## **Exhibit 10.3**

 

EXE TECHNOLOGIES, INC.

 

STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

Amended and Restated Effective April 4, 2002; and

Amended Effective May 30, 2002

 

EXE Technologies, Inc., a Delaware corporation (the “Company”),hereby formulates and adopts the following Stock Option Plan (the “Plan”)for Non-­Employee Directors of the Company.

 

1.             Purpose.  The purpose of the Plan is to secure for theCompany the benefits of the additional incentive inherent in the ownership ofCommon Stock, par value $.0l per share, of the Company (“Common Stock”)by non-employee directors of the Company and to help the Company secure andretain the services of such non-employee directors.

 

2.             Administration. The Plan is intended to be a largely self-­governing formula plan.  To this end, except as provided in Section4, the Plan requires minimal discretionary action by any administrative bodywith regard to any transaction under the Plan. To the extent that questions of administration arise, these shall beresolved by the Board of Directors of the Company (the “Board of Directors”).

 

Subject to theexpress provisions of the Plan, the Board of Directors shall have plenaryauthority to interpret the Plan, to prescribe, amend and rescind the rules andregulations relating to it and to make all other determinations deemednecessary and advisable for the administration of the Plan.  The determination of the Board of Directorsshall be conclusive.

 

3.             Common Stock Subject to Options.  Subject to the adjustment provisions of Section15 below, a maximum of 300,000 shares of Common Stock may be made subject toOptions (as hereinafter defined) granted under the Plan.  If, and to the extent that, Options grantedunder the Plan shall terminate, expire or be canceled for any reason withouthaving been exercised, new Options may be granted in respect of the sharescovered by such terminated, expired or canceled Options.  The granting and terms of such new Optionsshall comply in all respects with the provisions of the Plan.

 

Shares sold upon theexercise of any Option granted under the Plan may be shares of authorized andunissued Common Stock, shares of issued Common Stock held in the Company’streasury or both.

 

There shall be reserved atall times for sale under the Plan a number of shares, of either authorized andunissued shares of Common Stock or shares of Common Stock held in the Company’streasury, or both, equal to the maximum number of shares that may be purchasedpursuant to Options granted or that may be granted under the Plan.

 

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4.             Grant of Options.

 

(a)           Initial Awards. Each person who is first elected, appointed or otherwise first becomesan “Eligible Director” (as defined in Section 5) after the EffectiveDate (as defined in Section 19) shall receive an Option to purchase 25,000shares of Common Stock as of the date on which such person first becomes anEligible Director (“Initial Options”).

 

(b)           Special One-Time Award.  Each person who is an Eligible Director as of the Effective Dateshall receive an Option to purchase 25,000 shares of Common Stock as of theEffective Date (“Special Options”).

 

(c)           Subsequent Awards. Each Eligible Director who is re-elected, shall, effective as of thefirst day of such Eligible Director’s new three-year term, receive an Option topurchase 25,000 shares of Common Stock for service as a director of the Company(“Subsequent Options”); provided that, if a re-elected EligibleDirector’s term is for one year, such Eligible Director shall receiveSubsequent Options only on the third anniversary of his initial election, and,if re-elected, every three years thereafter; provided further, that if theCompany institutes three-year terms for directors and this causes an EligibleDirector to be eligible for Subsequent Options prior to the expiration of threeyears from a prior grant of Initial Options or Subsequent Options, the Board ofDirectors shall make equitable adjustments in the granting schedule ofSubsequent Options as it deems appropriate in its sole discretion.

 

(d)           Discretionary Awards.  In addition to Initial Options, Special Options and SubsequentOptions, the Board of Directors may, in its sole discretion, award additionalOptions (“Discretionary Options”) to Eligible Directors, in amounts andsubject to such vesting conditions as shall be prescribed in an applicableOption Agreement.

 

Initial Options, SpecialOptions, Subsequent Options and Discretionary Options may, individually orcollectively, be referred to as “Options.”

