Document:

<PAGE>
                                                                  EXHIBIT 10.28

===============================================================================

                               EXCHANGE AGREEMENT

                                  BY AND AMONG

                      FELCOR LODGING LIMITED PARTNERSHIP,
                        a Delaware limited partnership,

                       FELCOR LODGING TRUST INCORPORATED,
                             a Maryland corporation

                                      AND

                     SIX CONTINENTS HOTELS OPERATING CORP.
                             a Delaware corporation

===============================================================================

<PAGE>

                               TABLE OF CONTENTS
<Table>
<S>                                                                        <C>
ARTICLE I.
         The Exchange......................................................  -1-
         1.1        Transfer of Exchanged Units............................  -1-
         1.2        Issuance of Exchanged Shares...........................  -2-
         1.3        Consent and Waiver of the Company and FLLP.............  -2-
         1.4        Registration Rights....................................  -2-
         1.5        Additional Covenants...................................  -2-

ARTICLE II.
         Representations and Warranties....................................  -3-
         2.1        Representations by the Company and FLLP................  -3-
         2.2        Representations by the Holder..........................  -4-

ARTICLE III.
         Conditions Precedent to the Closing of the Company and FLLP.......  -6-
         3.1        Holder's Obligations...................................  -6-
         3.2        Holder's Representations and Warranties................  -6-

ARTICLE IV.
         Conditions Precedent to the Closing of the Holder.................  -6-
         4.1        The Company's and FLLP's Obligations...................  -7-
         4.2        Representations and Warranties of the
                     Company and FLLP......................................  -7-

ARTICLE V.
         Closing and Closing Documents.....................................  -7-
         5.1        Closing................................................  -7-
         5.2        Holder's Deliveries....................................  -7-
         5.3        The Company's Deliveries...............................  -7-

ARTICLE VI.
         Miscellaneous.....................................................  -7-
         6.1        Notices................................................  -7-
         6.2        Entire Agreement; Modifications and Waivers;
                     Cumulative Remedies...................................  -9-
         6.3        Exhibits...............................................  -9-
         6.4        Successors and Assigns.................................  -9-
         6.5        Article Headings.......................................  -9-
         6.6        Governing Law..........................................  -9-
         6.7        Time Periods........................................... -10-
         6.8        Counterparts........................................... -10-
         6.9        Survival............................................... -10-
         6.10       Further Acts........................................... -10-
         6.11       Severability........................................... -10-
         6.12       Attorneys' Fees........................................ -10-
</Table>

                                       -i-

<PAGE>

                               EXCHANGE AGREEMENT

         THIS EXCHANGE AGREEMENT (this "Agreement") is made as of October 1,
2002 by and among FelCor Lodging Limited Partnership, a Delaware limited
partnership ("FLLP"), FelCor Lodging Trust Incorporated, a Maryland corporation
and the sole general partner of FLLP (the "Company"), and Six Continents Hotels
Operating Corp., a Delaware corporation (the "Holder").

                                    RECITALS:

         A. The Holder, as successor in interest to SixCo America, Inc. (f/k/a
Bass America, Inc.), is the Assignee (as such term is defined in the
Partnership Agreement) of 5,713,185 units of limited partnership interest
("Units") of FLLP (the "Exchanged Units").

         B. The Holder desires to exchange the Exchanged Units with the Company
for 5,713,185 newly issued shares of common stock, par value $0.01 per share
("Common Stock") of the Company (the "Exchanged Shares") and the Company
desires to issue to the Holder the Exchanged Shares in exchange for the
Exchanged Units, in each case on the terms and conditions hereinafter set
forth.

         C. The Holder, as successor in interest to SixCo America, Inc. (f/k/a
Bass America, Inc.), has agreed to be bound by all the provisions of that
certain Stockholders' and Registration Rights Agreement dated July 28, 1998
(the "Stockholders Agreement").

         D. The Company and certain other persons are parties to that certain
Second Amended and Restated Agreement of Limited Partnership for FLLP dated as
of December 31, 2001, as amended to date (the "Partnership Agreement").

                                   AGREEMENT:

         NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:

                                   ARTICLE I.
                                  The Exchange

         1.1 Transfer of Exchanged Units. Holder agrees to transfer and assign
the Exchanged Units to the Company and the Company agrees to accept such
transfer and assignment of the Exchanged Units pursuant to the terms and
conditions set forth in this Agreement. The Exchanged Units shall be
transferred to the Company at Closing (as defined below) free and clear of all
liens, encumbrances, security interests, prior assignments or conveyances,
conditions, restrictions (including any restriction on the right to vote, sell,
or otherwise dispose of such securities), claims and other matters affecting
title and voting rights ("Liens"), other than restrictions set forth in the
Partnership Agreement.

                                       -1-

<PAGE>

         1.2 Issuance of Exchanged Shares. In consideration of the transfer and
assignment of the Exchanged Units from the Holder, the Company agrees to issue
the Exchanged Shares to the Holder and the Holder hereby agrees to accept the
issuance of the Exchanged Shares, pursuant to the terms and conditions set
forth in this Agreement. The Exchanged Shares shall be issued to the Holder at
Closing free and clear of all Liens, other than restrictions set forth in the
Stockholders Agreement or the Articles of Amendment and Restatement, as amended
to date, of the Company (the "Company Charter").

         1.3 Consent and Waiver of the Company and FLLP. (a) FLLP hereby
expressly consents to the transfer of the Exchanged Units as contemplated by
this Agreement and irrevocably waives any and all rights under the Partnership
Agreement or the Stockholders Agreement to object to or to fail to recognize or
give effect to such transfer.

                  (b) The Company hereby expressly consents to the transfer of
the Exchanged Units as contemplated by this Agreement and irrevocably waives
any and all rights under the Partnership Agreement or the Stockholders
Agreement to object to or to fail to recognize or give effect to such transfer.

         1.4 Registration Rights. The Company shall file with the Securities
and Exchange Commission (the "SEC") (i) a registration statement under Rule 415
promulgated under the Securities Act of 1933, as amended (or any similar rule
or regulation promulgated hereafter by the SEC), or (ii) an amendment to the
existing registration statement (File No. 333-51588), with respect the resale
of the Exchanged Shares, and use its reasonable best efforts to cause the same
to become effective not later than six months following the Closing Date. In
addition, (i) the Holder and its Permitted Transferees (as defined in the
Stockholders Agreement) shall have the rights (other than with respect to the
filing of a registration statement), and be subject to the limitations, set
forth in the Stockholders Agreement, and (ii) the Exchanged Shares shall be
deemed "Registrable Securities" for purposes of the Stockholders Agreement;
provided, however, that upon presentation of reasonably acceptable
documentation, the Holder shall pay, or reimburse the Company for, all expenses
reasonably and necessarily incurred by it, up to a maximum of $20,000.00, in
the fulfillment of its obligations under the first sentence of this Section 1.4

         1.5 Additional Covenants. The Company hereby covenants and agrees
that, in its capacity as general partner of FLLP:

                  (a) for a period of two years after the Closing Date it shall
not take any action to cause or permit FLLP to distribute or otherwise transfer
any shares of Common Stock owned by FLLP to the Company; and

                  (b) pursuant to Section 4.5(f) of the Partnership Agreement,
it shall cause the allocations contained in Article V of the Partnership
Agreement to be applied to reflect the varying interests of SixCo America, Inc.
and the Company during the year in which the exchange contemplated by Article I
hereof occurs by allocating items attributable to the Exchanged Units for

                                       -2-

<PAGE>

such year between SixCo America, Inc. and the Company in accordance with FLLP's
usual and customary method for allocating income between a holder of Units that
redeems such Units and the Company.

                                  ARTICLE II.
                         Representations and Warranties

         2.1 Representations by the Company and FLLP. The Company and FLLP
hereby represent and warrant unto the Holder that each and every one of the
following statements is true, correct and complete in every material respect as
of the date of this Agreement and will be true, correct and complete as of the
Closing Date:

                  (a) The Company is duly organized, validly existing and in
good standing under the laws of the State of Maryland, and has full right,
power and authority to enter into this Agreement and to assume and perform all
of its obligations under this Agreement; that the execution and delivery of
this Agreement and the performance by the Company of its obligations under this
Agreement (including, without limitation, the issuance of the Exchanged Shares
to the Holder) have been approved by the Board of Directors of the Company and
require no further action or approval of its directors or shareholders or of
any other individuals or entities in order to constitute this Agreement as a
binding and enforceable obligation of the Company.

                  (b) FLLP is duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has full right, power and
authority to enter into this Agreement and to assume and perform all of its
obligations under this Agreement; that the execution and delivery of this
Agreement and the performance by FLLP of its obligations under this Agreement
have been approved by its general partner and require no further action or
approval by FLLP's partners or of any other individuals or entities in order to
constitute this Agreement as a binding and enforceable obligation of FLLP.

                  (c) Neither the entry into nor the performance of, or
compliance with, this Agreement by either the Company or FLLP has resulted, or
will result, in any violation of, or default under, or result in the
acceleration of, any obligation under any existing corporate charter, articles
of incorporation, bylaws, certificate of limited partnership, partnership
agreement, mortgage, indenture, loan agreement, note, contract, permit,
judgment, decree, order, restrictive covenant, statute, rule or regulation
applicable to the Company or FLLP, except to the extent waived by the Company
as described in subparagraph (h) below.

                  (d) The Company is acquiring the Exchanged Units for its own
account and not with a view to the distribution thereof within the meaning of
Section 2(11) of the Securities Act of 1933, as amended.

                                       -3-

<PAGE>

                  (e) The Exchanged Shares, when issued, will have been duly
and validly authorized and issued, free of any preemptive or similar rights,
and will be fully paid and nonassessable. The Exchanged Shares will be issued
to Holder free and clear of all Liens, other than restrictions set forth in the
Stockholders Agreement or the Company Charter.

                  (f) No authorization, consent, approval, permit or license
of, or filing with any governmental or public body or authority, or any other
person or entity is required to authorize, or is required in connection with,
the execution, delivery and performance of this Agreement (including, without
limitation, the issuance of the Exchanged Shares to the Holder by the Company)
on the part of the Company or FLLP.

                  (g) The issuance, sale and delivery by the Company of the
Exchanged Shares, will not conflict with or result in a breach or violation of
any of the terms and provisions of, or (with or without the giving of notice or
passage of time or both) constitute a default under the articles of
incorporation or bylaws of the Company or the certificate of limited
partnership or the Partnership Agreement, except to the extent waived by the
Company as described in subparagraph (h) below; any indenture, mortgage, deed
of trust, loan agreement, note, lease or other agreement or instrument to which
the Company or FLLP is a party or to which any of them, any of their respective
properties or other assets or any hotel is subject; or any applicable statute,
judgment, decree, rule or regulation of any court or governmental agency or
body applicable to any of the foregoing or any of their respective properties;
or result in the creation or imposition of any Lien, upon any property or asset
of the Company or FLLP.

