EXHIBIT 10.4
DESKTOP DATA, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
ARTICLE 1 -- PURPOSE.
This 1995 Employee Stock Purchase Plan (the "Plan") is intended to encourage
stock ownership by all eligible employees of Desktop Data, Inc. (the
"Company"), a Delaware corporation, and its participating subsidiaries (as
defined in Article 17) so that they may share in the growth of the Company by
acquiring or increasing their proprietary interest in the Company. The Plan is
designed to encourage eligible employees to remain in the employ of the
Company and its participating subsidiaries. The Plan is intended to constitute
an "employee stock purchase plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code").
ARTICLE 2 -- ADMINISTRATION OF THE PLAN.
The Plan may be administered by a committee appointed by the Board of
Directors of the Company (the "Committee"). The Committee shall consist of not
less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by
the Board of Directors. The Committee may select one of its members as
Chairman, and shall hold meetings at such times and places as it may
determine. Acts by a majority of the Committee, or acts reduced to or approved
in writing by a majority of the members of the Committee, shall be the valid
acts of the Committee.
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it may deem
best, provided that any such rules and regulations shall be applied on a
uniform basis to all employees under the Plan. 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 it.
In the event the Board of Directors fails to appoint or refrains from
appointing a Committee, the Board of Directors shall have all power and
authority to administer the Plan. In such event, the word "Committee" wherever
used herein shall be deemed to mean the Board of Directors.
ARTICLE 3 -- ELIGIBLE EMPLOYEES.
All employees of the Company, any predecessor of the Company or any of its
participating subsidiaries whose customary employment is 20 hours or more per
week and for more than five months in any calendar year and who have completed
one year of employment shall be eligible to receive options under the Plan to
purchase common stock of the Company, and all eligible employees shall have
the same rights and privileges hereunder. Persons who are eligible employees
on the first business day of any Payment Period (as defined in Article 5)
shall receive their options as of such day. Persons who become eligible
employees after any date on which options are granted under the Plan shall be
granted options on the first day of the next succeeding Payment Period on
which options are granted to eligible employees under the Plan. In no event,
however, may an employee be granted an option if such employee, immediately
after the option was granted, would be treated as owning stock possessing five
percent or more of the total combined voting power or value of all classes of
stock of the Company or of any parent corporation or subsidiary corporation,
as the term "parent corporation" and "subsidiary corporation" are defined in
Section 424(e) and (f) of the Code. For purposes of determining stock
ownership under this paragraph, the rules of Section 424(d) of the Code shall
apply, and stock which the employee may purchase under outstanding options
shall be treated as stock owned by the employee.
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ARTICLE 4 -- STOCK SUBJECT TO THE PLAN.
The stock subject to the options under the Plan shall be shares of the
Company's authorized but unissued Common Stock, par value $.01 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company,
including shares purchased in the open market. The aggregate number of shares
which may be issued pursuant to the Plan is 500,000, subject to adjustment as
provided in Article 12. If any option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, the unpurchased shares
subject thereto shall again be available under the Plan.
ARTICLE 5 -- PAYMENT PERIOD AND STOCK OPTIONS.
The first Payment Period during which payroll deductions will be accumulated
under the Plan shall commence on the later to occur of January 1, 1996 and the
first day of the first calendar month following effectiveness of the Form S-8
registration statement filed with the Securities and Exchange Commission
covering the shares to be issued pursuant to the Plan and shall end on June
30, 1996. The Payment Period commencing January 1, 1998 shall end on March 31,
1998. The Payment Period commencing April 1, 1998 shall end on August 31,
1998. Then, for the remainder of the duration of the Plan, Payment Periods
shall consist of the six month periods commencing on March 1 and September 1
and ending on August 31 and February 28 of each calendar year, respectively.
Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option to purchase on the last day of such Payment Period, at the
Option Price hereinafter provided for, a maximum of 250 shares, on condition
that such employee remains eligible to participate in the Plan throughout the
remainder of such Payment Period. The participant shall be entitled to
exercise the option so granted only to the extent of the participant's
accumulated payroll deductions on the last day of such Payment Period. If the
participant's accumulated payroll deductions on the last day of the Payment
Period would enable the participant to purchase more than 250 shares except
for the 250 share limitation, the excess of the amount of the accumulated
payroll deductions over the aggregate purchase price of the 250 shares shall
be promptly refunded to the participant by the Company, without interest,
unless the participant waives the right to receive such excess funds and
agrees to carry forward such excess funds into the next Payment Period. The
Option Price per share for each Payment Period shall be the lesser of (i) 85%
of the average market price of the Common Stock on the first business day of
the Payment Period and (ii) 85% of the average market price of the Common
Stock on the last business day of the Payment Period, in either event rounded
up. The foregoing limitation on the number of shares subject to option and the
Option Price shall be subject to adjustment as provided in Article 12.