 

(e)           Type of Options. All Options granted under the Plan shall be “nonqualified” stock optionssubject to the provisions of Section 83 of the Internal Revenue Code of 1986,as amended (the “Code”).

 

5.             Individuals Eligible.  Only directors of the Company who are not employees of theCompany (“Eligible Directors”) shall participate in the Plan.  A director receiving an Option pursuant tothe Plan may hereinafter be referred to as an “Optionee.”

 

6.             Price.

 

(a)           The option price of each share of Common Stock purchasableunder any Option granted pursuant to the Plan shall be no less than the FairMarket Value (as defined below) thereof at the time the Option is granted.

 

(b)           For purposes of the Plan, “Fair Market Value” of ashare of Common Stock shall mean:

 

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(i)            If the shares of Common Stock are listed on a national orregional securities exchange or traded through NASDAQ/NMS, then the Fair MarketValue of a share of Common Stock shall be the closing price for a share ofCommon Stock on the exchange or on NASDAQ/NMS, as reported in The WallStreet Journal or such other source as the Board of Directors deemsreliable on the relevant valuation date, or if there is no trading on thatdate, on the next trading date.

 

(ii)           If the shares of Common Stock are traded in the over-the-countermarket, then the Fair Market Value of a share of Common Stock shall be the meanof the bid and asked prices for a share of Common Stock on the relevantvaluation date as reported in The Wall Street Journal or other sourcethe Board of Directors deems reliable (or, if not so reported, as otherwisereported by the National Association of Securities Dealers Automated Quotations(“NASDAQ”) System or the NASD OTC Bulletin Board), or if there is notrading on such date, on the next trading date.

 

(iii)          In the absence of an established market for the CommonStock, the Fair Market Value of a share of Common Stock shall be determined bythe Board of Directors in its sole discretion.

 

7.             Vesting andDuration of Options.

 

(a)           Vesting.

 

Unless specified otherwisein an Option Agreement, each Option granted hereunder shall vest and becomeexercisable in 1⁄4 increments on each of the first, second, third and fourthanniversaries of the date such Option is granted; provided that theOptionee is in the service of the Company as a director on such date.  In the event of the termination of theOptionee’s service as a director of the Company prior to the fourth anniversaryof the date such Option is granted, such Option, to the extent not yet vested,shall automatically and without notice terminate and become null and void.

 

(b)           Term of Options.

 

Notwithstanding anyprovision of the Plan to the contrary (other than Section 7(a)), theunexercised portion of any Option granted under the Plan shall automaticallyand without notice terminate and become null and void at the time of theearliest to occur of the following:

 

(i)            The expiration of 10 years from the date on which suchOption was granted;

 

(ii)           The expiration of three (3) months from the date theOptionee’s service with the Company shall terminate for any reason other thandeath or Disability; and

 

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(iii)          The expiration of twelve (12) months from the date theOptionee’s service with the Company terminates due to death or Disability.

 

(iv)          For purposes of this Plan, “Disability” or “Disabled”shall mean (i) when the Optionee is determined to be disabled within themeaning of any long­ term disability policy or program sponsored by the Companycovering the Optionee, as in effect as of the date of such determination, or(ii) if no such policy or program shall be in effect, when the Optionee isunable to engage in any substantial gainful activity by reason of a physical ormental impairment that can be expected to result in death or that has lasted orcan be expected to last for a continuous period of not less than twelve (12)months.  The determination of whether anOptionee is Disabled pursuant to subparagraph (ii) shall be determined by theBoard of Directors, whose determination shall be conclusive.

 

8.             Exercise ofOptions.

 

(a)           An Option granted under the Plan shall be deemed exercisedwhen the person entitled to exercise the Option:

 

(i)            delivers written notice to the Company at its principalbusiness office, directed to the attention of its Corporate Secretary, or tothe Company’s designee of the decision to exercise; and

 

(ii)           concurrently tenders to the Company full payment for theshares to be purchased pursuant to such exercise, accompanied by any agreementsrequired by the Board of Directors or the terms of the Plan and any OptionAgreement.

