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EXHIBIT 10.8
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PROGRESS SOFTWARE CORPORATION
1991 EMPLOYEE STOCK PURCHASE PLAN
(Amended and Restated as of March 10, 1998)
1. PURPOSE
The Progress Software Corporation Employee Stock Purchase Plan (the "Plan")
is intended to provide a method whereby employees of Progress Software
Corporation (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) "Eligible Compensation" for purposes of the Plan means: (i) with
respect to individuals who are hourly employees, base salary plus
payments for overtime and bonuses or (ii) with respect to individuals
who are salaried employees, base salary plus sales commissions and
bonuses. Eligible 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.
(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means the Compensation Committee of the Board.
(d) "Common Stock" means the common stock, $.01 par value per share, of
the Company.
(e) "Company" shall also include any subsidiary of Progress Software
Corporation designated as a participant in the Plan by the Board,
unless the context otherwise requires.
(f) "Employee" means any person who is customarily employed at least 20
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hours per week and more than five months in a calendar year by (i) the
Company or (ii) any subsidiary corporation.
(g) "Subsidiary Corporation" shall mean any present or future corporation
which is or would constitute a "subsidiary corporation" as that term
is defined in Section
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424(f) of the Code.
3. ELIGIBILITY
(a) Participation in the Plan is completely voluntary. Participation
during any one or more of the Offering Periods, as hereafter defined,
under the Plan shall neither limit, nor require, participation during
any other Offering Period.
(b) Each Employee of the Company and its Subsidiary Corporations shall be
eligible to participate in the Plan on any Offering Period
commencement date, as hereafter identified, following the completion
of three months of continuous service with the Company and/or its
Subsidiary Corporations; provided, however, that 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 Corporation;
for purposes of this Paragraph the rules of Section 424(d) of the
Code shall apply in determining stock ownership of any employee;
or
(ii) which permits his/her rights to purchase stock under all Section
423 employee stock purchase plans of the Company and its
Subsidiary Corporations to exceed US $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 PERIOD / EXERCISE PERIOD
The right to purchase stock hereunder shall be made available by a series
of "Exercise Periods" during an "Offering Period" to employees eligible in
accordance with Paragraph 3 hereof.
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Offering Period. Each participant in the Plan will be enrolled in an
Offering Period. An Offering Period has a duration of 27 consecutive months
unless a participant: withdraws from the Plan, ceases to be an eligible
employee, or is automatically transferred to a new Offering Period.
Offering Periods commence on each of the following dates: January 1, April
1, July 1, or October 1.
Exercise Period. Each 27-month Offering Period consists of nine consecutive
Exercise Periods lasting three months each. Exercise Periods start on
January 1, April 1, July 1, and October 1.
Exercise Date. During each 27-month Offering Period there will be nine
Exercise Dates. An Exercise Date is the last date of each Exercise Period.
Therefore, Exercise
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Dates will be as follows: March 31, June 30, September 30, and December 31.
5. PARTICIPATION
Any eligible employee may become a participant by completing a payroll
deduction authorization form provided by the Company and filing it with
their payroll department and the Plan administrator 20 days prior to an
Offering Period commencement date.
A participant may be enrolled in only one Offering Period at a time. A
participant will be re-enrolled automatically as a participant in future
Offering Periods when an Offering Period in which such participant is
currently enrolled ends, unless such participant withdraws from
participation, is terminated or terminates employment, becomes ineligible
to participate for any reason, or the Plan terminates.
6. PAYROLL DEDUCTIONS
(a) At the time a participant files his/her authorization for a payroll
deduction, he/she shall specify a percentage of his/her Eligible
Compensation to be deducted from his/her pay on each payday during any
Offering Period in which he/she is a participant in the Plan. Such
percentage shall be in increments of one percent (1%) up to a maximum
percentage to be established for each Offering Period by the
Committee.
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(b) Payroll deductions for participants shall commence on the Offering
Period commencement date following the effective date of his/her
authorization for such payroll deductions.