For purposes of the Plan, the term "average market price" on any date means
(i) the average (on that date) of the high and low prices of the Common Stock
on the principal national securities exchange on which the Common Stock is
traded, if the Common Stock is then traded on a national securities exchange;
or (ii) the last reported sale price (on that date) of the Common Stock on The
Nasdaq National Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the average of the closing bid and asked prices
last quoted (on that date) by an established quotation service for over-the-
counter securities, if the Common Stock is not reported on The Nasdaq National
Market; or (iv) if the Common Stock is not publicly traded, the fair market
value of the Common Stock as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
For purposes of the Plan, the term "business day" means a day on which there
is trading on The Nasdaq National Market or the aforementioned national
securities exchange, whichever is applicable pursuant to the preceding
paragraph; and if neither is applicable, a day that is not a Saturday, Sunday
or legal holiday in the Commonwealth of Massachusetts.
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No employee shall be granted an option which permits the employee's right to
purchase stock under the Plan, and under all other Section 423(b) employee
stock purchase plans of the Company and any parent or subsidiary corporations,
to accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined on the date or dates that options on such stock were granted) for
each calendar year in which such option is outstanding at any time. The
purpose of the limitation in the preceding sentence is to comply with Section
423(b)(8) of the Code. If the participant's accumulated payroll deductions on
the last day of the Payment Period would otherwise enable the participant to
purchase Common Stock in excess of the Section 423(b)(8) limitation described
in this paragraph, the excess of the amount of the accumulated payroll
deductions over the aggregate purchase price of the shares actually purchased
shall be promptly refunded to the participant by the Company, without
interest.
ARTICLE 6 -- EXERCISE OF OPTION.
Each eligible employee who continues to be a participant in the Plan on the
last day of a Payment Period shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company
such number of full shares of Common Stock reserved for the purpose of the
Plan as the participant's accumulated payroll deductions on such date will pay
for at the Option Price, subject to the 250 share limit of the option and the
Section 423(b)(8) limitation described in Article 5. If the individual is not
a participant on the last day of a Payment Period, then he or she shall not be
entitled to exercise his or her option. Only full shares of Common Stock may
be purchased under the Plan. Unused payroll deductions remaining in a
participant's account at the end of a Payment Period by reason of the
inability to purchase a fractional share shall be carried forward to the next
Payment Period.
ARTICLE 7 -- AUTHORIZATION FOR ENTERING THE PLAN.
An employee may elect to enter the Plan by filling out, signing and
delivering to the Company an authorization:
A. Stating the percentage to be deducted regularly from the employee's
pay;
B. Authorizing the purchase of stock for the employee in each Payment
Period in accordance with the terms of the Plan; and
C. Specifying the exact name or names in which stock purchased for the
employee is to be issued as provided under Article 11 hereof.
Such authorization must be received by the Company at least ten days before
the first day of the next succeeding Payment Period and shall take effect only
if the employee is an eligible employee on the first business day of such
Payment Period.
Unless a participant files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the participant has on
file under the Plan will continue from one Payment Period to succeeding
Payment Periods as long as the Plan remains in effect.
The Company will accumulate and hold for each participant's account the
amounts deducted from his or her pay. No interest will be paid on these
amounts.
ARTICLE 8 -- MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS.
An employee may authorize payroll deductions in an amount (expressed as a
whole percentage) not less than one percent (1%) but not more than ten percent
(10%) of the employee's total compensation, including base pay or salary and
any overtime, bonuses or commissions.
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ARTICLE 9 -- CHANGE IN PAYROLL DEDUCTIONS.
Deductions may not be increased or decreased during a Payment Period.
However, a participant may withdraw in full from the Plan.
ARTICLE 10 -- WITHDRAWAL FROM THE PLAN.
A participant may withdraw from the Plan (in whole but not in part) at any
time prior to the last day of a Payment Period by delivering a withdrawal
notice to the Company.
To re-enter the Plan, an employee who has previously withdrawn must file a
new authorization at least ten days before the first day of the next Payment
Period in which he or she wishes to participate. The employee's reentry into
the Plan becomes effective at the beginning of such Payment Period, provided
that he or she is an eligible employee on the first business day of the
Payment Period.
ARTICLE 11 -- ISSUANCE OF STOCK.
Certificates for stock issued to participants shall be delivered as soon as
practicable after each Payment Period by the Company's transfer agent.