 

(b)           Payment for shares with respect to which an Option isexercised may be made in any combination of the following: (i) by cash orcertified or official bank check payable to the Company (or the equivalentthereof acceptable to the Board of Directors); (ii) with the consent of theBoard of Directors in its sole discretion, by personal check (subject tocollection) and which may in the Board of Directors’ discretion be deemed conditional;and (iii) by delivery of previously ­acquired shares of Common Stock owned bythe grantee for at least six months (or such longer or shorter period as theBoard of Directors may prescribe that will not result in variable accountingtreatment) having a fair market value (determined as of the option exercisedate) equal to the portion of the option exercise price being paidthereby.  In addition, in the eventthere is a public market for the shares and subject to such rules as may beestablished by the Board of Directors, payment in accordance with clause (a) ofthis Section 8 may be deemed to be satisfied by delivery to the Company of anassignment of a sufficient amount of the proceeds from the sale of Common Stockacquired upon exercise to pay for all of the Common Stock acquired uponexercise and an authorization to the broker or selling agent to pay that amountto the Company, which sale shall be made at the Optionee’s direction at thetime of exercise; provided, however, that the availability ofthis payment method shall be available only if the Board of Directorsdetermines that the accounting treatment that may result does not adverselyimpact the Company.

 

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9.             Nontransferabilityof Options.

 

(a)           Except as providedin Section 9(b), no Option or any right evidenced thereby shall be transferablein any manner other than by will or the laws of descent and distribution, and,during the lifetime of an Optionee, only the Optionee (or the Optionee’s court-appointedlegal representative) may exercise an Option.

 

(b)           Options may betransferred by gift or domestic order to “family members” (as such term isdefined in the General Instructions to Form S-8) of Optionees (which includes,without limitation, entities in which the Optionee own more than 50% of thevoting interests).

 

10.           Power of Board if Change of Control.  Notwithstanding anything to the contrary setforth in this Plan, in the event of a Change of Control (as defined below), theBoard of Directors shall have the right, in its sole discretion, to acceleratethe vesting of all Options that have not vested as of the date of the Change ofControl and/or to establish an earlier date for the expiration of the exerciseof an Option (notwithstanding a later expiration of exercisability set forth inan Option Agreement).  In addition, inthe event of a Change of Control of the Company, the Board of Directors shallhave the right, in its sole discretion, subject to and conditioned upon a Saleof the Company (as defined below): (a) to arrange for the successor company (orother entity) to assume all of the rights and obligations of the Company underthis Plan; or (b) to terminate this Plan and (i) to pay to all Optionees cashwith respect to those Options that are vested as of the date of the Sale of theCompany in an amount equal to the difference between the Option Price and theFair Market Value of a Share of Common Stock (determined as of the date thePlan is terminated) multiplied by the number of Options that are vested as ofthe date of the Sale of the Company which are held by the Optionee as of thedate of the Sale of the Company, or (ii) to arrange for the exchange of allOptions for options to purchase common stock in the successor corporation, or (iii)to distribute to each Optionee other property in an amount equal to and in thesame form as the Optionee would have received from the successor corporation ifthe Optionee had owned the Shares subject to Options that are vested as of thedate of the Sale of the Company rather than the Option at the time of the Saleof the Company.  The form of payment ordistribution to the Optionee pursuant to this Section shall be determined bythe Board of Directors in its sole discretion.

