EXHIBIT 4
COGNEX CORPORATION
2000 Employee Stock Purchase Plan
1. Purpose.
-------
It is the purpose of this Employee Stock Purchase Plan to provide a
means whereby eligible employees may purchase Common Stock of Cognex Corporation
(the "Company") through after-tax payroll deductions. It is intended to provide
a further incentive for employees to promote the best interests of the Company
and to encourage stock ownership by employees in order that they may participate
in the Company's economic growth. It is the intention, but not the obligation,
of the Company that the Plan qualify as an "employee stock purchase plan" within
the meaning of Section 423 of the Internal Revenue Code, and that the provisions
of this Plan be construed in a manner consistent with the Code.
2. Definitions.
-----------
The following words or terms, when used herein, shall have the
following respective meanings:
(a) "Account" means the Employee Stock Purchase Account
established for a Participant under Section 7 hereunder.
(b) "Compensation" shall mean the sum of the types and amounts of
compensation determined from time to time by the Board
of Directors or Committee in its sole discretion to be
eligible to be taken into account under the Plan, provided
that no such determination shall include or exclude any type
or amount of compensation contrary to the requirements of
Section 423 of the Code.
(c) "Board of Directors" shall mean the Board of Directors of
Cognex Corporation.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
(e) "Committee" shall mean the committee described in Section 5.
(f) "Common Stock" shall mean shares of the Company's common stock
with a par value of $.002 per share.
(g) "Company" shall mean Cognex Corporation, a Massachusetts
corporation.
(h) "Effective Date" shall mean January 1, 2000.
(i) "Eligible Employees" shall mean all persons employed by the
Company or a Subsidiary and classified by the Company
or the Subsidiary as an employee for federal income tax
withholding purposes, but excluding:
(1) Persons who have been employed by the Company or a
Subsidiary for less than six months on the first day
of the Purchase Period;
(2) Persons whose customary employment is less than
twenty hours per week or five months or less
per year; and
(3) Persons who are deemed for purposes of Section
423(b)(3) of the Code to own stock possessing 5% or
more of the total combined voting power or
value of all classes of stock of the Company or a
Subsidiary.
Except as otherwise provided in Section 12, for purposes of the Plan
the employment relationship shall be treated as continuing intact
while an individual is on a sick leave or other leave of absence
approved by the Company or a Subsidiary. Where the period of leave
exceeds 90 days and the individual's right to re-employment is not
guaranteed either by statute or by contract, the employment
relationship shall be deemed to have terminated on the 91st day of
such leave.
(j) "Exercise Date" shall mean the last day of a Purchase Period;
provided, however, that if such date is not a business day,
"Exercise Date" shall mean the immediately preceding business
day.
(k) "Holding Period" shall mean the one-year period after the
Exercise Date during which a Participant may not sell, pledge,
or transfer shares of Common Stock purchased under this Plan
as described in Section 13.
(l) "Participant" shall mean an Eligible Employee who elects to
participate in the Plan under Section 6 hereunder.
(m) "Plan" shall mean the Cognex Corporation 2000 Employee Stock
Purchase Plan.
(n) There shall be two "Purchase Periods" within each of the
Company's fiscal years, one commencing on the first day of
the Company's fiscal year and continuing through the last day
of the first fiscal half year, and the second commencing on
the first day of the Company's second fiscal half year and
continuing through the end of the Company's fiscal year.
(o) "Purchase Price" shall mean the lower of (i) 85% of the fair
market value of a share of Common Stock for the business day
immediately preceding the first day of the relevant Purchase
Period, or (ii) 85% of such value for the business day
immediately preceding the relevant Exercise Date. If the
shares of Common Stock are listed on any national securities
exchange, or traded on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") National Market
System, the fair market value per share of Common Stock on a
particular day shall be the closing price, if any, on the
largest such exchange, or if not traded on an exchange, on
the NASDAQ National Market System, on such day, as reported
in The Wall Street Journal or such other source as the Board
of Directors deems reliable and, if there are no sales of the
shares of Common Stock on such particular day, the fair
market value of a share of Common Stock shall be determined
by taking a weighted average of the closing price on the
nearest date before and the nearest date after the particular
day in accordance with Treasury Regulation Section 25.2512-2.
If the shares of Common Stock are not then listed on any such
exchange or the NASDAQ National Market System, the fair
market value per share of Common Stock on a particular day
shall be the mean between the closing "Bid" and the
closing "Asked" prices, if any, as reported in the National
Daily Quotation Service for such day. If the fair
market value cannot be determined under the proceeding
sentences, it shall be determined in good faith by the Board
of Directors.
