AMENDED AND RESTATED
OBJECT DESIGN, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The Object Design, Inc. 1996 Employee Stock Purchase Plan (the "Plan")
is intended to provide a method whereby employees of Object Design,
Inc. (the "Company") will have an opportunity to acquire an ownership
interest (or increase an existing ownership interest) in the Company
through the purchase of shares of the Common Stock of the Company. It
is the intention of the Company that the Plan qualify as an "employee
stock purchase plan" under Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"). The provisions of the Plan shall,
accordingly, be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of the Code.
2. DEFINITIONS.
(a)"Board" means the Board of Directors of the Company.
(b) "Code" shall have the meaning set forth in Paragraph 1.
(c) "Committee" means the Compensation Committee of the Board.
(d) "Common Stock" means the common stock, par value $.001 per share,
of the Company.
(e) "Company" shall also include any Subsidiary (as hereinafter
defined) of Object Design, Inc. designated as a participant in the Plan
by the Board, unless the context otherwise requires.
(f) "Compensation" means, for the purpose of any Offering pursuant to
this Plan, base pay in effect as of the Offering Commencement Date (as
hereinafter defined). Compensation shall not include any deferred
compensation other than contributions by an individual through a salary
reduction agreement to a cash or deferred plan pursuant to Section
401(k) of the Code or to a cafeteria plan pursuant to Section 125 of
the Code.
(g) "Employee" means any person who is customarily employed by the
Company for more than 20 hours per week and more than five months in
any calendar year.
(h) "Offering" shall have the meaning set forth in Paragraph 4.
(i) "Offering Commencement Date" shall have the meaning set forth in
Paragraph 4.
(j) "Offering Termination Date" shall have the meaning set forth in
Paragraph 4.
(k) "Plan" shall have the meaning set forth in Paragraph 1.
(l) "Subsidiary" shall mean any present or future corporation which is
or would constitute a "subsidiary corporation" as that term is defined
in Section 425 of the Code.
3. ELIGIBILITY
(a) Participation in the Plan is completely voluntary. Participation in
any one or more of the Offerings under the Plan shall neither limit,
nor require, participation in any other Offering (as hereinafter
defined).
(b) Each employee of the Company whose service with the Company
commences on or after November 1, 1996 shall be eligible to participate
in the Plan on the first Offering Commencement Date, as hereinafter
defined, following the completion of six months of continuous service
with the Company. Each employee of the Company whose service with the
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Company commenced prior to November 1, 1996 shall be eligible to
participate in the Plan on the first Offering Commencement Date
following the commencement of service with the Company. Notwithstanding
the foregoing, no employee shall be granted an option under the Plan:
(i) if, immediately after the grant, such employee would own stock,
and/or hold outstanding options to purchase stock, possessing 5% or
more of the total combined voting power or value of all classes of
stock of the Company or any Subsidiary; for purposes of this Paragraph,
the rules of Section 424(d) of the Code shall apply in determining the
stock ownership of any employee; or
(ii) which permits his rights to purchase stock under all Section 423
employee stock purchase plans of the Company and its Subsidiaries to
exceed $25,000 of the fair market value of the stock (determined at the
time such option is granted) for each calendar year in which such
option is outstanding; for purposes of this Paragraph, the rules of
Section 423(b)(8) of the Code shall apply.
4. OFFERING DATES.
The right to purchase stock hereunder shall be made available by a
series of six-month offerings (the "Offering" or "Offerings") to
employees eligible in accordance with Paragraph 3 hereof. The Committee
will, in its discretion, determine the applicable date of commencement
("Offering Commencement Date") and termination date ("Offering
Termination Date") for each Offering. Participation in any one or more
of the Offerings under the Plan shall neither limit, nor require,
participation in any other Offering.
5. PARTICIPATION.
Any eligible employee may become a participant by completing a payroll
deduction authorization form provided by the Company and filing it with
the Company's Treasurer 20 days prior to each applicable Offering
Commencement Date, as determined by the Committee pursuant to Paragraph
4.
6. PAYROLL DEDUCTIONS
(a) At the time a participant files an authorization for a payroll
deduction, the participant shall elect to have deductions made from his
or her pay on each payday during any Offering in which he or she is a
participant, at a specified percentage of his or her Compensation as
determined on the applicable Offering Commencement Date; said
percentage shall be in increments of one percent up to a maximum
percentage of six percent.
(b) Payroll deductions for a participant shall commence on the Offering
Commencement Date when the applicable authorization for a payroll
deduction becomes effective and shall end on the Offering Termination
Date of the Offering to which such authorization is applicable, unless
sooner terminated by the participant as provided in Paragraph 9.
(c) All payroll deductions made for a participant shall be credited to
his or her account under the Plan. A participant may not make any
separate cash payment into such account.
(d) A participant may withdraw from the Plan at any time during the
applicable Offering period.