 

For purposes of this Plan, “Change of Control” shall mean thehappening of an event (excluding a public offering) that shall be deemed tohave occurred upon the earliest to occur of the following events: (i) the datethe stockholders of the Company (or the Board, if stockholder action is notrequired) approve a plan or other arrangement pursuant to which the Companywill be dissolved or liquidated; (ii) the date the stockholders of the Company(or the Board, if stockholder action is not required) approve a definitiveagreement to sell or otherwise dispose of all or substantially all of theassets of the Company; (iii) the date the stockholders of the Company (or theBoard, if stockholder action is not required) and the stockholders of the otherconstituent corporations (or their respective boards of directors, if and tothe extent that stockholder action is not required) have approved a definitiveagreement to merge or consolidate the Company with or into another corporation,other than, in either case, a merger or consolidation of the Company in whichholders of shares of the Company’s voting capital stock immediately prior tothe merger or consolidation will have at least fifty percent (50%) of the

 

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ownership of voting capitalstock of the surviving corporation immediately after the merger orconsolidation (on a fully diluted basis), which voting capital stock is to beheld by each such holder in the same or substantially similar proportion (on afully diluted basis) as such holder’s ownership of voting capital stock of theCompany immediately before the merger or consolidation; (iv) the date anyentity, person or group (within the meaning of Section 13(d)(3) or Section14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”)), other than (A) the Company, (B) any of its subsidiaries, (C) any ofthe holders of the capital stock of the Company, as determined on the date thatthis Plan is adopted by the Board, (D) any employee benefit plan (or relatedtrust) sponsored or maintained by the Company or any of its Subsidiaries or (E)any Affiliate of any of the foregoing, shall have acquired beneficial ownershipof, or shall have acquired voting control over more than fifty percent (50%) ofthe outstanding shares of the Company’s voting capital stock (on a fullydiluted basis), unless the transaction pursuant to which such person, entity orgroup acquired such beneficial ownership or control resulted from the originalissuance by the Company of shares of its voting capital stock and was approvedby at least a majority of directors who shall have been members of the Boardfor at least twelve (12) months prior to the date of such approval; (v) thefirst day after the date of this Plan when directors are elected such that thereshall have been a change in the composition of the Board such that a majorityof the Board shall have been members of the Board for less than twelve (12)months, unless the nomination for election of each new director who was not adirector at the beginning of such twelve (12) month period was approved by avote of at least sixty percent (60%) of the directors then still in office whowere directors at the beginning of such period; or (vi) the date upon which theBoard determines (in its sole discretion) that based on then current availableinformation, the events described in clause (iv) are reasonably likely tooccur.

 

“Sale of the Company”shall mean the earliest of: (i) the closing of a sale, transfer or otherdisposition of all or substantially all of the shares of the capital stock thenoutstanding of the Company (except if such transferee is then an Affiliate);(ii) the closing of a sale, transfer or other disposition of all orsubstantially all of the assets of the Company (except if such transferee isthen an Affiliate); or (iii) the merger or consolidation of the Company with orinto another corporation (except an Affiliate), other than a merger orconsolidation of the Company in which the holders of shares of the Company’svoting capital stock outstanding immediately before such merger orconsolidation hold greater than fifty percent (50%) of the surviving entity’svoting capital stock after such consolidation or merger.

 

11.           Forfeiture. Notwithstanding any other provision of this Plan, if an Optionee’sservice with the Company is terminated and the Board of Directors makes adetermination that the Optionee (a) has engaged in any type of disloyalty tothe Company, including without limitation, fraud, embezzlement, theft, ordishonesty in the course of Optionee’s service, (b) has been convicted of afelony or other crime involving a breach of trust or fiduciary duty owed to theCompany, or (c) has made an unauthorized disclosure of trade secrets orconfidential information of the Company then, at the election of the Board ofDirectors, all unexercised Options held by the Optionee (whether or not thenexercisable) shall terminate.  In theevent of such an election by the Board of Directors, in addition to immediatetermination of all unexercised Options, the Optionee shall forfeit all sharesfor which the Company has not yet delivered stock certificates to the Optioneeand the Company shall refund to the Optionee the

 

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exercise price paid to it upon exercise of the Option with respect tosuch shares.  Notwithstanding anythingherein to the contrary, the Company may withhold delivery of stock certificatespending the resolution of any inquiry that could lead to a finding resulting inforfeiture.

