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                               GENSYM CORPORATION

                       1995 EMPLOYEE STOCK PURCHASE PLAN
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     The purpose of this Plan is to provide eligible employees of Gensym
Corporation (the "Company") and certain of its subsidiaries with opportunities
to purchase shares of the Company's common stock, $.01 par value per share (the
"Common Stock").  100,000 shares of Common Stock in the aggregate have been
approved for this purpose.

     1.   Administration.  The Plan will be administered by the Company's Board
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of Directors (the "Board") or by a Committee appointed by the Board (the
"Committee").  The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.

     2.   Eligibility.  Participation in the Plan will neither be permitted nor
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denied contrary to the requirements of Section 423 of the Internal Revenue Code
of 1986, as amended (the "Code"), and regulations promulgated thereunder.  All
employees of the Company, including Directors who are employees, and all
employees of any subsidiary of the Company (as defined in Section 424(f) of the
Code) designated by the Board or the Committee from time to time (a "Designated
Subsidiary"), are eligible to participate in any one or more of the offerings of
Options (as defined in Section 9) to purchase Common Stock under the Plan
provided that:

          (a) they are regularly employed by the Company or a Designated
     Subsidiary for more than 20 hours a week and for more than five months in a
     calendar year; and

          (b) they have been employed by the Company or a Designated Subsidiary
     for at least three months (or such number of days as may be determined by
     the Board of Directors or Committee) prior to enrolling in the Plan; and

          (c) they are employees of the Company or a Designated Subsidiary on
     the first day of the applicable Plan Period (as defined below).

     No employee may be granted an Option hereunder if such employee,
immediately after the Option is granted, owns 5% or more of the total combined
voting power or value of the stock of the Company or any subsidiary.  For
purposes of the preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply in determining the stock ownership of an employee, and all
stock which the employee has a contractual right to purchase shall be treated as
stock owned by the employee.
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     3.   Offerings.  The Company will make one or more offerings (each, an
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"Offering" and collectively, "Offerings") to employees to purchase stock under
this Plan.  Offerings will begin on such dates as may be determined by the Board
of Directors or the Committee (the "Offering Commencement Dates").  Each
Offering Commencement Date will begin an approximately six month period (a "Plan
Period") during which payroll deductions will be made and held for the purchase
of Common Stock at the end of the Plan Period.  The Board or the Committee may,
at its discretion, choose different Plan Periods of twelve (12) months or less
for Offerings.

     4.   Participation.  An employee eligible on the Offering Commencement Date
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of any Offering may participate in such Offering by completing and forwarding a
payroll deduction authorization form to the employee's appropriate payroll
office at least seven days prior to the applicable Offering Commencement Date.
The form will authorize a regular payroll deduction from the Compensation
received by the employee during the Plan Period.  Unless an employee files a new
form or withdraws from the Plan, his deductions and purchases will continue at
the same rate for future Offerings under the Plan as long as the Plan remains in
effect.  The term "Compensation" means the amount of money reportable on the
employee's Federal Income Tax Withholding Statement, excluding, to the extent
determined by the Board or the Committee, overtime, shift premium, incentive or
bonus awards, allowances and reimbursements for expenses such as relocation
allowances for travel expenses, income or gains on the exercise of Company stock
options or stock appreciation rights, and similar items, whether or not shown on
the employee's Federal Income Tax Withholding Statement, and including, in the
case of salespersons, sales commissions to the extent determined by the Board or
the Committee.

     5.   Deductions.  The Company will maintain payroll deduction accounts for
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all participating employees.  With respect to any Offering made under this Plan,
an employee may authorize a payroll deduction in any whole number percentage
from 1% to 10% of the Compensation he or she receives during the Plan Period or
such shorter period during which deductions from payroll are made, subject to
such lesser maximum rate as may be determined by the Board of Directors or
Committee prior to the applicable Offering Commencement Date.

     No employee may be granted an Option (as defined in Section 9) which
permits his rights to purchase Common Stock under this Plan and any other stock
purchase plan of the Company and its subsidiaries to accrue at a rate which
exceeds $25,000 of the fair market value of such Common Stock (determined at the
Offering Commencement Date of the Plan Period) for each calendar year in which
the Option is outstanding at any time.

     6.   Deduction Changes.  An employee may decrease or discontinue such
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employee's payroll deduction once during any Plan Period, by filing a new
payroll deduction authorization form.  However, an employee may not increase his
payroll deduction during a Plan Period.  If an employee elects to discontinue
such 
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employee's payroll deductions during a Plan Period, but does not elect to
withdraw such employee's funds pursuant to Section 8 hereof, funds deducted
prior to such employee's election to discontinue will be applied to the purchase
of Common Stock on the Exercise Date (as defined below).

