CONVERA CORPORATION
AMENDED AND RESTATED 2000 STOCK
OPTION PLAN
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SECTION
1. Purpose;
Definitions
The purpose of the Convera Corporation Amended
and Restated 2000 Stock Option Plan (the "Plan") is to enable
Convera Corporation (the "Company") to attract, retain and reward
officers, directors and key employees of the Company and its
Subsidiaries and Affiliates and any other individual as determined
by the Committee who is responsible for or contributes to the
management, growth and/or profitability of the business of the
Company and/or its Subsidiaries and Affiliates, and strengthen the
mutuality of interests between such persons and the Company's
stockholders, by offering such persons 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 a Parent or a Subsidiary.
(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, and any
successor thereto.
(e) "Committee"
means the committee of the Board consisting solely of two or more
persons who are (i) “nonemployee directors” within the
meaning of Rule 16b-3 under the Exchange Act, or any successor rule
or regulation and (ii) “outside directors” within the
meaning of Section 162(m) of the Code; provided however, that
clause (ii) shall apply only with respect to grants of Options
intended by the Committee to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code, and
the Regulations thereunder. 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 Convera 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.
(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 in accordance with Section 422 of the
Code.
(j) "Incentive
Stock Option" means any Stock Option intended to be and designated
as an "Incentive Stock Option" within the meaning of
Section 422 of the Code.
(k) "Non-Employee
Directors" shall have the meaning set forth in Rule 16b-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.
(1) "Non-Qualified
Stock Option" means any Stock Option that is not an Incentive Stock
Option.
(m) “Optionee”
means a person to whom a Stock Option has been granted under the
Plan.
(n) "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.
(o) “Parent”
means any corporation, which is a parent corporation (within the
meaning of Section 424(e) of the Code) with respect to the
Company.
(p) "Restricted
Stock" means an award of shares of Stock that is subject to
restrictions under Section 7 below.
(q) "Stock"
means the Class A Common Stock, $.01 par value per share, of the
Company.
(r) "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).
(s) "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.
(t) "Stock
Purchase Right" means the right to purchase Stock pursuant to
Section 9.
(u) "Subsidiary"
means any corporation that is a subsidiary corporation (within the
meaning of Section 424(f) of the Code) with respect to the
Company.
(v) "Ten-Percent
Stockholder" means an eligible Plan participant, who, at the time
an Incentive Stock Option is to be granted to him or her, owns
(within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, or of a Parent or a
Subsidiary.
In addition, the term "Cause" shall have the
meaning set forth in Section 5(h) below.
SECTION
2. Administration
The Plan shall be administered by the
Committee. 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, directors
and other key employees and any other individual as determined by
the Committee who is responsible for or contributes to the
management, growth and/or profitability of the business of the
Company and/or its Subsidiaries and Affiliates 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, directors and other key employees of the
Company and its Subsidiaries and Affiliates and any other
individual as determined by the Committee who is responsible for or
contributes to the management, growth and/or profitability of the
business of the Company and/or its Subsidiaries and Affiliates to
whom Stock Options, Stock 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 officers, directors, employees
and any other individual as determined by the Committee who is
responsible for or contributes to the management, growth and/or
profitability of the business of the Company and/or its
Subsidiaries and Affiliates;
(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(j) or (k), 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-à-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, Limits
(a) General.
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 14,250,000
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.
Any such adjustment in the Stock or securities
subject to outstanding Incentive Stock Options (including any
adjustments in the purchase price) shall be made in such manner as
not to constitute a modification as defined by Section 424(h)(3) of
the Code and only to the extent otherwise permitted by Sections 422
and 424 of the Code.
(b) Section
162(m). Awards under this Plan are eligible for
qualification as performance based compensation within the meaning
of Code Section 162(m), if that is the intent at the time of grant.
In the case of Stock Options and Stock Appreciation Rights, in
addition to the other requirements of Section 162(m), the annual
limit of shares of Stock subject to such awards shall not exceed 2
million shares to any individual. In the case of other
awards of Stock or cash which are intended to qualify as
performance based compensation under Section 162(m), such awards
must meet the conditions in the following paragraph and such annual
awards to any individual may not exceed 2 million shares in the
case of awards in Stock or $3 million in the case of awards in
cash.
(c) To qualify as a
performance based award (except in the case of Stock Options or
Stock Appreciation Rights that otherwise qualify) the award must be
subject to a performance condition (i) that is established (A) at
the time an award is granted or (B) no later than the earlier of
(1) 90 days after the beginning of the period of service to which
it relates, or (2) before the elapse of 25% of the period of
service to which it relates, (ii) that is uncertain of achievement
at the time it is established, and (iii) the achievement of which
is determinable by a third party with knowledge of the relevant
facts. Examples of measures that may be used include net
order dollars, net profit dollars, net profit growth, net revenue
dollars, revenue growth, individual performance, earnings per
share, return on assets, return on equity, and other financial
objectives, objective customer satisfaction indicators and
efficiency measures, each with respect to the Company and/or an
Affiliate or individual business unit.
Officers, directors and key employees of the
Company and its Subsidiaries and Affiliates 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.
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 (i) except as provided in
clause (ii) of this Section 5(a), be not less than 100% of the Fair
Market Value of the Stock at the time of grant and (ii) with
respect to any Incentive Stock Option granted to a Ten-Percent
Stockholder, not less than 110% of the Fair Market Value of the
Stock at the time of the 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 (five years in the
case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).
(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, if any, in full of the purchase
price, by such manner 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 be made in the form of check,
Stock, including any cashless method approved by the Committee, 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), or
any other legally permissible method.
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 Stock 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 13(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
af