 

12.           Rights of Optionee.  Neither the Optionee nor the Optionee’s executor or administratorshall have any of the rights of a stockholder of the Company with respect tothe shares subject to an Option until certificates for such shares shallactually have been issued upon the due exercise of such Option.  Unless the Board of Directors otherwisedetermines in accordance with Section 15 below, no adjustment shall be made forany regular cash dividend for which the record date is prior to the date ofsuch due exercise and full payment for such shares has been made therefore.

 

13.           Right to Terminate Service.  Nothing in the Plan or in any Option shallconfer upon any Optionee the right to continue in the services of the Companyor affect the right of the Company to terminate the Optionee’s service at anytime, subject, however, to the provisions of any agreement between the Companyand the Optionee.

 

14.           Nonalienation of Benefits.  Except as otherwise expressly providedherein, no right or benefit under the Plan shall be subject to anticipation,alienation, sale, assignment, hypothecation, pledge, exchange, transfer,encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,hypothecate, pledge, exchange, transfer, encumber or charge the same shall bevoid.  To the extent permitted byapplicable law, no right or benefit hereunder shall in any manner be liable foror subject to the debts, contracts, liabilities or torts of the person entitledto such benefits.

 

15.           Adjustment Upon Changes in Capitalization, etc.  In the event that the Board of Directorsdetermines that any dividend or other distribution (whether in the form ofcash, shares of Common Stock, other securities, or other property),recapitalization, stock split, reverse stock split, reorganization, merger,consolidation, split-up, spin-off, combination, repurchase, or exchange ofshares of Common Stock or other securities of the Company, issuance of warrantsor other rights to purchase shares of Common Stock or other securities of theCompany, or other similar corporate transaction or event affects the shares ofCommon Stock such that an adjustment is determined by the Board of Directors inits discretion to be appropriate in order to prevent dilution or enlargement ofthe benefits or potential benefits intended to be made available under thePlan, then the Board of Directors shall, in such manner as it may deemequitable, adjust any or all of (i) the number of shares of Common Stock orother securities of the Company (or number and kind of other securities orproperty) with respect to which Options may be granted, including the amountsspecified in Section 4, (ii) the number of shares of Common Stock or othersecurities of the Company (or number and kind of other securities or property)subject to outstanding Options, and (iii) the grant or exercise price withrespect to any Option or, if deemed appropriate, make provision for a cashpayment to the holder of an outstanding Option in consideration for thecancellation of such Option.

 

16.           Form of Agreements with Optionees.  Each Option granted pursuant to the Planshall be evidenced by an individual agreement (“Option Agreement”) inwriting and shall have

 

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such form, terms and provisions, not inconsistent with the provisionsof the Plan, as the Board of Directors shall provide for such Option.  In the event that any provisions of anOption Agreement differ from the terms of the Plan, the Plan provisions shallgovern.  Upon exercise of an Option, theBoard of Directors may, from time to time, require the Optionee to signagreements in connection with the Option as it, in its sole discretion, deemsadvisable.  The Option Agreement and anyother agreement required by the Plan or the Option Agreement, as determined bythe Board of Directors, may contain such other provisions of this Plan,including, without limitation, restrictions upon or conditions precedent to theexercise of the Option.

 

17.           Purchase for Investment.  Whether or not the Options and shares covered by the Plan havebeen registered under the Securities Act of 1933, as amended, each personexercising an Option under the Plan may be required by the Company to give arepresentation in writing that such person is acquiring such shares for investmentand not with a view to, or in connection with, the sale, transfer ordistribution of any part thereof.  TheCompany will endorse any necessary legend referring to the foregoingrestriction upon the certificate or certificates representing any shares issuedor transferred to the Optionee upon the exercise of any Option granted underthe Plan.