     7.   Interest.  Interest will not be paid on any employee payroll deduction
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accounts, except to the extent that the Board or its Committee, in its sole
discretion, elects to credit such accounts with interest at such per annum rate
as it may from time to time determine.

     8.   Withdrawal of Funds.  An employee may at any time prior to the close
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of business on the last business day in a Plan Period and for any reason
permanently withdraw all of the balance accumulated in the employee's payroll
deduction account and thereby withdraw from participation in an Offering.
Partial withdrawals are not permitted.  The employee may not begin participation
again during the remainder of the Plan Period.  The employee may participate in
any subsequent Offering in accordance with terms and conditions established by
the Board or the Committee, except that employees who are also directors or
officers of the Company within the meaning of Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules promulgated thereunder
may not participate again for a period of at least six months as provided in
Rule 16b-3(d)(2)(i) or any successor provision.

     9.   Purchase of Shares.  On the Offering Commencement Date of each Plan
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Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option (an "Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, such number of whole shares of Common Stock of the Company
reserved for the purposes of the Plan as does not exceed the number of shares
determined by dividing 15% of such employee's annualized Compensation for the
immediately prior six-month period by the price determined in accordance with
the formula set forth in the following paragraph but using the closing price on
the Offering Commencement Date of such Plan Period.

     The purchase price (the "Option Price") for each share purchased will be
85% of the closing price of the Common Stock as reported on the Nasdaq National
Market (or such other national securities exchange or trading system on which
the Company's Common Stock may then be listed or quoted) on (i) the first
business day of such Plan Period or (ii) on the Exercise Date, whichever closing
price shall be less. If no such price is reported on such date, the price of the
Common Stock for purposes of clauses (a) and (b) above shall be the reported
price for the nearest preceding day.

     Each employee who continues to be a participant in the Plan on the Exercise
Date shall be deemed to have exercised his Option at the Option Price on such
date and shall be deemed to have purchased from the Company the number of full
shares of Common Stock reserved for the purpose of the Plan that such employee's
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accumulated payroll deductions on such date will pay for pursuant to the formula
set forth above (but not in excess of the maximum number determined in the
manner set forth above).

     Any balance remaining in an employee's payroll deduction account at the end
of a Plan Period will be automatically refunded to the employee, except that any
balance which is less than the purchase price of one share of Common Stock will
be carried forward into the employee's payroll deduction account for the
following Offering, unless the employee elects not to participate in the
following Offering under the Plan, in which case the balance in the employee's
account shall be refunded.

     10.  Issuance of Certificates.  Certificates representing shares of Common
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Stock purchased under the Plan may be issued only in the name of the employee,
or in the name of the employee and another person of legal age as joint tenants
with rights of survivorship.

     11.  Rights on Retirement, Death, or Termination of Employment.  In the
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event of a participating employee's termination of employment prior to the last
business day of a Plan Period, no payroll deduction shall be taken from any pay
due and owing to an employee and the balance in the employee's payroll deduction
account shall be paid to the employee or, in the event of the employee's death,
(a) to a beneficiary previously designated in a revocable notice signed by the
employee (with any spousal consent required under state law) or (b) in the
absence of such a designated beneficiary, to the executor or administrator of
the employee's estate or (c) if no such executor or administrator has been
appointed to the knowledge of the Company, to such other person(s) as the
Company may, in its discretion, designate. If, prior to the last business day of
the Plan Period, the Designated Subsidiary by which an employee is employed
shall cease to be a subsidiary of the Company, or if the employee is transferred
to a subsidiary of the Company that is not a Designated Subsidiary, the employee
shall be deemed to have terminated employment for the purposes of this Plan.

     12.  Optionees Not Stockholders.  Neither the granting of an Option to an
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employee nor the deductions from such employee's pay shall constitute such
employee a stockholder of the shares of Common Stock covered by an Option under
this Plan until such shares have been purchased by and issued to such employee.

     13.  Rights Not Transferable.  Rights under this Plan are not transferable
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by a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.

     14.  Application of Funds.  All funds received or held by the Company under
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this Plan may be combined with other corporate funds and may be used for any
corporate purpose.
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     15.  Adjustment in Case of Changes Affecting Common Stock.  In the event of
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a subdivision of outstanding shares of Common Stock, or the payment of a
dividend in Common Stock, the number of shares approved for this Plan, and the
share limitation set forth in Section 9, shall be increased proportionately, and
such other adjustment shall be made as may be deemed equitable by the Board or
the Committee.  In the event of any other change affecting the Common Stock,
such adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.