                  (h) The Company has taken all action necessary to render
Sections D.(2)(a) and (b) and D.(3)(a) of Article V of the Company Charter
inapplicable to (i) the issuance and transfer of the Exchanged Shares to the
Holder, (ii) any transfer of shares of Common Stock by the Holder to any
Affiliate (as defined in the Stockholders Agreement) of the Holder, and (iii)
the ownership by the Holder and its Affiliates, in the aggregate, of the
greater of (A) 10,032,428 shares of Common Stock, and (B) shares of Common
Stock representing 18% of the outstanding shares of Common Stock at any time.

                  (i) The Company and all of its controlled subsidiaries and
affiliates do not hold assets with an aggregate fair market value of more than
$50 million, except for assets that are exempt from the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 pursuant to 16 C.F.R. Sections 802.2, 802.3
or 802.5. For purposes of this section, "control" has meaning ascribed to it in
16 C.F.R. Section 801.1(b).

         2.2 Representations by the Holder. The Holder hereby represents and
warrants unto the Company and FLLP that each and every one of the following
statements is true, correct and complete in every material respect as of the
date of this Agreement and will be true, correct and complete as of the Closing
Date:

                                       -4-

<PAGE>

                  (a) The Holder is duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has full right,
power and authority to enter into this Agreement and to assume and perform all
of its obligations under this Agreement; that the execution and delivery of
this Agreement and the performance by the Holder of its obligations under this
Agreement have been approved by the Board of Directors of the Holder and
require no further action or approval of the Holder's directors or shareholders
or of any other individuals or entities in order to constitute this Agreement
as a binding and enforceable obligation of the Holder.

                  (b) Neither the entry into nor the performance of, or
compliance with, this Agreement by the Holder has resulted, or will result, in
any violation of, or default under, or result in the acceleration of, any
obligation under any existing corporate charter, certificate of incorporation,
bylaw, mortgage indenture, loan agreement, note, contract, permit, judgment,
decree, order, restrictive covenant, statute, rule or regulation applicable to
the Holder.

                  (c) (i) The Holder, as Assignee (as defined in the
Partnership Agreement), is the sole owner of the Exchanged Units, (ii) the
Exchanged Units are free and clear of all Liens, other than restrictions set
forth in the Partnership Agreement, and (iii) the Holder has not granted any
other person or entity an option to purchase or a right of first refusal upon
the Exchanged Units.

                  (d) Assuming the representation and warranty set forth in
Section 2.1(i) is true and correct, no authorization, consent, approval, permit
or license of, or filing with, any governmental or public body or authority, or
any other person or entity is required to authorize, or is required in
connection with, the execution, delivery and performance of this Agreement or
the agreements contemplated hereby on the part of the Holder, other than for
purposes of the Stockholders Agreement, the approval of the Board of Directors
of the Company of the transactions contemplated by this Agreement.

                  (e) The Holder is familiar with the business and financial
condition of the Company, and is not relying upon any representations made to
it by the Company or any of its officers, employees or agents that are not
contained or referred to herein.

                  (f) The Holder is aware of the risks involved in making an
investment in the Common Stock. The Holder has had an opportunity to ask
questions of, and to receive answers from, the Company or a person or persons
authorized to act on their behalf, concerning the terms and conditions of the
investment in the Common Stock contemplated hereby and the financial condition,
affairs and business of the Company. The Holder confirms that all documents,
records and information pertaining to the investment in the Common Stock
contemplated hereby that have been requested by it have been made available or
delivered to it prior to the date hereof.

                  (g) The Holder understands that the Exchanged Shares have not
been registered under the Securities Act of 1933, as amended, or any state
securities acts and are instead being offered and sold in reliance on an
exemption from such registration requirements. The Exchanged Shares are being
acquired by Holder solely for its own account, for investment, and are not
being

                                       -5-

<PAGE>

acquired with a view to, or for resale in connection with, any distribution,
subdivision or fractionalization thereof, in violation of such laws, and except
as previously disclosed to the Company, Holder has no present intention to
enter into any contract, undertaking, agreement or arrangement with respect to
any such resale. Holder understands that the Exchanged Shares will contain
appropriate legends reflecting the requirement that the Exchanged Shares not be
resold by Holder without registration under such laws or the availability of an
exemption from such registration.

                  (h) The Holder is an accredited investor as that term is
defined in Rule 501 of Regulation D of the SEC.

                  (i) The Holder has obtained from its own counsel advice
regarding the tax consequences of the exchange of the Exchanged Units for the
Exchanged Shares. The Holder further represents and warrants that it has not
relied on the Company, FLLP, or their representatives or counsel for such tax
advice.

                                  ARTICLE III.
           Conditions Precedent to the Closing of the Company and FLLP

         In addition to any other conditions set forth in this Agreement, the
Company's and FLLP's obligations to consummate the Closing are subject to the
timely satisfaction of each and every one of the conditions and requirements
set forth in this Article III, all of which shall be conditions precedent to
the Company's and FLLP's obligations under this Agreement.

         3.1 Holder's Obligations. The Holder shall have performed all
obligations of Holder hereunder which are to be performed prior to Closing.

         3.2 Holder's Representations and Warranties. The Holder's
representations and warranties set forth in Section 2.2 shall be true and
correct in all material respects as if made again on the Closing Date.

                                  ARTICLE IV.
               Conditions Precedent to the Closing of the Holder

         In addition to any other conditions set forth in this Agreement, the
Holder's obligations to consummate the Closing is subject to the timely
satisfaction of each and every one of the conditions and requirements set forth
in this Article IV, all of which shall be conditions precedent to the Holder's
obligations under this Agreement.

                                       -6-

<PAGE>

         4.1 The Company's and FLLP's Obligations. The Company and FLLP shall
have performed all obligations of the Company and FLLP, respectively, hereunder
which are to be performed prior to Closing.

         4.2 Representations and Warranties of the Company and FLLP. The
Company's and FLLP's representations and warranties set forth in Section 2.1
shall be true and correct in all material respects as if made again on the
Closing Date.

                                   ARTICLE V.
                         Closing and Closing Documents

         5.1 Closing. The consummation and closing (the "Closing") of the
transactions contemplated under this Agreement shall take place at the offices
of the Holder in Atlanta, Georgia, or such other place as is mutually agreeable
to the parties, at 12:00 noon on October 1, 2002 (the "Closing Date"), or as
otherwise set by agreement of the parties.

         5.2 Holder's Deliveries. At the Closing and at the Holder's sole cost
and expense, the Holder shall deliver the following to the Company in addition
to all other items required to be delivered to the Company by the Holder:

                  (a) Certificate for Contributed Assets. Certificate(s)
representing the Exchanged Units, duly endorsed for transfer.

                  (b) Authority Documents. Evidence satisfactory to the Company
that the person or persons executing the closing documents on behalf of the
Holder have full right, power and authority to do so.

         5.3 The Company's Deliveries. At the Closing, and at the Company's
sole cost and expense, the Company shall deliver the following to the Holder:

                  (a) Certificate for Exchanged Shares. A certificate duly
issued by the Company in the name of the Holder as of the Closing Date
representing the Exchanged Shares.

                  (b) Authority Documents. Evidence satisfactory to the Holder
that the person or persons executing the closing documents on behalf of the
Company have full right, power and authority to do so.

                                  ARTICLE VI.
                                 Miscellaneous

         6.1 Notices. Any notice provided for by this Agreement and any other
notice, demand or communication which any party may wish to send to another
shall be in writing and either

                                       -7-

<PAGE>

delivered in person (including by confirmed facsimile transmission) or sent by
registered or certified mail or overnight courier, return receipt requested, in
a sealed envelope, postage prepaid, and addressed to the party for which such
notice, demand or communication is intended at such party's address as set
forth in this Section. The Company and FLLP's address for all purposes under
this Agreement shall be the following:

                  c/o FelCor Lodging Trust Incorporated
                  545 E. John Carpenter Frwy., Suite 1300
                  Irving, Texas 75062
                  Attention: General Counsel
                  Fax No. (972) 444-4949

         with a copy to:

                  Jenkens & Gilchrist, P.C.
                  1445 Ross Ave., Suite 3200
                  Dallas, Texas  75202-2799
                  Attention: Robert W. Dockery
                  Fax No. (214) 855-4300

The Holder's address for all purposes under this Agreement shall be the
following:

                  Six Continents Hotels Operating Corp.
                  Three Ravinia Drive
                  Suite 100
                  Atlanta, Georgia 30346-2149
                  Attention: General Counsel
                  Fax No. (770) 604-8551

         with a copy to:

                  Six Continents Hotels, Inc.
                  Three Ravinia Drive
                  Suite 100
                  Atlanta, Georgia 30346-2149
                  Attention: Vice President-Tax
                  Fax No. (770) 604-2090

         with a further copy to:

                  Davis Polk & Wardwell
                  450 Lexington Avenue
                  New York, New York 10017

                                       -8-

<PAGE>

                  Attention: Michael Mollerus
                  Fax No. (212) 450-4800

Any address or name specified above may be changed by a notice given by the
addressee to the other parties. Any notice, demand or other communication shall
be deemed given and effective as of the date of delivery in person or receipt
set forth on the return receipt. The inability to deliver because of changed
address of which no notice was given, or rejection or other refusal to accept
any notice, demand or other communication, shall be deemed to be receipt of the
notice, demand or other communication as of the date of such attempt to deliver
or rejection or refusal to accept.

         6.2 Entire Agreement; Modifications and Waivers; Cumulative Remedies.
This Agreement supersedes any existing letter of intent between the parties,
constitutes the entire agreement among the parties hereto and may not be
modified or amended except by instrument in writing signed by the parties
hereto, and no provisions or conditions may be waived other than by a writing
signed by the party waiving such provisions or conditions. No delay or omission
in the exercise of any right or remedy accruing to the Company, FLLP or the
Holder upon any breach under this Agreement shall impair such right or remedy
or be construed as a waiver of any such breach theretofore or thereafter
occurring. The waiver by the Company, FLLP or the Holder of any breach of any
term, covenant or condition herein stated shall not be deemed to be a waiver of
any other breach, or of a subsequent breach of the same or any other term,
covenant or condition herein contained. All rights, powers, options or remedies
afforded to the Company, FLLP or the Holder either hereunder or by law shall be
cumulative and not alternative, and the exercise of one right, power, option or
remedy shall not bar other rights, powers, options or remedies allowed herein
or by law, unless expressly provided to the contrary herein.