(c) A participant may, at any time, reduce the percentage (but not below
1%) of his/her Eligible Compensation to be deducted on each payday
that he/she participates in the Plan. A reduction in payroll
deductions will be effective on the seventh business day following
receipt of notice by the Company and will apply to the first full pay
period commencing after such date.
(d) A participant may, at any time, increase the percentage (but not above
the maximum established by the Committee) of his/her Eligible
Compensation to be deducted on each payday that the he/she
participates in the Plan. An increase in payroll deductions will be
effective on the seventh business day following receipt of notice by
the Company and will apply to the first full Exercise Period
commencing after such date.
(e) All payroll deductions made for a participant shall be credited to
his/her account under the Plan. A participant may not make any
separate cash payment into such account.
7. GRANTING OF OPTION / EXERCISE PRICE
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(a) On the commencement date of each Offering Period, a participant in
such Offering Period shall be deemed to have been granted an option to
purchase on each Exercise Date during such Offering Period (at the per
share exercise price) up to a number of shares of the Company's Common
Stock determined by dividing such participant's payroll deductions
accumulated during the applicable Exercise Period by eighty-five (85%)
of the market value per share of the Company's Common Stock on the
Offering Period commencement date or on the Exercise Date, whichever
is lower, provided that the number of shares subject to the option
shall not exceed 200% of the number of shares determined by dividing
10% of the participant's Eligible Compensation over the Offering
Period (determined as of the Offering Period commencement date) by 85%
of the market value per share of the Company's Common Stock on the
Offering Period commencement date, subject to the limitations set
forth in Section 3 (b) and 12 hereof. The Market value per share of
the Company's Common Stock shall be determined as provided in Section
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7(b) herein.
(b) The exercise price per share to be paid for Common Stock purchased
under the Plan shall be equal to the lower of 85% of the market value
per share of the Common Stock on the first day of the Offering Period
in which the Exercise Date falls, or 85% of the market value per share
of the Common Stock on the Exercise Date. Market value per share of
the Common Stock on a particular date is the closing price (or closing
bid, if no sales were reported) of the Common Stock on the National
Association of Securities Dealers Automated Quotation System, Inc.
("NASDAQ"), or, in the event the Common Stock is listed on a stock
exchange, the market value per share shall be the closing price on
such exchange, for that date, as reported in the Wall Street Journal.
If a closing price is not available for a particular date, then the
market value per share to be used for that date will be the closing
stock price as of the last preceding trading day on the NASDAQ or a
stock exchange for which a closing price is available. If the Common
Stock is not listed on the NASDAQ or a stock exchange then the market
value per share will be determined by the Committee.
For purpose of calculating the number of shares of Common Stock to be
purchased with payroll deductions from participants outside of the
United States, the Company will use the exchange rate published in the
Wall Street Journal on the Exercise Date.
8. EXERCISE OF OPTION
Unless a participant withdraws from the Plan or is terminated from
participating in the Plan pursuant to paragraph 10 hereof, his/her option
for the purchase of Common Stock will be deemed to have been exercised
automatically on each Exercise Date for the purchase of the number of full
shares of Common Stock which the accumulated payroll deductions in his/her
account at that time will purchase at the price of the Common Stock as
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determined in Paragraph 7 (b). Fractional shares will not be issued under
the Plan and any excess funds in a participant's account representing any
fractional shares after Common Stock purchases made on each Exercise Date
will be automatically carried forward to the next Exercise Period unless
the participant elects, by written notice to their payroll department, to
have the excess returned to him/her.
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9. NEW OFFERING PERIOD
If the market value of the Common Stock is lower on an Exercise Date than
it was on the first day of the Offering Period, then all participants in
such Offering Period will be automatically withdrawn from that Offering
Period immediately after the participants' exercise of the option on such
Exercise Date, and such participants will be automatically re-enrolled in a
new Offering Period commencing immediately after that Exercise Date. The
old Offering Period terminates upon such automatic re-enrollment.