Stock purchased under the Plan shall be issued only in the name of the
participant, or if the participant's authorization so specifies, in the name
of the participant and another person of legal age as joint tenants with
rights of survivorship.
ARTICLE 12 -- ADJUSTMENTS.
Upon the happening of any of the following described events, a participant's
rights under options granted under the Plan shall be adjusted as hereinafter
provided:
A. In the event that the shares of Common Stock shall be subdivided or
combined into a greater or smaller number of shares or if, upon a
reorganization, splitup, liquidation, recapitalization or the like of the
Company, the shares of Common Stock shall be exchanged for other securities
of the Company, each participant shall be entitled, subject to the
conditions herein stated, to purchase such number of shares of Common Stock
or amount of other securities of the Company as were exchangeable for the
number of shares of Common Stock that such participant would have been
entitled to purchase except for such action, and appropriate adjustments
shall be made in the purchase price per share to reflect such subdivision,
combination or exchange; and
B. In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class which
shall at the time be subject to option hereunder, each participant upon
exercising such an option shall be entitled to receive (for the purchase
price paid upon such exercise) the shares as to which the participant is
exercising his or her option and, in addition thereto (at no additional
cost), such number of shares of the class or classes in which such stock
dividend or dividends were declared or paid, and such amount of cash in
lieu of fractional shares, as is equal to the number of shares thereof and
the amount of cash in lieu of fractional shares, respectively, which the
participant would have received if the participant had been the holder of
the shares as to which the participant is exercising his or her option at
all times between the date of the granting of such option and the date of
its exercise.
Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to options
which have been or may be granted under the Plan and the limitations set forth
in the second paragraph of Article 5 shall also be appropriately adjusted to
reflect the events specified in paragraphs A and B above. Notwithstanding the
foregoing, any adjustments made pursuant to paragraphs A or B shall be made
only after the Committee, based on advice of counsel for the Company,
determines whether such adjustments would constitute a "modification" (as that
term is defined in Section 424
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of the Code). If the Committee determines that such adjustments would
constitute a modification, it may refrain from making such adjustments.
If the Company is to be consolidated with or acquired by another entity in a
merger, a sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), the Committee or the board of directors of any
entity assuming the obligations of the Company hereunder (the "Successor
Board") shall, with respect to options then outstanding under the Plan, either
(i) make appropriate provision for the continuation of such options by
arranging for the substitution on an equitable basis for the shares then
subject to such options either (a) the consideration payable with respect to
the outstanding shares of the Common Stock in connection with the Acquisition,
(b) shares of stock of the successor corporation, or a parent or subsidiary of
such corporation, or (c) such other securities as the Successor Board deems
appropriate, the fair market value of which shall not materially exceed the
fair market value of the shares of Common Stock subject to such options
immediately preceding the Acquisition; or (ii) terminate each participant's
options in exchange for a cash payment equal to the excess of (a) the fair
market value on the date of the Acquisition, of the number of shares of Common
Stock that the participant's accumulated payroll deductions as of the date of
the Acquisition could purchase, at an option price determined with reference
only to the first business day of the applicable Payment Period and subject to
the 250 share, Code Section 423(b)(8) and fractional share limitations on the
amount of stock a participant would be entitled to purchase, over (b) the
result of multiplying such number of shares by such option price.
The Committee or Successor Board shall determine the adjustments to be made
under this Article 12, and its determination shall be conclusive.
ARTICLE 13 -- NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS.
An option granted under the Plan may not be transferred or assigned and may
be exercised only by the participant.
ARTICLE 14 -- TERMINATION OF EMPLOYEE'S RIGHTS.
Whenever a participant ceases to be an eligible employee because of
retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan
shall immediately terminate, and the Company shall promptly refund, without
interest, the entire balance of his or her payroll deduction account under the
Plan. Notwithstanding the foregoing, eligible employment shall be treated as
continuing intact while a participant is on military leave, sick leave or
other bona fide leave of absence, for up to 90 days, or for so long as the
participant's right to re-employment is guaranteed either by statute or by
contract, if longer than 90 days.
ARTICLE 15 -- TERMINATION AND AMENDMENTS TO PLAN.
The Plan may be terminated at any time by the Company's Board of Directors
but such termination shall not affect options then outstanding under the Plan.
It will terminate in any case when all or substantially all of the unissued
shares of stock reserved for the purposes of the Plan have been purchased. If
at any time shares of stock reserved for the purpose of the Plan remain
available for purchase but not in sufficient number to satisfy all then
unfilled purchase requirements, the available shares shall be apportioned
among participants in proportion to the amount of payroll deductions
accumulated on behalf of each participant that would otherwise be used to
purchase stock, and the Plan shall terminate. Upon such termination or any
other termination of the Plan, all payroll deductions not used to purchase
stock will be refunded, without interest.