         6.3 Exhibits. All exhibits referred to in this Agreement and attached
hereto are hereby incorporated in this Agreement by reference.

         6.4 Successors and Assigns. Except as set forth in this Article, this
Agreement may not be assigned by the Company, FLLP or the Holder without the
prior approval of the other parties hereto. This Agreement shall be binding
upon, and inure to the benefit of, the Company, FLLP and the Holder and their
respective legal representatives, successors, and permitted assigns. The rights
and obligations of the Holder under Section 1.4 hereof may be assigned by the
Holder to any Permitted Transferee of the Exchanged Shares.

         6.5 Article Headings. Article headings and article and section numbers
are inserted herein only as a matter of convenience and in no way define, limit
or prescribe the scope or intent of this Agreement or any part hereof and shall
not be considered in interpreting or construing this Agreement.

         6.6 Governing Law. This Agreement shall be construed and interpreted
in accordance with the laws of the State of Delaware.

                                       -9-

<PAGE>

         6.7 Time Periods. If the final day of any time period or limitation
set out in any provision of this Agreement falls on a Saturday, Sunday or legal
holiday under the laws of the State of Delaware, or the federal government,
then and in such event the time of such period shall be extended to the next
day which is not a Saturday, Sunday or legal holiday.

         6.8 Counterparts. This Agreement may be executed in any number of
counterparts and by any party hereto on a separate counterpart, each of which
when so executed and delivered shall be deemed an original and all of which
taken together shall constitute but one and the same instrument. A facsimile
copy of a signature page shall be deemed to be an original signature page.

         6.9 Survival. All covenants and agreements contained in the Agreement
which contemplate performance after the Closing Date shall survive the Closing,
and all representations, warranties and indemnities contained in this Agreement
shall expressly survive the Closing for a period of three (3) years.

         6.10 Further Acts. In addition to the acts, instruments and agreements
recited herein and contemplated to be performed, executed and delivered by
FLLP, the Company and the Holder, FLLP, the Company and the Holder shall
perform, execute and deliver or cause to be performed, executed and delivered
at the Closing or after the Closing, any and all further acts, instruments and
agreements and provide such further assurances as the other parties may
reasonably require to consummate the transaction contemplated hereunder.

         6.11 Severability. In case any one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.

         6.12 Attorneys' Fees. Should either party employ an attorney or
attorneys to enforce any of the provisions hereof or to protect its interest in
any manner arising under this Agreement, or to recover damages for breach of
this Agreement, the non-prevailing party in any action pursued in a court of
competent jurisdiction (the finality of which is not legally contested) agrees
to pay to the prevailing party all reasonable costs, damages, and expenses,
including attorneys' fees, expended or incurred in connection therewith.

                                      -10-

<PAGE>

         IN WITNESS WHEREOF, this Agreement has been entered into effective as
of the date first written above.

                              FLLP:

                              FELCOR LODGING LIMITED PARTNERSHIP,
                              a Delaware limited partnership

                              By:  FelCor Lodging Trust Incorporated, a Maryland
                                   corporation, its sole general partner

                              By:   /s/ LAWRENCE D. ROBINSON
                                  ----------------------------------------
                                   Name: Lawrence D. Robinson
                                   Title: Executive Vice President &
                                            General Counsel

                              THE COMPANY:

                              FELCOR LODGING TRUST INCORPORATED,
                              a Maryland corporation

                              By:   /s/ LAWRENCE D. ROBINSON
                                   ---------------------------------------
                                   Name: Lawrence D. Robinson
                                   Title: Executive Vice President &
                                            General Counsel

                              THE HOLDER:

                              SIX CONTINENTS HOTELS OPERATING CORP.,
                              a Delaware corporation

                              By:     /s/ ROBERT J. CHITTY
                                   ---------------------------------------
                                   Name:    Robert J. Chitty
                                   Title:   Vice President

                                     -11-EXE Technologies, Inc.

 

EXHIBIT 10.1

EXE TECHNOLOGIES, INC.

1997 INCENTIVE AND NON-QUALIFIED

STOCK OPTION PLAN

As Amended and Restated February 6, 2001

As Amended May 30, 2002

and

August 6, 2002

 

 

EXE TECHNOLOGIES, INC.

1997 INCENTIVE AND NON-QUALIFIED

STOCK OPTION PLAN

     Section 1. Name and Purposes of the Plan.

     (a)  Name. The Plan will be known as the EXE Technologies, Inc. 1997
Incentive and Non-Qualified Stock Option Plan.

     (b)  Purposes. The purpose of the Plan is to provide key Employees and
Consultants with an opportunity to share in the capital appreciation of the
Common Stock of the Company. The Options granted pursuant to the Plan are
intended to constitute either Incentive Stock Options or Non-Qualified Stock
Options, as determined by the Administrator of the Plan at the time of grant.

     Section 2. Definitions. As used herein, the following definitions shall
apply:

     (a)  “Administrator” shall be the Board or a Committee appointed by the
Board pursuant to Section 3 of the Plan, which shall administer the Plan.

     (b)  “Affiliate” shall mean, whether now or hereafter existing, a person or
entity that directly, or indirectly controls or is controlled by, or is under
common control with, the Company, except that when used in connection with an
Incentive Stock Option, “Affiliate” shall mean a Subsidiary.

     (c)  “Board” shall mean the Board of Directors of the Company, as
constituted from time to time.

     (d)  “Change of Control” shall mean the happening of an event (excluding a
Public Offering) that shall be deemed to have occurred upon the earliest to
occur of the following events:

          (i) the date the stockholders of the Company (or the Board, if stockholder
action is not required) approve a plan or other arrangement pursuant to which
the Company will be dissolved or liquidated;

          (ii) the date the stockholders of the Company (or the Board, if
stockholder action is not required) approve a definitive agreement to sell or
otherwise dispose of all or substantially all of the assets of the Company;

          (iii) the date the stockholders of the Company (or the Board, if
stockholder action is not required) and the stockholders of the other
constituent corporations (or their respective boards of directors, if and to
the extent that stockholder action is not required) have approved a definitive
agreement to merge or consolidate the Company with or into another corporation,
other than, in either case, a merger or consolidation of the Company in which
holders of shares of the Company’s voting capital stock immediately prior to
the merger or

 

 

consolidation will have at least fifty percent (50%) of the ownership of voting
capital stock of the surviving corporation immediately after the merger or
consolidation (on a fully diluted basis), which voting capital stock is to be
held by each such holder in the same or substantially similar proportion (on a
fully diluted basis) as such holder’s ownership of voting capital stock of the
Company immediately before the merger or consolidation;

          (iv) the date any entity, person or group (within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Exchange Act), other than (A) the Company,
(B) any of its Subsidiaries, (C) any of the holders of the capital stock of the
Company, as determined on the date that this Plan is adopted by the Board, (D)
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its Subsidiaries or (E) any Affiliate of any of the
foregoing, shall have acquired beneficial ownership of, or shall have acquired
voting control over more than fifty percent (50%) of the outstanding shares of
the Company’s voting capital stock (on a fully diluted basis), unless the
transaction pursuant to which such person, entity or group acquired such
beneficial ownership or control resulted from the original issuance by the
Company of shares of its voting capital stock and was approved by at least a
majority of directors who shall have been members of the Board for at least
twelve (12) months prior to the date of such approval;

          (v) the first day after the date of this Plan when directors are elected
such that there shall have been a change in the composition of the Board such
that a majority of 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 a director at the beginning of such twelve (12) month period was
approved by a vote of at least sixty percent (60%) of the directors then still
in office who were directors at the beginning of such period; or

          (vi) the date upon which the Board determines (in its sole discretion)
that based on then current available information, the events described in
clause (iv) are reasonably likely to occur.

     (e)  “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.

     (f)  “Committee” shall mean a Committee appointed by the Board in
accordance with Section 3(a) of the Plan, if one is appointed, in which event
the Committee or Committees, as the case may be, shall possess the power and
authority of the Board with respect to the Plan as set forth in Section 3(b) of
the Plan.

     (g)  “Common Stock” shall mean the Common Stock, $.01 par value per share,
of the Company.

     (h)  “Company” shall mean EXE Technologies, Inc., a Delaware corporation,
and any successor in interest that agrees to assume and maintain the Plan.

     (i)  “Consultant” shall mean any person associated with the Company or a
Subsidiary who is engaged by the Company or a Subsidiary to render services and
is compensated by the

2

 

 Company or Subsidiary for such services, including but not limited to, an
advisor or independent contractor, but excluding any director who is not an
Employee.

     (j)  “Disability” or “Disabled” with respect to an Optionee shall mean (i)
when the Optionee is determined to be disabled within the meaning of any
long-term disability policy or program sponsored by the Company covering 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 is unable to engage in
any substantial gainful activity by reason of a physical or mental impairment
that can be expected to result in death or that has lasted or can be expected
to last for a continuous period of not less than twelve (12) months. The
determination of whether an Optionee is Disabled pursuant to subparagraph (ii)
shall be determined by the Administrator, whose determination shall be
conclusive; provided that: (A) if an Optionee is bound by the terms of an
executive Employment Agreement between the Optionee and the Company, then
whether the Optionee is “Disabled” for purposes of the Plan shall be determined
in accordance with the procedures set forth in said Employment Agreement, if
such procedures are therein provided; and (B) an Optionee bound by such an
Employment Agreement shall not be determined to be Disabled under the Plan any
earlier than he or she would be determined to be disabled under his or her
Employment Agreement.

     (k)  “Employee” shall mean any person employed by the Company or any
Subsidiary of the Company.

     (l)  “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

     (m)  “Fair Market Value” shall mean, as of any date, the fair market value
of a share of Common Stock as determined pursuant to Section 7 hereof.

     (n)  “Incentive Stock Option” shall mean any Option that is intended to be
and is designated as an incentive stock option within the meaning of Section
422 of the Code.

     (o)  “Non-Employee Director” shall have the meaning set forth in Rule
16b-3(b)(3)(i) promulgated by the Securities and Exchange Commission under the
Exchange Act, or any successor definition adopted by the Securities and
Exchange Commission; provided, however, that the Administrator may, to the
extent the Administrator deems it necessary or desirable to comply with Section
162(m) of the Code and applicable regulations thereunder, ensure that each
Non-Employee Director also qualifies as an “outside director” as that term is
defined in the regulations under Section 162(m) of the Code.

     (p)  “Non-Qualified Stock Option” shall mean any Option that is not
intended to or does not qualify as an Incentive Stock Option.