(p) "Subsidiary" shall mean any present or future corporation
which (i) would be a subsidiary corporation as defined in
Section 424(f) of the Code, and (ii) is designated by the
Board of Directors as a participating employer for purposes of
this Plan.
3. Grant of Option to Purchase Shares.
----------------------------------
Each Eligible Employee shall be granted an option effective on the
first day of each Purchase Period to purchase shares of Common Stock. The term
of the option shall be the length of the Purchase Period. The number of shares
subject to each option shall be the quotient of the aggregate payroll deductions
in the Purchase Period authorized by each Participant in accordance with Section
6 divided by the Purchase Price, but in no event shall the number of shares
subject to each option be in excess of 3,000 shares per Purchase Period (subject
to adjustment in accordance with Section 4), or such other number of shares as
determined from time to time by the Board of Directors or the Committee.
Notwithstanding the foregoing, no employee shall be granted an option which
permits his right to purchase shares under the Plan to accrue at a rate which
exceeds in any one calendar year $25,000 (or such other amount as may be
prescribed from time to time under Section 423 of the Code) of the fair market
the value of the Common Stock as of the date the option to purchase is granted.
4. Shares.
------
Subject to adjustment upon changes in capitalization of the Company as
provided this Section 4, the maximum number of shares of Common Stock which
shall be made available for issuance to and purchase by Participants under this
Plan shall be 250,000 shares, plus an annual increase in the number of shares to
be added to such pool of shares effective as of the first day of each January
occurring after the Effective Date such that 250,000 outstanding shares of
Common Stock on each such January first will always be available for sale under
this Plan. The shares of Common Stock subject to the Plan shall be either shares
of authorized but unissued Common Stock or shares of Common Stock reacquired by
the Company. Shares of Common Stock not purchased under an option terminated
pursuant to the provisions of the Plan may again be subject to options granted
under the Plan. The aggregate number of shares of Common Stock which may be
purchased pursuant to options granted hereunder, the number of shares of Common
Stock covered by each outstanding option, and the purchase price for each such
option shall be appropriately adjusted for any increase or decrease in the
number of outstanding shares of Common Stock resulting from a stock split or
other subdivision or consolidation of shares of Common Stock or for other
capital adjustments or payments of stock dividends or distributions or other
increases or decreases in the outstanding shares of Common Stock effected
without receipt of consideration by the Company provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board of Directors whose determination in that respect shall be
binding and conclusive. 5. Administration.
The Plan shall be administered by the Board of Directors or a Committee
(which may be the same committee as the Company's compensation committee) as may
be appointed from time to time by the Board of Directors. Committee members
shall be ineligible to participate under the Plan. All members of the Committee
shall serve at the discretion of the Board. The Board of Directors or the
Committee, if one has been appointed, is vested with full authority to interpret
the terms of the Plan, to remedy any ambiguity, inconsistency, or omission, and
to make, administer and interpret such equitable rules and regulations regarding
the Plan as it may deem advisable. The Board of Directors', or the Committee's,
if one has been appointed, determinations as to the interpretation and operation
of the Plan shall be final and conclusive. No member of the Board of Directors
or the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any option granted under the Plan. 6. Election
to Participate.
An Eligible Employee may elect to become a Participant in the Plan for
a Purchase Period by completing a "Stock Purchase Agreement" form prior to the
first day of the Purchase Period for which the election is made. Such Stock
Purchase Agreement shall be in such form as shall be determined from time to
time by the Board of Directors or the Committee. The election to participate
shall be effective for the Purchase Period for which it is made. There is no
limit on the number of Purchase Periods for which an Eligible Employee may elect
to become a Participant in the Plan. In the Stock Purchase Agreement, the
Eligible Employee shall authorize regular payroll deductions of any full
percentage of his Compensation, but in no event less than two percent (2%) nor
more than eight percent (8%) of his Compensation. Except as otherwise provided
in Section 9, an Eligible Employee may not change his authorization during a
Purchase Period to which the election applies. Options granted to Eligible
Employees who have failed to execute a Stock Purchase Agreement within the time
periods prescribed by the Plan will automatically lapse. By electing to
participate in this Plan, each Participant agrees not to sell, pledge, or
transfer shares of Common Stock acquired under this Plan until the expiration of
the Holding Period.