 

18.           Termination and Amendment of Plan and Options.

 

(a)           Unless the Plan shall theretofore have been terminated ashereinafter provided, Options may be granted under the Plan, as provided inSection 4 hereof, prior to the tenth anniversary of the Effective Date on whichdate the Plan will expire, except as to Options then outstanding under thePlan.  Such Options shall remain ineffect until they have been exercised, have expired or have been canceled.

 

(b)           The Plan may be terminated or amended at any time by theBoard of Directors; provided, however, that (i) any suchamendment shall comply with all applicable laws and applicable stock exchangelisting requirements and (ii) any amendment for which stockholder approval isnecessary to comply with any tax or regulatory requirement shall not beeffective until such approval has been obtained.

 

(c)           No termination, modification or amendment of the Plan,without the consent of the Optionee, may adversely affect the rights of suchperson with respect to any Option previously granted under the Plan.

 

19.           Effective Date of Plan.  The Plan shall become effective upon approval of the Plan by theBoard of Directors (the “Effective Date”).

 

20.           Government and Other Regulations.  The obligation of the Company with respectto Options granted under the Plan shall be subject to all applicable laws,rules and regulations and such approvals by any governmental agency as may berequired, including, without limitation, the effectiveness of any registrationstatement required under the Securities Act of 1933, as amended, and the rulesand regulations of any securities exchange on which the Common Stock may belisted.

 

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21.           Withholding. The Company’s obligation to deliver shares of Common Stock in respect ofany Option granted under the Plan shall be subject to any applicable federal,state and local tax withholding requirements. Federal, state and local withholding tax, if any, due upon the exerciseof any Option, may be paid in shares of Common Stock (including the withholdingof shares subject to an Option), provided, however, that the total taxwithholding where stock is being used to satisfy such tax obligations cannotexceed the Company’s minimum statutory withholding obligations (based onminimum statutory withholding rates for federal and state tax purposes,including payroll taxes, that are applicable to such supplemental taxable income).

 

22.           Separability. If any part of the Plan is declared by any court or governmentalauthority to be unlawful or invalid, such unlawfulness or invalidity shall notinvalidate any portion of the Plan not declared to be unlawful or invalid.  Any Section or part of a Section so declaredto be unlawful or invalid shall, if possible, be construed in a manner whichwill give effect to the terms of such Section or part of a Section to thefullest extent possible while remaining lawful and valid.

 

23.           Non-Exclusivity of the Plan.  Neither the adoption of the Plan by theBoard of Directors nor the submission of the Plan to the stockholders of theCompany for approval shall be construed as creating any limitation on the powerof the Board of Directors to adopt such other incentive arrangements as it maydeem desirable, including, without limitation, the granting of stock optionsand the awarding of stock and cash otherwise than under the Plan, and sucharrangements may be either generally applicable or applicable only in specificcases.

 

24.           Exclusion from Pension and Profit-Sharing Computation.  By acceptance of an Option, each Optioneeshall be deemed to have agreed that such grant is special incentivecompensation that will not be taken into account, in any manner, as salary,compensation or bonus in determining the amount of any payment under anypension, retirement or other employee benefit plan of the Company or any of itsaffiliates.  In addition, such Optionwill not affect the amount of any life insurance coverage, if any, provided bythe Company on the life of the Optionee.

 

25.           Governing Law. The Plan shall be governed by, and construed in accordance with, thelaws of the State of Delaware.

 

AMENDMENT NO. 1 TO THE

EXE TECHNOLOGIES, INC.

STOCK OPTION PLAN FORNON-EMPLOYEE DIRECTORS

 

Section 3 of the EXETechnologies, Inc. Stock Option Plan for Non-Employee Directors (the “Plan”) ishereby amended to increase the number of shares of Common Stock available forissuance thereunder from 300,000 shares to 600,000 shares.

 

Adopted by the Board ofDirectors

on April 4, 2002

Adopted by the Stockholders

on May 30, 2002

 

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