     (q)  “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock
Option, as the case may be, granted pursuant to the Plan.

3

 

     (r)  “Option Agreement” shall mean the written agreement by and between the
Company and an Optionee under which Optionee may purchase the Shares pursuant
to the exercise of an Option.

     (s)  “Optionee” shall mean an Employee or Consultant to whom an Option is
granted.

     (t)  “Plan” shall mean this EXE Technologies, Inc. 1997 Incentive and
Non-Qualified Stock Option Plan, as amended from time to time.

     (u)  “Public Offering” shall mean the consummation of a firm commitment
underwritten public offering of equity securities of the Company registered
under the Securities Act.

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

     (w)  “Securities Act” shall mean the Securities Act of 1933, as amended.

     (x)  “Share” or “Shares” shall mean a share or shares of Common Stock, as
adjusted in accordance with Section 8 of the Plan, that is allocated to the
Plan.

     (y)  “Subsidiary” shall mean, whether now or hereafter existing, a
subsidiary or parent corporation of the Company as such term is defined in
Sections 424(e), (f) and (g) of the Code.

     (z)  “Vested Amount” shall mean, with respect to each Option, a percentage
of the shares for which the Option has become exercisable (subject to the
further terms of the Plan) by application of the schedule set forth in Section
4(b).

     Section 3. Administration.

     (a)  Procedure. The Plan shall be administered by the Board and/or by one
or more Committees, each of which shall consist of not less than two (2)
persons appointed by the Board. In the event the Company has a class of equity
securities registered under the Exchange Act, the Board shall administer the
Plan; provided that it may appoint one or more Committees in accordance with
Section 3(b).

     (b)  Committees. If one or more Committees are appointed by the Board,
then the Committees shall possess the power and authority of the Board in
administering the Plan on behalf of the Board, subject to such terms and
conditions as the Board may prescribe, which

4

 

 conditions may state that the Committee shall have administrative
authority with respect to only a prescribed group of individuals eligible for
Options under the Plan.

     Members of a Committee shall be members of the Board and shall serve for
such period of time as the Board may determine. From time to time, the Board
may increase the size of a Committee and appoint additional members thereto,
remove members (with or without cause) and appoint new members in substitution
therefore, fill vacancies however caused, or remove all members of a Committee
and thereafter directly administer the Plan. Notwithstanding the foregoing, in
the event the Company has a class of equity securities registered under the
Exchange Act, any Committee that grants Options to individuals who are covered
employees pursuant to section 162(m) of the Code and the regulations
thereunder, and/or to individuals who are directors, officers or principal
stockholders as determined pursuant to Section 16 of the Exchange Act, shall be
composed solely of two (2) or more Non-Employee Directors.

     (c)  Powers of the Administrator. Subject to the provisions of the Plan
(and, in the case of the Committee, the specific duties delegated by the Board
to such Committee), the Administrator shall have the authority, in its sole
discretion:

          (1) to determine whether and to what extent Options are granted hereunder;

          (2) to determine the Fair Market Value of the Common Stock based upon review of
relevant information and in accordance with Section 7 of the Plan;

          (3) to determine the exercise price of the Options in accordance with Section
6(b) of the Plan;

          (4) to select the Optionees to whom Options may from time to time be granted;

          (5) to determine the number of Shares to be subject to each Option granted
hereunder;

          (6) to prescribe, amend and rescind rules and regulations relating to the Plan;

          (7) to determine the terms and provisions of each Option granted under the
Plan, each Option Agreement and each other agreement that in the sole
discretion of the Administrator may be required (all of which agreements need
not be identical with the terms of other Options, Option Agreements or other
agreements);

          (8) to determine the circumstances under which the vesting or exercise date of
an Option will be accelerated;

          (9) to interpret the Plan or any agreement entered into with respect to the
grant or exercise of Options;

5

 

          (10) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted by
the Administrator or to take such other actions as may be necessary or
appropriate with respect to the Company’s rights pursuant to Options or
agreements relating to the granting or exercise thereof;

          (11) to determine whether and under what circumstances an Option may be
exercised without a payment of cash under Section 6(c) hereof;

          (12) to terminate the Plan in the event of a Change of Control; and

          (13) to make such other determinations and establish such other procedures as
it deems necessary or advisable for the administration of the Plan.

     (d)  Effect of the Administrator’s Decision. All decisions, determinations
and interpretations of the Administrator pursuant to the provisions of the Plan
shall be final and binding on all Optionees and any other holders of Options.

     (e)  Limitation of Liability. Notwithstanding anything herein to the
contrary, no member of the Board or the Committee shall be liable for any good
faith determination, act or failure to act in connection with the Plan or any
Option awarded hereunder.

     Section 4. Eligibility.

     (a)  Eligible Persons. Options may be granted at any time and from time to
time to any Employee or Consultant who shall be selected by the Administrator.
Any grant of Options may include or exclude any Employee or Consultant as the
Administrator shall determine in its sole discretion. Consultants who are not
also Employees of the Company are eligible to be granted Non-Qualified Stock
Options under the Plan but are not eligible to be granted Incentive Stock
Options under the Plan.

     (b)  Vesting and Exercisability of Options. Subject to the provisions of
Section 6 hereof and except to the extent the Administrator provides otherwise,
each Option shall vest and become exercisable as follows: (i) 25% of the
Option shall vest on the first anniversary of the date of grant; and (ii) the
remaining 75% shall vest at a rate of 2.083% of the Option on the last day of
each month after the first anniversary of the date of grant, with the number of
shares vesting each month determined by rounding up to the nearest whole number
of shares.

     The Administrator may, but need not, determine that the Vested Amount of
each Option shall be exercisable only upon the earlier to occur of: (i) the
consummation of a Public Offering; or (ii) the consummation of a Sale of the
Company. The unvested portion of each Option may not be exercised. In
addition, as specified in Section 3(c)(8), the Administrator may determine the
circumstances under which the vesting or exercise date of an Option will be
accelerated.

     (c)  Effect Upon Engagement. The Plan will not confer upon any Optionee
any right with respect to the continuation of any employment, consulting or any
other relationship with the Company nor will it interfere in any way with such
Optionee’s right or the Company’s right to

6

 

 terminate that Optionee’s employment, consulting or other relationship
with the Company at any time, whether with or without cause.

     Section 5. Stock Subject to the Plan.

     (a)  Maximum Number of Shares. Subject to the provisions of Section 8 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is Twelve Million (12,000,000) Shares. The Shares may be
authorized, but unissued or reacquired, Common Stock. In the event the Company
has a class of equity securities registered under the Exchange Act, the maximum
number of Shares with respect to which Options may be granted under the Plan to
any Employee during any calendar year is One Million (1,000,000) Shares.

     (b)  Return of Shares to the Plan. If an Option expires, is terminated or
becomes unexercisable for any reason without having been exercised in full,
then the unpurchased Shares subject thereto shall, unless the Plan shall have
been terminated, return to the Plan and become available for future grant under
the Plan.

     Section 6. Terms and Conditions of Options.

     Each Option granted under the Plan shall be authorized by the
Administrator and shall be evidenced by an Option Agreement, which shall state
or incorporate by reference all other terms and conditions of the Plan
including, without limitation, the following terms and conditions:

     (a)  Number of Shares. The Option Agreement shall state the number of
Shares subject to the Option.

     (b)  Option Exercise Price. The per Share exercise price for the Shares to
be issued pursuant to the exercise of an Incentive Stock Option shall be stated
in the Option Agreement and shall be no less than the Fair Market Value per
share of the Common Stock on the date such Option is granted, without regard to
any restriction other than a restriction that by its terms will never lapse;
provided, however, that any Incentive Stock Option granted under this Plan to
an Employee who, at the time such Option is granted, owns more than ten percent
(10%) of the current total combined voting power of all classes of the capital
stock of the Company, shall have an exercise price per Share of not less than
one hundred ten percent (110%) of the Fair Market Value of the Common Stock on
the date such Option is granted. The per Share exercise price for the Shares
to be issued pursuant to the exercise of a Non-Qualified Stock Option shall be
stated in the Option Agreement and shall be determined by the Administrator but
shall be at least $.01 per Share.

     (c)  Consideration. The consideration to be paid for the Shares to be
issued upon the exercise of an Option, including the method of payment, shall
be determined by the Administrator and may consist entirely of: (i) cash; (ii)
check; or (iii) such other consideration and method of payment as the
Administrator may from time to time determine. In making its determination as
to the type of consideration to accept, the Administrator shall consider if the
acceptance of such consideration may be reasonably expected to benefit the
Company.

7

 

     (d)  Form of Option. The Option Agreement shall state whether the Option
granted thereunder is intended to be an Incentive Stock Option or a
Non-Qualified Stock Option.

     (e)  Exercise of an Option.

          (1) Unless otherwise provided by the Administrator, the Vested Amount of any
Option granted hereunder shall be exercisable, in whole or in part, at such
times and under such further conditions as may be determined by the
Administrator and as set forth in the Option Agreement.

          (2) An Option may not be exercised for a fraction of a Share.

          (3) An Option may not be exercised after the date of expiration of its term as
shall be set forth in the Option Agreement.

          (4) An Option shall be deemed to have been exercised when written notice of
such exercise has been received by the Company at its principal executive
office in accordance with the terms of the Option Agreement by the person
entitled to exercise the Option, and full payment for the Shares with respect
to which the Option is to be exercised has been received by the Company,
accompanied by any agreements required by the Administrator or the terms of the
Plan and/or Option Agreement. An Optionee shall have no right to vote or
receive dividends and shall have no other rights as a stockholder with respect
to the Shares, notwithstanding the exercise of the Option, until the issuance
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock Certificate evidencing
such Shares. No adjustment shall be made for a dividend or other right for
which the record date is prior to the date a stock Certificate with respect to
the Shares is issued.

          (5) As soon as practicable after the proper exercise of an Option in accordance
with the provisions of the Plan, the Company shall, without transfer or issue
tax to the Optionee, deliver to the Optionee at the principal executive office
of the Company or such other place as shall be mutually agreed upon between the
Company and the Optionee, a Certificate or Certificates representing the Shares
for which the Option shall have been exercised. The time of issuance and
delivery of the Certificate(s) representing the Shares for which the Option
shall have been exercised may be postponed by the Company for such period as
may be required by the Company, with reasonable diligence, to comply with any
applicable listing requirements of any national or regional securities exchange
or any law or regulation applicable to the issuance or delivery of such Shares.

          (6) The exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be available both for purposes of the Plan
and for sale under the Option by the number of Shares as to which the Option is
exercised.