7. Employee Stock Purchase Account.
-------------------------------
An Employee Stock Purchase Account will be established for each
Participant in the Plan for bookkeeping purposes, and payroll deductions made
under Section 6 will be credited to such Accounts. However, prior to the
purchase of shares in accordance with Section 8 or withdrawal from or
termination of the Plan in accordance with the provisions hereof, the Company
may use for any valid corporate purpose all amounts deducted from a
Participant's compensation under the Plan and credited for bookkeeping purposes
to his account. The Company shall be under no obligation to pay interest on
funds credited to a Participant's account, whether upon purchase of shares in
accordance with Section 8 or upon distribution in the event of withdrawal from
or termination of the Plan as herein provided.
8. Purchase of Shares.
------------------
Each Eligible Employee who is a Participant in the Plan automatically
and without any act on his part will be deemed to have exercised his option on
each Exercise Date to the extent that the balance then in his Account under the
Plan is sufficient to purchase at the Purchase Price whole shares of the
Company's stock subject to his option and the limitations described in Section
3. Any balance remaining in the Participant's Account shall be carried forward
and credited for use in the next Purchase Period. If the Employee chooses not to
participate in the next Purchase Period, any balance will be refunded to him in
cash. 9. Withdrawal.
A Participant who has elected to authorize payroll deductions for the
purchase of shares of Common Stock may cancel his election by written notice of
cancellation ("Cancellation") delivered to the office or person designated by
the Company to receive Stock Purchase Agreements, but any such Cancellation must
be so delivered not later than ten (10) days before the relevant Exercise Date.
A Participant will receive in cash, as soon as practicable after delivery of the
Cancellation, the amount credited to his Account. Any Participant who so
withdraws from the Plan may again become a Participant at the start of the next
Purchase Period in accordance with Section 6.
Upon dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving entity every option
outstanding hereunder shall terminate, in which event each Participant shall be
refunded the amount of cash then in his Account.
10. Issuance of Stock Certificates.
------------------------------
The shares of Common Stock purchased by a Participant shall, for all
purposes, be deemed to have been issued and sold at the close of business on the
Exercise Date. Prior to that date none of the rights or privileges of a
stockholder of the Company, including the right to vote or receive dividends,
shall exist with respect to such shares.
Within a reasonable time after the Exercise Date, the Company shall
issue and deliver a certificate for the number of shares of Common Stock
purchased by a Participant for the Purchase Period, which certificate shall be
registered either in the Participant's name, or jointly in the names of the
Participant and his spouse, as the Participant shall designate in his Stock
Purchase Agreement. Such designation may be changed at any time by filing notice
thereof with the person designated by the Company to receive such notices. Each
stock certificate issued shall bear the restrictive legend providing that the
shares represented by the certificate may not be sold, pledged, or transferred
until the expiration of the Holding Period as described in Section 13. 11.
Termination of Employment.
Upon a Participant's termination of employment for any reason, other
than death, no payroll deduction may be made from any compensation due him and
the entire balance credited to his Account shall be automatically refunded, and
his rights under the Plan shall terminate. Upon the death of a Participant, no
payroll deduction shall be made from any compensation due him at time of death,
and the entire balance in the deceased Participant's Account shall be paid in
cash to the Participant's designated beneficiary, if any, under a group
insurance plan of the Company covering such employee, or otherwise to his
estate, and his rights under the Plan shall terminate.
12. Temporary Layoff and Authorized Leave of Absence; Long Term Disability.
----------------------------------------------------------------------
Except as otherwise provided by applicable law, payroll deductions
shall cease during a period of absence from work due to a Participant's
temporary layoff, authorized leave of absence without pay, disability for which
benefits are not payable from the Company or Co-op Programs. If such Participant
shall return to active service prior to the Exercise Date for the current
Purchase Period, payroll deductions shall be resumed. He shall not be entitled
to make up the deficiency in his Account caused by his absence and, accordingly,
the number of shares to be purchased shall be reduced. If the Participant shall
not return to active service prior to the Exercise Date for the current Purchase
Period, and the Participant was absent for more than fifty percent (50%) of the
weeks in the Purchase Period, his Stock Purchase Agreement shall be terminated
and the balance in his Account shall be refunded. All other Participants will
have an option to cancel their election in accordance with Section 9.