7. GRANTING OF OPTION.
(a) On the Offering Commencement Date of each Offering, a participating
employee shall be deemed to have been granted an option to purchase a
maximum number of shares of the Common Stock equal to an amount
determined as follows: (i) 85% of the market value per share of the
Common Stock on the applicable Offering Commencement Date shall be
divided into an amount equal to the sum of (x) the percentage of the
employee's Compensation which he or she has elected to have withheld
(multiplied by the employee's Compensation over the Offering period)
plus (y) any amounts in the employee's account on the Offering
Commencement Date that have been carried forward from prior Offerings;
multiplied by (ii) two. Such market value per share of the Common Stock
shall be determined as provided in clause (i) of Paragraph 7(b).
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(b) The option price of the Common Stock purchased with payroll
deductions made during each such Offering for a participant therein
shall be the lower of:
(i) 85% of the average of the bid and the asked prices as
reported by Nasdaq in the Wall Street Journal, or, if the
Common Stock is designated as a national market security by
the National Association of Securities Dealers, Inc. ("NASD"),
the last trading price of the Common Stock as reported by the
Nasdaq National Market System in the Wall Street Journal, or,
if the Common Stock is listed on an exchange, the closing
price of the Common Stock on the exchange on the Offering
Commencement Date applicable to such Offering (or on the next
regular business date on which shares of the Common Stock
shall be traded, in the event that no shares of the Common
Stock have been traded on the Offering Commencement Date); or
if the Common Stock is not quoted on Nasdaq, not designated as
a Nasdaq national market security and not listed on an
exchange, 85% of the fair market value on the Offering
Commencement Date as determined by the Committee; and
(ii) 85% of the average of the bid and the asked prices as
reported by Nasdaq in the Wall Street Journal, or, if the
Common Stock is designated as a national market security by
the NASD, the last trading price of the Common Stock as
reported by the Nasdaq National Market System in the Wall
Street Journal, or, if the Common Stock is listed on an
exchange, the closing price of the Common Stock on the
exchange on the Offering Termination Date applicable to such
Offering (or on the next regular business date on which shares
of the Common Stock shall be traded, in the event that no
shares of the Common Stock shall have been traded on the
Offering Termination Date); or if the Common Stock is not
quoted on Nasdaq, not designated as a Nasdaq national market
security and not listed on an exchange, 85% of the fair market
value on the Offering Termination Date as determined by the
Committee.
8. EXERCISE OF OPTION.
(a) Unless a participant gives written notice to the Treasurer of the
Company as hereinafter provided, his or her option for the purchase of
Common Stock with payroll deductions made during any Offering will be
deemed to have been exercised automatically on the Offering Termination
Date applicable to such Offering for the purchase of the number of full
shares of Common Stock which the accumulated payroll deductions in his
or her account at that time (plus any amounts in his or her account
that have been carried forward from prior Offerings) will purchase at
the applicable option price (but not in excess of the number of shares
for which options have been granted to the employee, pursuant to
Paragraph 7(a)), and any excess in his account at that time will be
automatically carried forward to the next Offering unless the
participant elects, by written notice to the Treasurer of the Company,
to have the excess returned to the participant.
(b) Fractional shares will not be issued under the Plan and any
accumulated payroll deductions which would have been used to purchase
fractional shares shall be automatically carried forward to the next
Offering unless the participant elects, by written notice to the
Treasurer of the Company, to have the excess cash returned to the
participant.
9. WITHDRAWAL AND TERMINATION
(a) Prior to the Offering Termination Date for an Offering, any
participant may withdraw the payroll deductions credited to his or her
account under the Plan for such Offering by giving written notice to
the Treasurer of the Company. All of the participant's payroll
deductions credited to such account will be paid to the participant
promptly after receipt of notice of withdrawal, without interest, and
no future payroll deductions will be made from his or her pay during
such Offering. The Company will treat any attempt to borrow by a
participant on the security of accumulated payroll deductions as an
election to withdraw such deductions.
(b) A participant's election not to participate in, or withdrawal from,
any Offering will not have any effect upon his or her eligibility to
participate in any succeeding Offering or in any similar plan which may
hereafter be adopted by the Company.
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(c) Upon termination of the participant's employment for any reason,
including retirement but excluding death, the payroll deductions
credited to his or her account will be returned to the participant, or,
in the case of his or her death, to the person or persons entitled
thereto under Paragraph 13.
(d) Upon termination of the participant's employment because of death,
his or her beneficiary (as defined in Paragraph 13) shall have the
right to elect, by written notice given to the Company's Treasurer
prior to the expiration of a period of 90 days commencing with the date
of the death of the participant, either:
(i) to withdraw all of the payroll deductions credited to the
participant's account under the Plan; or
(ii) to exercise the participant's option for the purchase of
stock on the Offering Termination Date next following the date
of the participant's death for the purchase of the number of
full shares which the accumulated payroll deductions in the
participant's account at the date of the participant's death
will purchase at the applicable option price, and any excess
in such account will be returned to said beneficiary. In the
event that no such written notice of election shall be duly
received by the office of the Company's Treasurer, the
beneficiary shall automatically be deemed to have elected to
withdraw the payroll deductions credited to the participant's
account at the date of the participant's death and the same
will be paid promptly to said beneficiary.