     (f)  Termination of Options.

          (1) Termination in General. Unless sooner terminated as provided in this Plan,
each Option shall be exercisable for the period of time as shall be determined
by the

8

 

Administrator and set forth in the Option Agreement and shall be void and
unexercisable thereafter.

          (2) Termination of Relationship with the Company. Unless sooner terminated as
provided in this Plan, in the event of the termination of an Optionee’s
employment or consulting relationship with the Company (as the case may be) for
any reason other than the death or Disability of the Optionee, such Optionee
may, within three (3) months (or such other period of time as is determined by
the Administrator) from the date of such termination (but in no event later
than the expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option up to the Vested Amount as of the date of
termination, but only to the extent that the Optionee was entitled to exercise
the Option on the date of such termination. To the extent the Optionee was not
entitled to exercise the Option on the date of such termination, or if the
Optionee does not exercise such Option to the extent so entitled within the
time specified herein, the Option will terminate.

          (3) Death or Disability. Unless sooner terminated as provided in this Plan, in
the event of the death or Disability of an Optionee while employed or engaged
by the Company (as the case may be), Options held by such Optionee that are
exercisable on the date of Disability or death shall be exercisable up to the
Vested Amount as of the date of Disability or death for a period of twelve (12)
months commencing on the date of the Optionee’s Disability or death. Such
Options may be exercisable by the Optionee or his or her legal guardian or
representative or, in the case of death, by his or her executor(s) or
administrator(s); provided, however, if such disabled Optionee shall commence
any employment or engagement during such twelve (12) month period with or by a
competitor of the Company (including, but not limited to, full or part-time
employment or independent consulting work), as determined solely in the
judgment of the Administrator, then all Options held by such Optionee that have
not yet been exercised shall terminate immediately upon the commencement
thereof.

          (4) Agreement to Terminate. Options may be terminated at any time by agreement
between the Company and the Optionee.

     (g)  Other Provisions.

          (1) Notwithstanding any provision in this Plan or an Option Agreement to the
contrary, no Option granted to any Optionee under this Plan shall be treated as
an Incentive Stock Option to the extent that such Option would cause the
aggregate Fair Market Value of all Shares with respect to which Incentive Stock
Options are exercisable by such Optionee for the first time during any calendar
year (determined as of the date of grant of each such Option) to exceed
$100,000. For purposes of determining whether an Incentive Stock Option
granted to an Optionee would cause the aggregate Fair Market Value to exceed
the $100,000 limitation, such Incentive Stock Options shall be taken into
account in the order granted. For purposes of this subsection, Incentive Stock
Options granted to an Optionee shall include all incentive stock options under
all plans of the Company or any Subsidiary that are incentive stock option
plans within the meaning of Section 422 of the Code. Options may be exercised
in any order elected by the Optionee, whether or not the Optionee holds any
unexercised Options under this Plan or any other plan of the Company.

9

 

          (2) Notwithstanding any other provision of this Plan or an Option Agreement to
the contrary, no Option shall be (A) granted under this Plan after ten (10)
years from the date on which this Plan is adopted by the Administrator, or (B)
exercisable more than ten (10) years from the date of grant; provided that if
an Incentive Stock Option shall be granted under this Plan to any Employee who,
at the time of the grant of such Option, owns stock possessing more than ten
percent (10%) of the total combined voting power for all classes of the
Company’s capital stock, the foregoing clause (B) shall be deemed modified by
substituting the term “five (5) years” for the term “ten (10) years” that
appears therein.

     Section 7. Fair Market Value of Common Stock.

     The Fair Market Value of a Share of Common Stock, as of any date, shall be
determined as follows:

     (a)  If the Shares of Common Stock are listed on a national or regional
securities exchange or traded through NASDAQ/NMS, then the Fair Market Value of
a share of Common Stock shall be the closing price for a share of Common Stock
on the exchange or on NASDAQ/NMS, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable on the relevant valuation
date, or if there is no trading on that date, on the next trading date.

     (b)  If the Shares of Common Stock are traded in the over-the-counter
market, then the Fair Market Value of a share of Common Stock shall be the mean
of the bid and asked prices for a share of Common Stock on the relevant
valuation date as reported in The Wall Street Journal or other source the
Administrator deems reliable (or, if not so reported, as otherwise reported by
the National Association of Securities Dealers Automated Quotations (“NASDAQ”)
System or the NASD OTC Bulletin Board), or if there is no trading on such date,
on the next trading date.

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

     Section 8. Adjustments.

     (a)  Adjustments. Subject to any required action by the stockholders of
the Company, the number of Shares covered by each outstanding Option, the
number of Shares that have been authorized for issuance under the Plan but as
to which no Options have yet been granted or that have been returned to the
Plan upon cancellation or expiration of an Option, and the price per Share of
the Common Stock covered by an Option will each be proportionately adjusted for
any increase or decrease in the number of outstanding shares of Common Stock
resulting from stock splits, reverse stock splits, stock dividends,
reclassifications and recapitalizations or automatic conversion of shares of
one class of stock to those of another by operation of the terms of such stock.
Such adjustment shall be made by the Administrator whose determination in that
respect will be final, binding and conclusive. Except as provided herein, no
issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class, will affect,

10

 

 and no adjustment by reason thereof will be made with respect to, the
number or price of shares of Common Stock subject to an Option.

     (b)  No Fractional Shares. No fractional Shares shall be issuable on
account of any action aforesaid, and the aggregate number of Shares into which
Shares then covered by the Option, when changed as the result of such action,
shall be reduced to the number of whole Shares resulting from such action,
unless the Administrator, in its sole discretion, shall determine to issue
scrip Certificates in respect to any fractional Shares, which scrip
Certificates shall be in a form and have such terms and conditions as the
Administrator in its discretion shall prescribe.

     Section 9. Rights as a Stockholder.

     An Optionee shall have no rights as a stockholder of the Company and shall
not have the right to vote nor receive dividends with respect to any Shares
subject to an Option until such Option has been exercised and a stock
Certificate with respect to the Shares purchased upon such exercise of the
Option has been issued to Optionee as set forth in Section 6(e)(4) and (5)
hereof.

     Section 10. Forfeiture.

     Notwithstanding any other provision of this Plan, (a) if an Optionee’s
employment with the Company is terminated by the Company pursuant to the cause
termination provisions of an applicable employment agreement, or (b) if the
Optionee’s employment or consulting relationship with the Company (as the case
may be) is terminated and the Board makes a determination that the Optionee (1)
has engaged in any type of disloyalty to the Company, including without
limitation, fraud, embezzlement, theft, or dishonesty in the course of
Optionee’s employment or consulting relationship, (2) has been convicted of a
felony or other crime involving a breach of trust or fiduciary duty owed to the
Company, (3) has made an unauthorized disclosure of trade secrets or
confidential information of the Company, or (4) has breached any
confidentiality agreement or non-competition agreement with the Company in any
material respect, then, at the election of the Board, all unexercised Options
held by the Optionee (whether or not then exercisable) shall terminate. In the
event of such an election by the Board, in addition to immediate termination of
all unexercised Options, the Optionee shall forfeit all Shares for which the
Company has not yet delivered stock Certificates to the Optionee and the
Company shall refund to the Optionee the exercise price paid to it upon
exercise of the Option with respect to such Shares. Notwithstanding anything
herein to the contrary, the Company may withhold delivery of stock Certificates
pending the resolution of any inquiry that could lead to a finding resulting in
forfeiture.

     Section 11. Time of Granting Options.

     The date of grant of an Option shall, for all purposes, be the date on
which the Administrator makes the determination to grant the Option or such
other date as is determined by the Administrator. Notice of the determination
shall be given to each Optionee to whom an Option is so granted within a
reasonable time after the date of such grant.

11

 

     Section 12. Modification, Extension, Renewal of Option.

     Subject to the terms and conditions of the Plan, the Administrator may
modify, extend or renew an Option, or accept the surrender of an Option (to the
extent not theretofore exercised); provided that no Incentive Stock Option may
be modified, extended or renewed if such action would cause such Option to
cease to be an incentive stock option within the meaning of Section 422 of the
Code.

     Section 13. Transferability.

     No Option may be sold, pledged, assigned, transferred or disposed of in
any manner other than by will or by the laws of descent and distribution.
During the lifetime of the Optionee, his or her Options shall be exercisable by
the Optionee. In the event of the Optionee’s legal incapacity or Disability,
the Option is exercisable by the Optionee’s legal guardian or representative.

     Section 14. Power of Board if Change of Control.

     Notwithstanding anything to the contrary set forth in this Plan, in the
event of a Change of Control, the Board shall have the right, in its sole
discretion, to accelerate the vesting of all Options that have not vested as of
the date of the Change of Control and/or to establish an earlier date for the
expiration of the exercise of an Option (notwithstanding a later expiration of
exercisability set forth in an Option Agreement). In addition, in the event of
a Change of Control of the Company, the Board shall have the right, in its sole
discretion, subject to and conditioned upon a Sale of the Company: (a) to
arrange for the successor company (or other entity) to assume all of the rights
and obligations of the Company under this Plan; or (b) to terminate this Plan
and (i) to pay to all Optionees cash with respect to those Options that are
vested as of the date of the Sale of the Company in an amount equal to the
difference between the Option Price and the Fair Market Value of a Share of
Common Stock (determined as of the date the Plan is terminated) multiplied by
the number of Options that are vested as of the date of the Sale of the Company
which are held by the Optionee as of the date of the Sale of the Company, or
(ii) to arrange for the exchange of all Options 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 the same form as the Optionee would
have received from the successor corporation if the Optionee had owned the
Shares subject to Options that are vested as of the date of the Sale of the
Company rather than the Option at the time of the Sale of the Company. The
form of payment or distribution to the Optionee pursuant to this Section shall
be determined by the Board in its sole discretion.

     Section 15. Amendment or Termination of the Plan.

     Insofar as permitted by law and the Plan, the Board may at any time
suspend, terminate, discontinue, alter or amend the Plan in any respect
whatsoever; provided, however, that without prior approval of at least a
majority of the stockholders entitled to vote thereon, no such revision or
amendment may increase the aggregate number of Shares for which Options may be
granted hereunder, change the designation of the class of Optionees eligible to
receive Options or

12

 

decrease the price at which Options may be granted. Any other provision of
this Section notwithstanding, the Board specifically is authorized to adopt any
amendment to this Plan deemed by the Board to be necessary or advisable to
assure that the Incentive Stock Options or the Non-Qualified Stock Options
available under the Plan continue to be treated as such, respectively, under
all applicable laws.

     Section 16. Application of Funds.

