Plan. The vesting schedule of outstanding options would
accelerate under the 1989 Stock Option 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 Stock Option 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 Stock Option Plan or
extend the term of any option award.
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, 1994 to January 31, 1995, all of
the Section 16(a) filing requirements applicable to its executive officers,
directors and ten percent shareholders were complied with except that Mr.
Patrick Condo reported one option grant on Form 5 which was not filed on a
timely basis.
PROPOSAL 2
TO APPROVE, FOR PURPOSES OF SECTION 422 OF THE INTERNAL REVENUE
CODE, THE ADOPTION OF THE COMPANY'S 1995 STOCK OPTION PLAN AUTHORIZING THE
GRANTING OF OPTIONS TO PURCHASE UP TO 400,000 SHARES OF THE COMPANY'S
COMMON STOCK PURSUANT TO WHICH OPTIONS TO PURCHASE 322,950 SHARES OF THE
COMPANY'S COMMON STOCK HAVE BEEN GRANTED TO EXCALIBUR EMPLOYEES WHO WERE
PREVIOUSLY EMPLOYED BY CONQUEST SOFTWARE, INC.
In July, 1995 the Company acquired all of the outstanding shares of stock
and options to acquire shares of stock of ConQuest Software, Inc., a private
company located in Columbia, Maryland engaged in the business of providing
natural language text management software tools. In order to provide an
incentive to those ConQuest employees having a high degree of competence,
experience and motivation the Company's Board of Directors adopted a Stock
Option Plan (the "1995 Stock Option Plan"), a copy of which is attached as
Appendix A authorizing the granting of stock options or other forms of incentive
compensation to purchase up to 400,000 shares of the Company's common stock for
the purpose of granting stock options to the former ConQuest employees. The
Board of Directors then issued 322,950 of such options to those employees. All
of these options have an exercise price of $15.23 per share and vest in equal
12-1/2% increments every six months that the employee remains employed by
Excalibur. The options have a term of ten years and are otherwise identical to
options granted under the Company's 1989 Stock Option Plan which is described
above. However, the Company's 1989 Stock Option Plan is registered under the
Securities Act of 1933 (the "Act") with the Securities and Exchange Commission
("SEC"). The 1995 Stock Option Plan will not be registered under the 1933 Act
with the SEC until July 20, 1997.
This proposal, if adopted, will permit the options heretofore granted
under the 1995 Stock Option Plan to former ConQuest employees to be treated as
qualified incentive stock options under Section 422 of the Internal Revenue
Code, to the extent permitted by law. In the opinion of the Board of Directors
of the Company, this proposal should be approved in order to provide the
foregoing tax benefit to the recipients of these options. In connection with the
acquisition of ConQuest, Allen & Company Incorporated, Mr. Crooks, Mr. Kennedy
and Mr. Condo have agreed to vote their shares in favor of this Proposal 2. The
affirmative vote of the holders of a majority of the shares of common stock
voting at the meeting of shareholders is necessary to approve the adoption of
the 1995 Stock Option Plan pursuant to Section 422 of the Internal Revenue Code.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED PROPOSAL 2 AND RECOMMENDS
THAT THE SHAREHOLDERS VOTE TO APPROVE IT.
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 Richard M.
Crooks, Jr. and James W. Dowe III.
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,
Patrick Condo
President
Dated: San Diego, California
October 16, 1995
APPENDIX A
EXCALIBUR TECHNOLOGIES CORPORATION
1995 INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS
The purpose of the Excalibur Technologies Corporation 1995 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) "Disability" means disability as determined under procedures
established by the Committee for purposes of this Plan.
(h) "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.
(i) "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.
(j) "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.
(k) "Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.
(l) "Other Stock-Based Award" means an award under Section 6 below that is
valued in whole or in part by reference to, or is otherwise based on, Stock.
(m) "Stock" means the Common Stock, $.01 par value per share, of
the Company.
(n) "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.