13. Rights Not Transferable; Restrictions on Transfer.
-------------------------------------------------
The right to purchase shares of Common Stock under this Plan is
exercisable only by the Participant during his lifetime and is not transferable
by him. If a Participant attempts to transfer his right to purchase shares under
the Plan, he shall be deemed to have requested withdrawal from the Plan and the
provisions of Section 9 hereof shall apply with respect to such Participant. The
shares of Common Stock purchased by a Participant at the close of business on an
Exercise Date may not be sold, pledged, or transferred for a period of one year
after the Exercise Date upon which such shares of Common Stock were purchased.
The stock certificates delivered to the Participant for the number of shares of
Common Stock purchased by a participant shall contain the following restrictive
legend:
"The shares of common stock represented by this certificate may not be
sold, pledged, or transferred for a period of one year from their date
of issuance in accordance with Section 13 of the Corporation's 2000
Employee Stock Purchase Plan."
14. No Guarantee of Continued Employment.
------------------------------------
Granting of an option under this Plan shall imply no right of continued
employment with the Company for any Eligible Employee.
15. Notice.
------
Any notice which an Eligible Employee or Participant files pursuant to
this Plan shall be in writing and shall be delivered personally or by mail
addressed to the Company's Treasurer, c/o Cognex Corporation, One Vision Drive,
Natick, Massachusetts 01760. Any notice to a Participant or an Eligible Employee
shall be conspicuously posted in the Company's principal office or shall be
mailed addressed to the Participant or Eligible Employee at the address
designated in the Stock Purchase Agreement or in a subsequent writing.
16. Application of Funds.
--------------------
All funds deducted from a Participant's compensation in payment for
shares purchased or to be purchased under this Plan may be used for any valid
corporate purpose provided that the Participant's Account shall be credited with
the amount of all payroll deductions as provided in Section 7.
17. Government Approvals or Consents.
--------------------------------
This Plan and any offering and sales to Eligible Employees under it are
subject to any governmental approvals or consents that may be or become
applicable in connection therewith. Subject to the provisions of Section 18, the
Board of Directors may make such changes in the Plan and include such terms in
any offering under this Plan as may be necessary or desirable, in the opinion of
counsel, to comply with the rules or regulations of any governmental authority,
or to be eligible for tax benefits under the Code or the laws of any state, or
in the opinion of the Company's auditors, to eliminate or reduce any unfavorable
financial accounting consequences.
18. Amendment of the Plan.
---------------------
The Board of Directors may, without the consent of the Participants,
amend the Plan at any time, provided that, except as otherwise provided in this
Plan, no such action shall adversely affect options theretofore granted
hereunder. To the extent necessary to comply with Section 423 of the Code (or
any other applicable law, regulation, or stock exchange rule), the Company shall
obtain shareholder approval in such a manner and to such a degree as so
required. For purposes of this Section 18, termination of the Plan by the Board
of Directors pursuant to Section 19 shall not be deemed to be an action which
adversely affects options theretofore granted hereunder.
19. Term of the Plan.
----------------
The Plan shall become effective on the Effective Date, provided that it
is approved within twelve months after adoption by the Board of Directors at a
duly-held stockholder's meeting. The Plan shall continue in effect through the
end of the Company's fiscal year 2009, provided, however, that the Board of
Directors shall have the right to terminate the Plan at any time. In the event
of the expiration of the Plan or its termination, all options then outstanding
under the Plan shall automatically be canceled and the entire amount credited to
the Account of each Participant hereunder shall be refunded to each such
Participant without interest.
20. Notice to Company of Disqualifying Dispositions.
-----------------------------------------------
By electing to participate in the Plan, each Participant agrees to
notify the Company in writing immediately after the Participant transfers Common
Stock acquired under the Plan, if such transfer occurs within two years after
the first business day of the Purchase Period in which such Common Stock was
acquired. Each Participant further agrees to provide any information about such
a transfer as may be requested by the Company or any Subsidiary in order to
assist it in complying with any applicable tax laws. The Participant
acknowledges that the Company may send a W-2, or substitute therefor, as
appropriate, to the Participant with respect to any income recognized by the
Participant upon a disqualifying disposition of Common Stock.
21. Withholding of Taxes.
--------------------
Each Participant must make adequate provision for the Company's
federal, state or other tax withholding obligations, if any, which may arise
upon the exercise of the option or the disposition of the Common Stock. At any
time, the Company may, but shall not be obligated to, withhold from the
Participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Participant.
22. General.
-------
Whenever the context of this Plan permits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