     16.  Merger.  If the Company shall at any time merge or consolidate with
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another corporation and the holders of the capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 80%
by voting power of the capital stock of the surviving corporation ("Continuity
of Control"), 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 entitled to upon
and at the time of such merger, and the Board or the Committee shall take such
steps in connection with such merger as the Board or the Committee shall deem
necessary to assure that the provisions of Section 15 shall thereafter be
applicable, as nearly as reasonably may be, in relation to the said securities
or property as to which such holder of such Option might thereafter be entitled
to receive thereunder.

     In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or of a sale
of all or substantially all of the assets of the Company while unexercised
Options remain outstanding under the Plan, (a) subject to the provisions of
clauses (b) and (c), after the effective date of such transaction, each holder
of an outstanding Option shall be entitled, upon exercise of such Option, to
receive in lieu of shares of Common Stock, shares of such stock or other
securities as the holders of shares of Common Stock received pursuant to the
terms of such transaction; or (b) all outstanding Options may be cancelled by
the Board or the Committee as of a date prior to the effective date of any such
transaction and all payroll deductions shall be paid out to the participating
employees; or (c) all outstanding Options may be cancelled by the Board or the
Committee as of the effective date of any such transaction, provided that notice
of such cancellation shall be given to each holder of an Option, and each holder
of an Option shall have the right to exercise such Option in full based on
payroll deductions then credited to his account as of a date determined by the
Board or the Committee, which date shall not be less than ten (10) days
preceding the effective date of such transaction.

     17.  Amendment of the Plan.  The Board may at any time, and from time to
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time, amend this Plan in any respect, except that (a) if the approval of any
such amendment by the stockholders of the Company is required by Section 423 of
the Code or by Rule 16b-3 under the Exchange Act, such amendment shall not be
effected without such approval, and (b) in no event may any amendment be made
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which would cause the Plan to fail to comply with Section 16 of the Exchange Act
and the rules promulgated thereunder, as in effect from time to time, or Section
423 of the Code.

     18.  Insufficient Shares.  In the event that the total number of shares of
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Common Stock specified in elections to be purchased under any Offering plus the
number of shares purchased under previous Offerings under this Plan exceeds the
maximum number of shares issuable under this Plan, the Board or the Committee
will allot, in such manner as it may determine, the shares then available.

     19.  Termination of the Plan.  This Plan may be terminated at any time by
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the Board.  Upon termination of this Plan all amounts in the payroll deduction
accounts of participating employees shall be promptly refunded.

     20.  Governmental Regulations.  The Company's obligation to sell and
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deliver Common Stock under this Plan is subject to listing on a national stock
exchange or quotation on Nasdaq and the approval of all governmental authorities
required in connection with the authorization, issuance or sale of such stock.

     The Plan shall be governed by Delaware law except to the extent that such
law is preempted by federal law.

     The Plan is intended to comply with the provisions of Rule 16b-3
promulgated under the Securities Exchange Act of 1934.  Any provision
inconsistent with such Rule shall to that extent be inoperative and shall not
affect the validity of the Plan.

     21.  Issuance of Shares.  Shares may be issued upon exercise of an Option
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from authorized but unissued Common Stock, from shares held in the treasury of
the Company, or from any other proper source.

     22.  Notification upon Sale of Shares.  Each employee agrees, by entering
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the Plan, to promptly give the Company notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased.

     23.  Effective Date and Approval of Stockholders.  The Plan shall take
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effect upon the closing of the Company's initial public offering of Common Stock
pursuant to an effective registration statement under Securities Act of 1933, as
amended, subject to approval by the stockholders of the Company as required by
Rule 16b-3 under the Exchange Act and by Section 423 of the Code, which approval
must occur within twelve months of the adoption of the Plan by the Board.

                                    Adopted by the Board of Directors on
                                    November 2, 1995
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                                    Approved by the stockholders on 
                                    January 16, 1995
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                               GENSYM CORPORATION
                               AMENDMENT NO. 1 TO
                       1995 EMPLOYEE STOCK PURCHASE PLAN


     Section 9 of the Company's 1995 Employee Stock Purchase Plan is amended and
restated in its entirety to read as follows:

     9. Purchase of Shares. On the Offering Commencement Date of each Plan
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     Period, the Company will grant to each eligible employee who was then a
     participant in the Plan an option (an "Option") to purchase on the last
     business day of such Plan Period (the "Exercise Date"), at the Option Price
     hereinafter provided for, such number of whole shares of Common Stock of
     the Company reserved for the purposes of the Plan as does not exceed the
     number of shares determined by dividing (i) the quotient of $25,000 divided
     by two (or such other number of Offerings as the Board of Directors may
     determine will be conducted during that calendar year) by (ii) the closing
     price of the Common Stock as reported on the Nasdaq National Market (or
     such other national securities exchange or trading system on which the
     Company's Common Stock may then be listed or quoted) on the Offering
     Commencement Date of such Plan Period.


     Adopted by the Board of Directors on October 29, 1997