(o) "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 11(b), (c) and (d)
below and the term "Cause" shall have the meaning set forth in Section 5(i)
below.
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, and/or (ii) 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 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, 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);
(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 400,000 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.
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
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 10(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.
(h) OTHER TERMINATION. Unless otherwise determined by the Committee (or
pursuant to procedures established by the Committee) at or after grant, if the
employment of an optionee 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.
SECTION 6. 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 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 6 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 6(b)(v) below, shares subject to awards made under this
Section 6 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 6 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 6 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.
(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 6.
(v) Each award under this Section 6 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 6 may be issued for no cash consideration. Stock
(including securities convertible into Stock) purchased pursuant to a purchase
right awarded under this Section 6 shall be priced at least 50% of the Fair
Market Value of the Stock on the date of grant.
SECTION 7. CHANGE IN CONTROL PROVISIONS
(a) IMPACT OF EVENT. In the event of a "Change in Control" as defined in
Section 7(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 7(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
7(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
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
7(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) CHANGE IN CONTROL PRICE. For purposes of this Section 7, "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 7(a)(ii).
SECTION 8. 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.
SECTION 9. 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 10. 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
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 11. EFFECTIVE DATE OF PLAN
The Plan shall be effective as of June 28, 1995. All options granted under
the Plan shall be non-qualified subject to and conditional upon approval of the
Plan by the affirmative vote of a majority of the votes cast by holders of the
Stock at the next annual meeting of stockholders.
SECTION 12. TERM OF PLAN
No Stock Option 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.
Appendix B
PROXY FORM
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PROXY EXCALIBUR TECHNOLOGIES CORPORATION PROXY
9255 Towne Centre Drive, 9th Floor
San Diego, California 92121
The undersigned holder of Common Stock of Excalibur Technologies Corporation
(the "Company") hereby constitutes and appoints Patrick C. Condo and Jay H.
Diamond, and each of them, attorneys and proxies with full power of substitution
to each, for and in the name of the undersigned to vote the shares of Common
Stock of the Company, which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Shareholders of the Company to be
held at The University Club, 1 West 54th Street, New York, New York 10033, on
Friday, November 17, 1995 at 10:00 a.m., local time, or at any and all
adjournments thereof, an all matters as may properly come before the meeting.
The undersigned hereby revokes any and all proxies heretofore given with respect
to such meetings.
Each of such attorneys and proxies present at the meeting shall and may exercise
the powers granted hereunder.
Receipt is acknowledged of the Notice of Annual Meeting of Shareholders dated
October 16, 1995 and the Proxy Statement accompanying said notice.
Said attorneys are hereby instructed to vote as specified below. (If no
specification is made, this proxy will be voted FOR items 1 and 2 below.)
1. Election of the following six (6) nominees to serve as directors until the
next annual meeting of shareholders and until their successors are elected
and qualified.
Nominees: Richard M. Crooks, Jr., J.M. Kennedy, Edwin R. Addison,
Jay H. Diamond, James W. Dowe III, W. Frank King III and
Phillip J. O'Reilly
[ ] FOR [ ] WITHHELD [ ]______________________________________
For all nominees except as noted above
2. To consider and act upon a proposal to approve, for purposes of Section 422
of the Internal Revenue Code, the adoption of the Company's 1995 Stock
Option Plan authorizing the granting of options to purchase up to 400,000
shares of the Company's common stock pursuant to which options to purchase
322,950 shares of the Company's common stock have been granted to Excalibur
employees who were previously employed by ConQuest Software, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, to vote upon such other matters as any properly come
before the meeting.
Dated:_________________________________
_______________________________________
Signature
_______________________________________
Signature(s) if held jointly
Please sign you name as it appears hereon
In the case of joint owners or tenants in
common, each should sign. If signing as a
trustee, guardian or in any other repre-
sentative capacity or on behalf of a corp-
oration or partnership, please indicate
your title.
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