     The proceeds received by the Company from the sale of Shares pursuant to
the exercise of Options shall be used for general corporate purposes.

     Section 17. No Obligation to Exercise Option.

     The granting of an Option shall impose no obligation upon the Optionee to
exercise such Option.

     Section 18. Approval of Stockholders.

     This Plan, and any amendments thereto, shall become effective on the date
the Plan or amendment, as applicable, is adopted by the Board; provided that
the Plan shall become limited to a non-qualified stock option plan if, either
in the case of the Plan’s original adoption or in the case of an amendment
increasing the number of shares reserved for award under the Plan or changing
the class of employees eligible for Incentive Stock Options (“material
amendment”), the Plan or such material amendment is not approved by the
stockholders of a majority of the Company’s outstanding voting stock within one
year (365 days) of its adoption by the Board. The Administrator may grant
Options hereunder prior to approval of the Plan, or any material amendments
thereto, by the holders of a majority of the Company’s outstanding voting
stock; provided that any and all Options so granted shall be converted into
Non-Qualified Stock Options if the Plan or material amendment, as applicable,
is not approved by such stockholders within 365 days of its adoption.

     Section 19. Conditions Upon Issuance of Shares.

     (a)  Options granted under the Plan are conditioned upon the Company
obtaining any required permit or order from appropriate governmental agencies,
authorizing the Company to issue such Options and Shares issuable upon the
exercise thereof.

     (b)  Shares shall not be issued pursuant to the exercise of an Option
unless the exercise of such Option and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

     (c)  As a condition to the exercise of an Option, the Administrator may
require the person exercising such Option to execute an agreement with, and/or
may require the person

13

 

 exercising such Option to make any representation and/or warranty to, the
Company as may be, in the judgment of counsel to the Company, required under
applicable law or regulation, including but not limited to, a representation
and warranty that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation and warranty is
appropriate under any of the aforementioned relevant provisions of law.

     Section 20. Reservation of Shares.

     (a)  The Company, during the term of this Plan, shall at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

     (b)  The Company, during the term of this Plan, shall use its best efforts
to seek to obtain from appropriate regulatory agencies any requisite
authorization in order to issue and sell such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the
Company to obtain from any such regulatory agency having jurisdiction the
requisite authorization(s) deemed by the Company’s counsel to be necessary for
the lawful issuance and sale of any Shares hereunder, or the inability of the
Company to confirm to its satisfaction that any issuance and sale of any Shares
hereunder will meet applicable legal requirements, shall relieve the Company of
any liability in respect to the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.

     Section 21. Other Agreements.

     Options shall be evidenced by an Option Agreement in such form or forms as
the Administrator (subject to the terms and conditions of this Plan) may from
time to time approve, which Option Agreement shall evidence and reflect the
terms and conditions of an Option as set forth in Section 6 hereof. The
Administrator may, from time to time, require such other agreements in
connection with the Option as it, in its sole discretion, deems advisable. The
Option Agreement and any other agreement required by the Plan or the Option
Agreement, as determined by the Administrator, may contain such other
provisions as the Administrator in its discretion deems advisable and that are
not inconsistent with the provisions of this Plan, including, without
limitation, restrictions upon or conditions precedent to the exercise of the
Option.

     Section 22. Taxes, Fees, Expenses and Withholding.

     (a)  The Company shall pay all original issue and transfer taxes (but not
income taxes, if any) with respect to the grant of an Option and/or the issue
and transfer of Shares pursuant to the exercise thereof, and all other fees and
expenses necessarily incurred by the Company in connection therewith, and will,
from time to time, use its best efforts to comply with all laws and regulations
that, in the opinion of counsel for the Company, shall be applicable thereto.

     (b)  The granting of Options hereunder and the issuance of Shares pursuant
to the exercise thereof is conditioned upon the Company’s reservation of the
right to withhold in accordance with any applicable law, from any compensation
or other amounts payable to the

14

 

 Optionee, any taxes required to be withheld under federal, state or local
law as a result of the grant or exercise of such Option or the sale of the
Shares issued upon exercise thereof. To the extent that compensation or other
amounts, if any, payable to the Optionee is insufficient to pay any taxes
required to be so withheld, the Company may, in its sole discretion, require
the Optionee (or such other person entitled herein to exercise the Option), as
a condition to the exercise of an Option, to pay in cash to the Company an
amount sufficient to cover such tax liability or otherwise to make adequate
provision for the Company’s satisfaction of its withholding obligations under
federal, state and local law.

     Section 23. Notices.

     Any notice to be given to the Company pursuant to the provisions of this
Plan shall be addressed to the Company in care of its Secretary (or such other
person as the Company may designate from time to time) at its principal
executive office, and any notice to be given to an Optionee shall be delivered
personally or addressed to the Optionee at the address given beneath the
signature of the Optionee on his or her Option Agreement, or at such other
address as such Optionee or his or her permitted transferee (upon the transfer
of the Shares) may hereafter designate in writing to the Company. Any such
notice shall be deemed duly given when enclosed in a properly sealed envelope
or wrapper addressed as aforesaid, registered or certified, and deposited,
postage and registry or certification fee prepaid, in a post office or branch
post office regularly maintained by the United States Postal Service. It shall
be the obligation of each Optionee and each permitted transferee holding Shares
purchased upon exercise of an Option to provide the Secretary of the Company,
by letter mailed as provided herein, with written notice of his or her direct
mailing address.

     Section 24. No Enlargement of Employee Rights.

     This Plan is purely voluntary on the part of the Company, and the
continuance of the Plan shall not be deemed to constitute a contract between
the Company and any Employee or Consultant, or to be consideration for or a
condition of the employment or service of any Employee or Consultant as the
case may be. Nothing contained in this Plan shall be deemed to give any
Employee or Consultant the right to be retained in the employ or service of the
Company, or to interfere with the right of the Company to discharge or retire
any Employee or Consultant thereof at any time. No Employee or Consultant
shall have any right to or interest in Options authorized hereunder prior to
the grant thereof to such Employee or Consultant, and upon such grant such
Employee shall have only such rights and interests as are expressly provided
herein, subject, however, to all applicable provisions of the Company’s
Certificate of Incorporation, as the same may be amended from time to time.

     Section 25. Information to Optionees.

     The Company, upon request, shall provide without charge to each Optionee
copies of such annual and periodic reports as are provided by the Company to
its stockholders generally.

15

 

     Section 26. Availability of Plan.

     A copy of this Plan shall be delivered to the Secretary of the Company and
shall be shown to any eligible person making reasonable inquiry concerning it.

     Section 27. Invalid Provisions.

     In the event that any provision of this Plan is found to be invalid or
otherwise unenforceable under any applicable law, such invalidity or
unenforceability shall not be construed as rendering any other provisions
contained herein as invalid or unenforceable, and all such other provisions
shall be given full force and effect to the same extent as though the invalid
or unenforceable provision was not contained herein.

     Section 28. Applicable Law.

     This Plan shall be governed by and construed in accordance with the laws
of the State of Delaware.

     Section 29. Administrator Action.

     Notwithstanding anything to the contrary set forth in this Plan, any and
all actions of the Administrator taken under or in connection with this Plan
and any agreements, instruments, documents, Certificates or other writings
entered into, executed, granted, issued and/or delivered pursuant to the terms
hereof, shall be subject to and limited by any and all votes, consents,
approvals, waivers or other actions of all or certain stockholders of the
Company or other persons required pursuant to (a) the Company’s Certificate of
Incorporation (as the same may be amended and/or restated from time to time),
(b) the Company’s Bylaws (as the same may be amended and/or restated from time
to time), and (c) any other agreement, instrument, document or writing now or
hereafter existing, between or among the Company and its stockholders or other
persons (as the same may be amended from time to time).

     Section 30. Miscellaneous.

     This Plan is intended to comply with the conditions and requirements for
employee benefit plans under Rule 16b-3, as promulgated under Section 16 of the
Exchange Act such that Options granted pursuant to the Plan will be exempted
from the provisions of Section 16(b) thereof. To the extent that any provision
of the Plan would cause a conflict with such requirements, such provision shall
be deemed null and void to the extent permitted by applicable law. This
section shall not be applicable if no class of the Company’s equity securities
is then registered pursuant to Section 12 of the Exchange Act.

AMENDMENT NO. 1 TO THE

EXE TECHNOLOGIES, INC.

1997 INCENTIVE AND NON-QUALIFIED

STOCK OPTION PLAN

     Section 5(a) of the EXE Technologies, Inc. 1997 Incentive and
Non-Qualified Stock Option Plan (the “Plan”) is hereby amended to increase the
number of shares of Common Stock available for issuance thereunder

16

 

 from 12,000,000 shares to 15,000,000 shares and increasing the maximum
number of shares of Common Stock with respect to which options may be granted
under the Plan to any employee during any calendar year from 1,000,000 shares
to 3,000,000 shares.

Adopted by the Board of Directors

on April 24, 2002

Adopted by the Stockholders

On May 30, 2002

AMENDMENT NO. 2 TO THE

EXE TECHNOLOGIES, INC.

1997 INCENTIVE AND NON-QUALIFIED

STOCK OPTION PLAN

     Section 3(b) of the EXE Technologies, Inc. 1997 Incentive and
Non-Qualified Stock Option Plan (the “Plan”) is hereby amended so that the
Employee Stock Option Committee (which gives grants to employees and
consultants, but does not give grants to individuals who are covered employees
pursuant to section 162(m) of the Code and the regulations thereunder, and/or
to individuals who are directors, officers or principal stockholders as
determined pursuant to Section 16 of the Exchange Act) may consist of a single
board member, plus at least one executive officer.

Adopted by the Board of Directors

on August 6, 2002

17

 

EXE TECHNOLOGIES, INC.

1997 INCENTIVE AND NON-QUALIFIED

STOCK OPTION PLAN

INCENTIVE STOCK OPTION AGREEMENT

     EXE TECHNOLOGIES, INC. (the “Company”) hereby grants to
                                                     (the “Optionee”) an option (the “Option”) purchase
a total of                                                    shares of Common Stock, $ .01 par value per share, of
the Company (“Common Stock”), at the price and on the terms set forth herein,
and in all respects subject to the terms and provisions of the EXE
TECHNOLOGIES, INC. 1997 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN (the
“Plan”) applicable to incentive stock options, which terms and provisions are
incorporated herein by reference. Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Plan.

     1.     Nature of the Option. The Option is intended by the Company and the
Optionee to be an incentive stock option within the meaning of Section 422 of
the Code.

     2.     Date of Grant; Term of Option. The Option is granted this        day of
                    ,        , and it may not be exercised later than 5:00 p.m. on the
       day of                     ,        .