The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the stockholders
of the Company, no amendment may (i) increase the number of shares that may be
issued under the Plan; (ii) change the class of employees eligible to receive
options under the Plan, if such action would be treated as the adoption of a
new plan for purposes of Section 423(b) of the Code; or (iii) cause Rule 16b3
under the Securities Exchange Act of 1934 to become inapplicable to the Plan.
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ARTICLE 16 -- LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN.
The Plan is intended to provide shares of Common Stock for investment and
not for resale. The Company does not, however, intend to restrict or influence
any employee in the conduct of his or her own affairs. An employee may,
therefore, sell stock purchased under the Plan at any time the employee
chooses, subject to compliance with any applicable federal or state securities
laws and subject to any restrictions imposed under Article 21 to ensure that
tax withholding obligations are satisfied. The employee assumes the risk of
any market fluctuations in the price of the stock.
ARTICLE 17 -- PARTICIPATING SUBSIDIARIES.
The term "participating subsidiary" shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424(f) of the
Code, which is designated from time to time by the Board of Directors to
participate in the Plan. The Board of Directors shall have the power to make
such designation before or after the Plan is approved by the stockholders.
ARTICLE 18 -- OPTIONEES NOT STOCKHOLDERS.
Neither the granting of an option to an employee nor the deductions from his
or her pay shall constitute such employee a stockholder of the shares covered
by an option until such shares have been actually purchased by the employee.
ARTICLE 19 -- APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan will be used for general corporate purposes.
ARTICLE 20 -- NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
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 Payment Period in which such Common Stock was
acquired under the Plan, if such transfer occurs within two years after the
first business day of the Payment 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
corporation in order to assist it in complying with the tax laws. Such
dispositions generally are treated as "disqualifying dispositions" under
Sections 421 and 424 of the Code, which have certain tax consequences to
participants and to the Company and its participating subsidiaries.
ARTICLE 21 -- WITHHOLDING OF ADDITIONAL INCOME TAXES.
By electing to participate in the Plan, each participant acknowledges that
the Company and its participating subsidiaries are required to withhold taxes
with respect to the amounts deducted from the participant's compensation and
accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant's compensation, when amounts
are added to the participant's account, used to purchase Common Stock or
refunded, in order to satisfy such withholding obligations. Each participant
further acknowledges that when Common Stock is purchased under the Plan the
Company and its participating subsidiaries may be required to withhold taxes
with respect to all or a portion of the difference between the fair market
value of the Common Stock purchased and its purchase price, and each
participant agrees that such taxes may be withheld from compensation otherwise
payable to such participant. It is intended that tax withholding will be
accomplished in such a manner that the full amount of payroll deductions
elected by the participant under Article 7 will be used to purchase Common
Stock. However, if amounts sufficient to satisfy applicable tax withholding
obligations have not been withheld from compensation otherwise payable to any
participant, then, notwithstanding any other
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provision of the Plan, the Company may withhold such taxes from the
participant's accumulated payroll deductions and apply the net amount to the
purchase of Common Stock, unless the participant pays to the Company, prior to
the exercise date, an amount sufficient to satisfy such withholding
obligations. Each participant further acknowledges that the Company and its
participating subsidiaries may be required to withhold taxes in connection
with the disposition of stock acquired under the Plan and agrees that the
Company or any participating subsidiary may take whatever action it considers
appropriate to satisfy such withholding requirements, including deducting from
compensation otherwise payable to such participant an amount sufficient to
satisfy such withholding requirements or conditioning any disposition of
Common Stock by the participant upon the payment to the Company or such
subsidiary of an amount sufficient to satisfy such withholding requirements.
ARTICLE 22 -- GOVERNMENTAL REGULATIONS.
The Company's obligation to sell and deliver shares of Common Stock under
the Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
identify shares of Common Stock issued under the Plan on its stock ownership
records and send tax information statements to employees and former employees
who transfer title to such shares.
ARTICLE 23 -- GOVERNING LAW.
The validity and construction of the Plan shall be governed by the laws of
the Commonwealth of Massachusetts, without giving effect to the principles of
conflicts of law thereof.
ARTICLE 24 -- APPROVAL OF BOARD OF DIRECTORS AND STOCKHOLDERS OF THE COMPANY.
The Plan was adopted by the Board of Directors on June 16, 1995 and was
approved by the stockholders of the Company on June 22, 1995.
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