10. WITHDRAWAL AND TERMINATION
(a) Prior to the Exercise Date for each Exercise Period, any participant
may withdraw all but not less than all of his/her payroll deductions
under the Plan for such Exercise Period by giving written notice to
his/her payroll department. All of the participant's payroll
deductions credited to such account will be paid to him/her after
receipt of notice of withdrawal, without interest, and no future
payroll deductions will be made. Withdrawal from an Exercise Period
will be deemed to be a withdrawal from the Offering Period which
includes such Exercise Period. 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 may elect not to exercise an option by giving written
notice to their payroll department no less than seven (7) business
days prior to the applicable Exercise Date. Any such election will be
treated as a withdrawal pursuant to section (a) above.
(c) A participant's election not to participate in, or withdrawal from,
any Offering Period or Exercise Period within such Offering Period
will not have any effect upon his/her eligibility to participate in
any succeeding Offering Period or in any similar plan which may
hereafter be adopted by the Company.
(d) Upon termination of the participant's employment for any reason,
including retirement but excluding death, all of his/her payroll
deductions accrued during the relevant Exercise Period will be
returned to the participant.
(e) Upon termination of the participant's employment because of death, the
participant's beneficiary (as defined in Paragraph 14) shall have the
right to elect, by written notice given to the participant's former
payroll department prior to the expiration of a period of 90 days
commencing with the date of the death of the participant but in no
event later than the applicable Offering Period, either
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(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 Exercise Date next following the date of the participant's
death for the purchase of the number of full shares which the
participant's accumulated payroll deductions, at the date of the
participant's death, will purchase at the applicable price, and
any excess deductions will be returned to said beneficiary. In
the event that no such written notice of election shall be duly
received by the appropriate payroll department of the Company,
the beneficiary shall automatically be deemed to have elected to
withdraw the payroll deductions credited to the participant at
the date of the participant's death and the same will be paid
promptly to said beneficiary.
11. INTEREST
No interest will be paid or allowed on any money paid into the Plan or
credited to any participant.
12. STOCK
(a) The maximum number of shares of Common Stock available for issuance
and purchase by participants under the Plan, subject to adjustment
upon changes in capitalization of the Company as provided in Paragraph
17, shall be 500,000 shares of Common Stock, par value $.01 per share,
of the Company. If on a given Exercise Date the number of shares with
respect to which options are to be exercised exceeds the number of
shares then available, 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 each
participant under the Plan carried forward to the next Exercise Period
in the applicable Offering Period or returned to the participant if
the participant so chooses, by giving written notice to their payroll
department to this effect.
(b) The participant will have no interest in stock underlying his/her
option until such option has been exercised.
(c) The Committee, in its sole discretion, may establish a minimum holding
period, if any, for shares of stock acquired pursuant hereto by any
participant or his beneficiary pursuant to Paragraph 14 hereof.
Certificates representing said shares of stock issued pursuant to this
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Plan may bear legends to that effect.
13. ADMINISTRATION
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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.
14. DESIGNATION OF BENEFICIARY
A participant shall file with their payroll department 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 at
the participant's death of a beneficiary validly designated by him under
the Plan, the Company shall deliver such Common Stock and/or cash to such
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 has been designated, acquire any interest in the Common Stock
and/or cash credited to the participant under the Plan.
15. TRANSFERABILITY
Neither payroll deductions credited to a participant 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 10(a).
16. USE OF FUNDS
All payroll deductions received or held by the Company under this Plan may
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be used by the Company for any corporate purpose, and the Company shall not
be obligated to segregate such payroll deductions.
17. 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
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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, with the approval of independent public
accountants and counsel, to be necessary to preserve the rights of the
holder of such option.
18. 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.
19. 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 participant's payroll department.
20. 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 Exercise Date upon the exercise of such
option 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
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entitled to upon and at the time of such merger or consolidation. In
accordance with this Paragraph and Paragraph 17, 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.
21. APPROVAL OF STOCKHOLDERS
The Plan is subject to the approval of the stockholders of the Company 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.
22. 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
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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 favorable federal income tax treatment
afforded employee stock purchase plans under Section 423 of the Code.