     3.     Option Exercise Price. The Option exercise price
is $       per Share, which price is the Fair Market Value per share of the
Common Stock on the date hereof; or $             per share if Optionee, at the
time of grant, owns stock possessing more than ten percent (10%) of the current
total combined voting power of all classes of the Company’s capital stock,
which price represents a price per Share equal to no less than one hundred ten
percent (110%) of the Fair Market Value of the Common Stock on the date the
Option is granted.

     4.     Exercise of Option. Except as otherwise provided herein, the Option
shall be exercisable during its term only in accordance with the terms and
provisions of the Plan and this Option Agreement as follows:

          (a) Vesting. Twenty-Five percent of the Option shall vest and become
exercisable on the first anniversary of the date of grant. The remaining 75%
of the Option shall vest and become exercisable at a rate of 2.083% of the
Option on the last day of each month after the first anniversary of the date of
grant, with the number of shares vesting each month determined by rounding up
to the nearest whole number of shares.

          (b) Right to Exercise. The Vested Amount of each Option may be exercised
at such times and subject to such procedures as the Company may further
provide.

 

 

          (c) Method of Exercise. The Option shall be exercisable by written notice
that shall state the election to exercise the Option, the number of Shares in
respect to which the Option is being exercised and such other representations
and agreements as to the Optionee’s investment intent with respect to such
Shares as may be required by the Company hereunder or pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee
(or, subject to the approval of the Administrator, a registered securities
broker authorized by the Optionee to exercise the Option pursuant to an
executed power of attorney) and shall be delivered in person or by certified
mail to the Secretary of the Company or such other person as may be designated
by the Company. The written notice shall be accompanied by payment of the
purchase price and any agreements required by the Administrator, the terms of
the Plan and/or this Option Agreement. The Option will be deemed to be
exercised upon the receipt by the Company of such written notice, payment of
the purchase price, and duly executed copies of any agreements required by the
Administrator, the terms of the Plan and/or this Option Agreement. The
Optionee will have no right to vote or receive dividends and will have not
other rights as a stockholder with respect to such Shares notwithstanding the
exercise of the Option, until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock Certificate evidencing the Shares that are being issued
upon exercise of the Option. The Company will issue (or cause to be issued)
such stock Certificates promptly following the exercise of the Option. The
Certificate or Certificates for the Shares as to which the Option shall be
exercised shall be registered in the name of the Optionee and shall contain any
legend as may be required under the Plan and any agreements required by the
Administrator and/or applicable law.

          (d) Method of Payment. The method of payment of the purchase price shall
be determined by the Administrator and may consist entirely of cash, check, or
any combination of such methods of payment, or such other consideration or
method of payment as may be authorized by the Administrator and permitted under
the Plan.

          (e) Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares upon such exercise would constitute a violation of any
applicable federal or state securities laws or other laws or regulations. As a
condition to the exercise of the Option, the Company may require the Optionee
to make any representations and warranties to the Company as may be required by
any applicable law or regulation.

     5.     Investment Representations. Unless the Shares have been registered
under the Securities Act, in connection with the grant of the Option, the
Optionee represents and warrants as follows:

          (a) The Optionee is acquiring the Option, and upon exercise of the Option,
the Optionee will be acquiring the Shares for investment for his or her own
account, not as a nominee or agent, and not with a view to, or for resale in
connection with, any distribution thereof.

          (b) The Optionee is aware of the Company’s business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Shares. The Optionee has
received all

2

 

 information as the Optionee deems necessary and appropriate to enable him
or her to evaluate the financial risk inherent in making an investment in the
Shares and has received satisfactory and complete information concerning the
business and financial condition of the Company in response to all inquiries in
respect thereof.

     6.     Termination of Employment with the Company. Subject to the provisions
of Section 8 hereof, upon termination of the Optionee’s employment with the
Company for any reason other than death or Disability, the Optionee shall have
the right to exercise the Option at any time within the three (3) month period
after the date of such termination to the extent that the Optionee was entitled
to exercise the Option at the date of such termination.

     7.     Death or Disability of Optionee. Upon the death or Disability of the
Optionee while in the employ of the Company, the Option may be exercised at any
time within twelve (12) months after the date of death or termination due to
Disability, in the case of death, by the Optionee’s estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, or, in the
case of Disability, by the Optionee or his legal guardian or representative,
but in any case only to the extent the Optionee was entitled to exercise the
Option at such date; provided, however, that if such disabled Optionee shall
commence any employment or engagement during such twelve (12) month period with
or by a competitor of the Company (including, but not limited to, full or
part-time employment or independent consulting work), as determined solely in
the judgment of the Administrator, then the Option shall terminate immediately
upon the commencement thereof. To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or to the extent
the Option is not exercised within the time specified herein, the Option shall
terminate. Notwithstanding the foregoing, the Option shall not be exercisable
after the expiration of the term set forth in Section 2 hereof.

     8.     Forfeiture of Option. Notwithstanding any other provision of the
Option Agreement, (a) if the Optionee’s employment with the Company is
terminated by the Company pursuant to the cause termination provisions of an
applicable employment agreement, or (b) if the Optionee’s employment with the
Company is terminated and the Board makes a determination that the Optionee (i)
has engaged in any type of disloyalty to the Company, including without
limitation, fraud, embezzlement, theft, or dishonesty in the course of his
employment, (ii) has been convicted of a felony or other crime involving a
breach of trust or other fiduciary duty owed to the Company, (iii) has
disclosed trade secrets or confidential information of the Company, or (iv) has
breached any agreement with the Company in respect of confidentiality,
non-disclosure, non-competition or otherwise, then, at the election of the
Board, all unexercised Options shall terminate. In the event of such an
election by the Board, in addition to immediate termination of all unexercised
Options, the Optionee shall forfeit all Shares for which the Company has not
yet delivered share Certificates to the Optionee and the Company shall refund
to the Optionee the Option price paid to the Company with respect to those
Shares. Notwithstanding anything herein to the contrary, the Company may
withhold delivery of share Certificates pending the resolution of any inquiry
that could lead to a determination resulting in forfeiture.

3

 

     9.     Non-transferability of Option. The Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution, and may be exercised during the lifetime of
the Optionee only by such Optionee. Subject to the foregoing and the terms of
the Plan, the terms of the Option Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.

     10.     Continuation of Employment. Neither the Plan nor this Option
Agreement shall confer upon any Optionee any right to continue in the
employment of the Company or limit in any respect the right of the Company to
discharge or release the Optionee at any time, with or without cause and with
or without notice. For purposes of Sections 6, 7 and 8, “Company,” when used
with reference to the employment of the Optionee, shall mean the Company and
any Affiliate, as applicable.

     11.     Withholding. The Company reserves the right to withhold, in
accordance with any applicable laws, from any consideration payable to Optionee
any taxes required to be withheld by federal, state or local law as a result of
the grant or exercise of the Option or the sale or other disposition of the
Shares issued upon exercise of the Option. If the amount of any consideration
payable to the Optionee is insufficient to pay such taxes or if no
consideration is payable to the Optionee, then upon the request of the Company,
the Optionee (or such other person entitled to exercise the Option pursuant to
Section 7 hereof) shall pay to the Company an amount sufficient for the Company
to satisfy any federal, state or local tax withholding requirements the Company
may incur as a result of the grant or exercise of the Option or the sale or
other disposition of the Shares issued upon the exercise of the Option.

     12.     The Plan. The Option is subject to, and the Company and the Optionee
agree to be bound by, all of the terms and conditions of the Plan as such Plan
may be amended from time to time in accordance with the terms thereof.
Pursuant to the Plan, the Administrator is authorized to adopt rules and
regulations not inconsistent with the Plan as it shall deem appropriate and
proper. A copy of the Plan in its present form is available for inspection
during business hours by the Optionee or the persons entitled to exercise the
Option at the Company’s principal office.

     13.     Conversion to Non-Qualified Option. Notwithstanding anything to the
contrary set forth herein, this Option is being granted subject to the
condition that in the event the Plan, or any material amendment (as defined in
Section 18 of the Plan) is not approved by the stockholders of the Company
within 365 days of the date that the Plan or material amendment, as applicable,
was adopted by the Board, this Option shall automatically be converted into a
Non-Qualified Stock Option. In addition, neither the Company nor any member of
the Board or Committee shall be liable for any good faith determination, act or
failure to act in connection with the Option which thereafter is determined to
have converted the Option into a Non-Qualified Stock Option.

     14.     Early Disposition of Stock. Subject to the fulfillment by the
Optionee of any conditions upon the disposition of Shares received under the
Option, the Optionee hereby agrees that if he or she disposes of any Shares
received under the Option within two (2) years

4

 

 from date of grant or one (1) year after such Shares were transferred to
him or her upon exercise of the Option, he or she will notify the Company in
writing within thirty (30) days after the date of such disposition. The
Optionee acknowledges that disposition by him or her within two (2) years from
the date of grant and one (1) year from the date of exercise of the Option
would disqualify him or her from capital gain treatment for any gain realized
upon such disposition.

     15.     Entire Agreement. The Option, together with the Plan and the other
exhibits attached thereto or hereto, represents the entire agreement between
the parties.

     16.     Governing Law. This Option shall be construed in accordance with the
laws of the State of Delaware, without regard to the application of the
principles of conflicts of laws.

     17.     Amendment. Subject to the provisions of the Plan, this Option
Agreement may only be amended by a writing signed by each of the parties
hereto.

	 	 	 	 	 	 	 
	Date:	 	 	 	 	EXE TECHNOLOGIES, INC
	 	
	 	 	 	 	 
	 	 	 	 	 	By:	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	 	Title:	 
	 	 	 	 	 	 	

5

 

ACKNOWLEDGMENT

     The Optionee acknowledges receipt of a copy of the Plan, a copy of which
is attached hereto, and represents that he or she has read and is familiar with
the terms and provisions thereof, and hereby accepts the Option subject to all
of the terms and provisions thereof. The Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan.

	 	 	 	 	 
	Date:	 	 	 	 
	 	

	 	 	

	 	 	 	 	Signature of Optionee
	 	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name
	 	 	 	 	 
	 	 	 	 	

	 	 	 	 	Address
	 	 	 	 	 
	 	 	 	 	

	 	 	 	 	City, State, Zip

 

 

EXE TECHNOLOGIES, INC.