10. INTEREST.
No interest will be paid or allowed on any money paid into the Plan or
credited to the account of any participating employee.
11. STOCK.
(a) The maximum number of shares of Common Stock available for issuance
and purchase by employees under the Plan, subject to adjustment upon
changes in capitalization of the Company as provided in Paragraph 16,
shall be 700,000 shares of Common Stock, $.001 par value per share, of
the Company. If the total number of shares for which options are
exercised on any Offering Termination Date in accordance with Paragraph
8 exceeds the number of shares that remain available for issuance and
purchase by employees under the Plan, the Company shall make a pro rata
allocation of the shares available for delivery and distribution in an
equitable manner, with the balances of payroll deductions credited to
the account of each participant under the Plan returned to each
participant.
(b) The participant will have no interest in the stock covered by his
or her option until such option has been exercised.
12. ADMINISTRATION.
The Plan shall be administered by the Committee. The interpretation and
construction of any provision of the Plan and adoption of rules and
regulations for administering the Plan shall be made by the Committee.
Determinations made by the Committee with respect to any matter or
provision contained in the Plan shall be final, conclusive and binding
upon the Company and upon all participants, their heirs or legal
representatives. Any rule or regulation adopted by the Committee shall
remain in full force and effect unless and until altered, amended, or
repealed by the Committee.
13. DESIGNATION OF BENEFICIARY.
A participant shall file with the Treasurer of the Company a written
designation of a beneficiary who is to receive any Common Stock and/or
cash under the Plan. Such designation of beneficiary may be changed by
the participant at any time by written notice. Upon the death of a
participant and upon receipt by the Company of proof of the identity
and existence of a beneficiary validly designated by the participant
under the Plan, the Company shall deliver such Common Stock and/or cash
to such beneficiary. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is
living at the time of such participant's death, the Company shall
deliver such Common Stock and/or cash to the executor or administrator
of the estate of the participant. No beneficiary shall, prior to the
death of the participant by whom he or she has been designated, acquire
any interest in the Common Stock and/or cash credited to the
participant under the Plan.
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14. TRANSFERABILITY.
Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive Common
Stock under the Plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the participant other than by will
or the laws of descent and distribution. Any such attempted assignment,
transfer, pledge, or other disposition shall be without effect, except
that the Company may treat such act as an election to withdraw funds in
accordance with Paragraph 8(b).
15. USE OF FUNDS.
All payroll deductions received or held by the Company under this Plan
may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such payroll deductions.
16. EFFECT OF CHANGES OF COMMON STOCK
If the Company shall subdivide or reclassify the Common Stock which has
been or may be optioned under this Plan, or shall declare thereon any
dividend payable in shares of such Common Stock, or shall take any
other action of a similar nature affecting such Common Stock, then the
number and class of shares of Common Stock which may thereafter be
optioned (in the aggregate and to any participant) shall be adjusted
accordingly and in the case of each option outstanding at the time of
any such action, the number and class of shares which may thereafter be
purchased pursuant to such option and the option price per share shall
be adjusted to such extent as may be determined by the Committee,
following consultation with the Company's independent public
accountants and counsel, to be necessary to preserve the rights of the
holder of such option.
17. AMENDMENT OR TERMINATION.
The Board may at any time terminate or amend the Plan. No such
termination shall affect options previously granted, nor may an
amendment make any change in any option theretofore granted which would
adversely affect the rights of any participant holding options under
the Plan.
18. NOTICES.
All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly
given when received by the Treasurer of the Company.
19. MERGER OR CONSOLIDATION.
If the Company shall at any time merge into or consolidate with another
corporation, the holder of each option then outstanding will thereafter
be entitled to receive at the next Offering Termination Date, upon the
exercise of such option and for each share as to which such option
shall be exercised, the securities or property which a holder of one
share of the Common Stock was entitled to upon and at the time of such
merger or consolidation. In accordance with this Paragraph and
Paragraph 16, the Committee shall determine the kind and amount of such
securities or property which such holder of an option shall be entitled
to receive. A sale of all or substantially all of the assets of the
Company shall be deemed a merger or consolidation for the foregoing
purposes.
20. APPROVAL OF STOCKHOLDERS.
The Plan is subject to the approval of the stockholders of the Company
by written consent or at their next annual meeting or at any special
meeting of the stockholders for which one of the purposes of such a
special meeting shall be to act upon the Plan.
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21. GOVERNMENTAL AND OTHER REGULATIONS.
The Plan, and the grant and exercise of the rights to purchase shares
hereunder, and the Company's obligation to sell and deliver shares upon
the exercise of rights to purchase shares, shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and
to such approvals by any regulatory or governmental agency as may, in
the opinion of counsel for the Company, be required. The Plan shall be
governed by, and construed and enforced in accordance with, the
provisions of Sections 421, 423 and 424 of the Code and the substantive
laws of The Commonwealth of Massachusetts. In the event of any
inconsistency between such provisions of the Code and any such laws,
said provisions of the Code shall govern to the extent necessary to
preserve the favorable federal income tax treatment afforded employee
stock purchase plans under Section 423 of the Code.