1997 INCENTIVE AND NON-QUALIFIED

STOCK OPTION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

     EXE TECHNOLOGIES, INC. (the “Company”) hereby grants to
                          (the “Optionee”) an option (the “Option”) to
purchase a total of                                      shares of Common Stock, $ .01 par value per
share, of the Company (“Common Stock”), at the price and on the terms set forth
herein, and in all respects subject to the terms and provisions of the EXE
TECHNOLOGIES, INC. 1997 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN (the
“Plan”) applicable to non-qualified stock options, which terms and provisions
are incorporated by reference herein. Unless otherwise defined herein,
capitalized terms used but not defined herein shall have the meanings given to
them in the Plan.

     1.     Nature of the Option. The Option is intended to be a nonstatutory
stock option and is NOT intended to be an incentive stock option within the
meaning of Section 422 of the Code, or to otherwise qualify for any special tax
benefits to the Optionee.

     2.     Date of Grant; Term of Option. The Option is granted this       day of
                    ,      , and it may not be exercised later than 5:00 p.m. on the
      day of                ,                 ,      .

     3.     Option Exercise Price. The Option exercise price is                 
($        ) per Share.

     4.     Exercise of Option. Except as otherwise provided herein, the Option
shall be exercisable during its term only in accordance with the terms and
provisions of the Plan and this Option Agreement as follows:

          (a) Vesting. Twenty-Five percent of the Option shall vest and become
exercisable on the first anniversary of the date of grant. The remaining 75%
of the Option shall vest and become exercisable at a rate of 2.083% of the
Option on the last day of each month after the first anniversary of the date of
grant, with the number of shares vesting each month determined by rounding up
to the nearest whole number of shares.

          (b) Right to Exercise. The Vested Amount of each Option may be exercised
at such times and subject to such procedures as the Company may further
provide.

          (c) Method of Exercise. The Option shall be exercisable by written notice
that shall state the election to exercise the Option, the number of Shares in
respect to which the Option is being exercised and such other representations
and agreements as to the Optionee’s investment intent with respect to such
Shares as may be required by the

 

 

Administrator or pursuant to the provisions of the Plan. Such written notice
shall be signed by the Optionee (or, subject to the approval of the
Administrator, a registered securities broker authorized by the Optionee to
exercise the Option pursuant to an executed power of attorney) and shall be
delivered in person or by certified mail to the Secretary of the Company or
such other person as may be designated by the Company. The written notice
shall be accompanied by payment of the purchase price and any agreements
required by the Administrator, the terms of the Plan and/or this Option
Agreement. The Option will be deemed to be exercised upon the receipt by the
Company of such written notice, payment of the purchase price and duly executed
copies of any agreements required by the Administrator, the terms of the Plan
and/or this Option Agreement. The Optionee shall have no right to vote or
receive dividends and shall have no other rights as a stockholder with respect
to such Shares, notwithstanding the exercise of the Option, until the issuance
by the Company (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
Certificate evidencing the Shares that are being issued upon exercise of the
Option. The Company will issue (or cause to be issued) such stock Certificates
promptly following the exercise of the Option. The Certificate or Certificates
for the Shares as to which the Option shall be exercised shall be registered in
the name of the Optionee and shall contain any legend as may be required under
the Plan and any agreements required by the Administrator and/or applicable
law.

          (d) Method of Payment. The method of payment of the purchase price shall
be determined by the Administrator and may consist entirely of cash, check, or
any combination of such methods of payment, or such other consideration or
method of payment as may be authorized by the Administrator and permitted under
the Plan.

          (e) Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares upon such exercise would constitute a violation of any
applicable federal or state securities laws or other laws or regulations. As a
condition to the exercise of the Option, the Company may require the Optionee
to make any representations and warranties to the Company as may be required by
any applicable law or regulation.

     5.     Investment Representations. Unless the Shares have been registered
under the Securities Act, in connection with the acquisition of the Option, the
Optionee represents and warrants as follows:

          (a) The Optionee is acquiring the Option, and upon exercise of the Option,
Optionee will be acquiring the Shares for investment for his or her own
account, not as a nominee or agent, and not with a view to, or for resale in
connection with, any distribution thereof.

          (b) The Optionee is aware of the Company’s business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Shares. The Optionee has
received all such information as the Optionee deems necessary and appropriate
to enable him or her to evaluate the financial risk inherent in making an
investment in the Shares and has received satisfactory and complete information
concerning the business and financial condition of the Company in response to
all inquiries in respect thereof.

2

 

     6.     Termination of Relationship with the Company. Subject to the provisions of
Section 8 hereof, upon termination of the Optionee’s employment, consulting or
other relationship with the Company (as the case may be) for any reason other
than death or Disability, the Optionee shall have the right to exercise this
Option up to the Vested Amount as of the date of termination for a period of
three (3) months from the date of such termination, provided that the Optionee
may only exercise the Option to the extent that the Optionee was entitled to
exercise the Option at the date of such termination.

     7.     Death or Disability of Optionee. Upon the death or Disability of the
Optionee while in the employ of or engagement by the Company (as the case may
be), the Option may be exercised up to the Vested Amount at any time within
twelve (12) months after the date of death or termination due to Disability
provided the Optionee was entitled to exercise the Option at the date of his or
her death or termination due to Disability. In the case of death, the Option
may be exercised by the Optionee’s estate or by a person who acquired the right
to exercise this Option by bequest or inheritance. In the case of Disability,
the Option may be exercised by the Optionee or his or her legal guardian or
representative, but in any case, the Option may be exercised only to the extent
that the Optionee was entitled to exercise the Option at such date; provided,
however, that if such disabled Optionee shall commence any employment or
engagement during such twelve (12) month period with or by a competitor of the
Company (including, but not limited to, full or part-time employment or
independent consulting work), as determined solely in the judgment of the
Administrator, then the Option shall terminate immediately upon the
commencement thereof. To the extent that the Optionee was not entitled to
exercise the Option at the date of termination, or to the extent the Option is
not exercised within the time specified herein, the Option shall terminate.
Notwithstanding the foregoing, the Option shall not be exercisable after the
expiration of the term set forth in Section 2 hereof.

     8.     Forfeiture of Option. Notwithstanding any other provision of this Option
Agreement, (a) if an Optionee’s employment with the Company is terminated by
the Company pursuant to the cause termination provisions of an applicable
employment agreement, or (b) if the Optionee’s employment or consulting
relationship with the Company (as the case may be) is terminated and the Board
makes a determination that the Optionee (i) has engaged in any type of
disloyalty to the Company, including without limitation, fraud, embezzlement,
theft, or dishonesty in the course of his employment or engagement, (ii) has
been convicted of a felony or other crime involving a breach of trust or other
fiduciary duty owed to the Company, (iii) has disclosed trade secrets or
confidential information of the Company, or (iv) has breached any agreement
with the Company in respect of confidentiality, non-disclosure, non-competition
or otherwise, then, at the election of the Board, all unexercised Options shall
terminate. In the event of such an election by the Board, in addition to
immediate termination of all unexercised Options, the Optionee shall forfeit
all Shares for which the Company has not yet delivered share Certificates to
the Optionee and the Company shall refund to the Optionee the Option price paid
to the Company with respect to those Shares. Notwithstanding anything herein
to the contrary, the Company may withhold delivery of share Certificates
pending the resolution of any inquiry that could lead to a determination
resulting in forfeiture.

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     9.     Non-transferability of Option. The Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution, and may be exercised during the lifetime of
the Optionee only by such Optionee. Subject to the foregoing and the terms of
the Plan, the terms of this Option Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.

     10.     Continuation of Employment or Engagement. Neither the Plan nor this Option
Agreement shall confer upon any Optionee any right to continue in the service
of the Company or limit, in any respect, the right of the Company to discharge
or release the Optionee at any time, with or without cause and with or without
notice. For purposes of Sections 6, 7, 8 and 10 “Company,” when used with
reference to the employment or other service of the Optionee, shall mean the
Company and any Affiliate, as applicable.

     11.     Withholding. The Company reserves the right to withhold, in accordance
with any applicable laws, from any consideration payable to the Optionee any
taxes required to be withheld by federal, state or local law as a result of the
grant or exercise of the Option or the sale or other disposition of the Shares
issued upon exercise of the Option. In addition, in the case of an Option
granted to an Optionee who is not subject to the tax laws of the United States,
the Optionee shall also be liable, to the extent permitted by applicable
foreign law, for any taxes imposed under foreign law on the Company or
Affiliate of the Company as a result of the grant or exercise of the Option or
the sale or other disposition of the Shares issued upon exercise of the Option.
If the amount of any consideration payable to the Optionee is insufficient to
pay such taxes or if no consideration is payable to the Optionee, then upon the
request of the Company, the Optionee (or such other person entitled to exercise
the Option pursuant to Section 7 hereof) shall pay to the Company (a) an amount
sufficient for the Company to satisfy any federal, state or local tax
withholding requirements the Company may incur, or (b) an amount equal to any
foreign taxes incurred by the Company or Affiliate of the Company, as a result
of the grant or exercise of the Option or the sale or other disposition of the
Shares issued upon the exercise of the Option.

     12.     The Plan. This Option Agreement is subject to, and the Company and the
Optionee agree to be bound by, all of the terms and conditions of the Plan as
such Plan may be amended from time to time in accordance with the terms
thereof. Pursuant to the Plan, the Administrator is authorized to adopt rules
and regulations not inconsistent with the Plan as it shall deem appropriate and
proper. A copy of the Plan in its present form is available for inspection
during business hours by the Optionee or the persons entitled to exercise the
Option at the Company’s principal office.

     13.     Entire Agreement. This Option Agreement, together with the Plan, and any
other and the other exhibits attached thereto or hereto, represents the entire
agreement between the parties.

     14.     Governing Law. This Option Agreement shall be construed in accordance with
the laws of the State of Delaware, without regard to the application of the
principles of conflicts of laws.

4

 

     15.     Amendment. Subject to the provisions of the Plan, this Option Agreement
may only be amended by a writing signed by each of the parties hereto.

	 	 	 	 	 	 	 
	Date:	 	 	 	 	EXE TECHNOLOGIES, INC
	 	

	 	 	 	 	 
	 	 	 	 	 	By:	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	 	Title:	 
	 	 	 	 	 	 	

5

 

ACKNOWLEDGMENT

     The Optionee acknowledges receipt of a copy of the Plan, a copy of which
is attached hereto, and represents that he or she has read and is familiar with
the terms and provisions thereof, and hereby accepts the Option subject to all
of the terms and provisions thereof. The Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan.

	 	 	 	 	 
	Date:	 	 	 	 
	 	

	 	 	

	 	 	 	 	Signature of Optionee
	 	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name
	 	 	 	 	 
	 	 	 	 	

	 	 	 	 	Address
	 	 	 	 	 
	 	 	 	 	

	 	 	 	 	City, State, Zip

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