exv4w3



 



Exhibit 4.3



QUALIFIED ACE*COMM

EMPLOYEE STOCK PURCHASE PLAN

As Amended and Restated Effective January 1, 2003



ARTICLE I

PURPOSE



     1.01. Purpose. The Qualified ACE*COMM Employee Stock Purchase Plan (the
“Plan”) is intended to provide a method whereby employees of ACE*COMM
Corporation (the “Company”) and its subsidiary corporations will have an
opportunity to acquire a proprietary interest in the Company through the
purchase of shares of the Common Stock of the Company. It is the intention of
the Company to have the Plan qualify as an “employee stock purchase plan” under
§423 of the Internal Revenue Code of 1986, as amended (the “Code”). The
provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.


ARTICLE II

DEFINITIONS



     2.01 Base Pay. “Base Pay” means regular straight-time earnings excluding
payments for overtime, shift premium, bonuses and other special payments,
commissions and other marketing incentive payments.


     2.02 Board. “Board of Directors” or “Board” means the Board of Directors of the Company.


     2.03 Committee. “Committee” means the individuals described in Article XI.


     2.04 Common Stock. “Common Stock” means the common stock of the Company.


     2.05 Designated Subsidiary Corporation. “Designated Subsidiary
Corporation” means a Subsidiary Corporation which is designated by the
Company’s Board of Directors to participate in the Plan.


     2.06 Employee. “Employee” means any person who is employed by the Company
or a Designated Subsidiary Corporation.


     2.07 Subsidiary Corporation. “Subsidiary Corporation” means any present
or future corporation which would be a “subsidiary corporation” of the Company
as that term is defined in §424 of the Code.


ARTICLE III

ELIGIBILITY AND PARTICIPATION



     3.01 Initial Eligibility. All Employees are eligible to participate
hereunder, commencing on any Offering Commencement Date.


     3.02 Commencement of Participation. An eligible Employee may become a
participant by completing an authorization for a payroll deduction on the form
provided by the Company and filing it with the office of the Human Resources
Director of the Company on or before the date set therefor by the Committee,
which date shall be prior to the Offering Commencement Date for the Offering
(as such terms are defined below). Payroll deductions for a participant shall
commence on the applicable Offering Commencement Date when his 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 Article VIII.


     3.03 Restrictions on Participation. Notwithstanding any provision of the
Plan to the contrary, no Employee shall be granted an option to participate in
the Plan:


 







 



          (a)  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 §424(d)
of the Code shall apply in determining stock ownership of any Employee); or


          (b)  which permits his rights to purchase stock under all employee stock
purchase plans of the Company and its Subsidiary Corporations to accrue at a
rate which exceeds $25,000 in fair market value of the stock (determined at the
time such option is granted) for each calendar year in which such option is
outstanding.


     3.04 Leave of Absence. For purposes of participation in the Plan, a
person on leave of absence shall be deemed to be an Employee for the first 90
days of such leave of absence and such Employee’s employment shall be deemed to
have terminated at the close of business on the 90th day of such leave of
absence unless such Employee shall have returned to regular full-time or
part-time employment (as the case may be) prior to the close of business on
such 90th day. Termination by the Company of any Employee’s leave of absence,
other than termination of such leave of absence on return to full-time or
part-time employment, shall terminate an Employee’s employment for all purposes
of the Plan and shall terminate such Employee’s participation in the Plan and
right to exercise any option.


ARTICLE IV

OFFERINGS



     4.01 Quarterly Offering Periods.


          (a)  Offering Periods. The Plan will be implemented by Offerings in
consecutive Offering Periods, each constituting a calendar quarter. Such
Offering Periods shall continue until the termination of the Plan in accordance
with Section 12.05. The first such Offering Period of the Plan, as amended and
restated, shall be the calendar quarter beginning on January 1, 2003, and
ending on                      March 31, 2003. (Provided, however, that such first Offering
Period will not begin before the effective date of the registration statement
filed by the Company for the amended and restated Plan with the Securities and
Exchange Commission.) Subsequent Offering Periods will consist of successive
calendar quarters.


          (b)  Offering Commencement Date. The Offering Commencement Date is the
first day of an Offering Period during which the NASDAQ system is open for
trading.


          (c)  Offering Termination Date. The Offering Termination Date is the last
day of an Offering Period during which the NASDAQ System is open for trading.


     4.02 Revised Offering Periods. In the discretion of the Committee,
quarterly Offering Periods may be combined into semi-annual or annual Offering
Periods. The maximum number of shares available during an Offering Period
under Section 10.01 shall be adjusted appropriately.


ARTICLE V

PAYROLL DEDUCTIONS



     5.01 Amount of Deduction. At the time a participant files his
authorization for payroll deduction under the Plan, he shall elect to have
deductions made from his pay on each payday during the Offering Period by a
percentage, in whole percentage amounts, of his base pay in effect at any such
payday. Such percentage shall be subject to a maximum of ten percent (10%) of
the participant’s base pay per pay period, or such lower maximum percentage
limit as is determined by the Committee in its sole discretion prior to the
beginning of the Offering Period.


     5.02 Participant’s Account. All payroll deductions made for a participant
shall be credited to his account under the Plan. A participant may not make
any separate cash payment into such account except when on leave of absence and
then only as provided in §5.04.


 






 


     5.03 Changes in Payroll Deductions. A participant may discontinue his
participation in the Plan as provided in Article VIII, but no other change can
be made during an Offering and, specifically, a participant may not alter the
amount of his payroll deductions for that Offering. The payroll deduction
form may provide that it shall continue from Offering Period to Offering Period
unless changed by a participant before the beginning of a subsequent Offering
Period.


     5.04 Leave of Absence. If a participant goes on a leave of absence, such
participant shall have the right to elect: (a) to withdraw the balance in his
or her account pursuant to §7.02, (b) to discontinue contributions to the Plan
but remain a participant in the Plan, or (c) remain a participant in the Plan
during such leave of absence (provided the individual was eligible to
participate at the Offering Commencement Date), authorizing deductions to be
made from payments by the Company or its Designated Subsidiary Corporations to
the participant during such leave of absence and undertaking to make cash
payments to the Plan at the end of each payroll period to the extent that
amounts payable by the Company and its Designated Subsidiary Corporations to
such participant are insufficient to meet such participant’s authorized Plan
deductions.


ARTICLE VI

GRANTING OF OPTION



     6.01 Number of Option Shares. On the Offering Commencement Date of each
Offering, a participating Employee shall be deemed to have been granted a
qualified option to purchase on the Offering Termination Date of such Offering
Period (at the Option Price in Section 6.02) the number of shares of the
Company’s Common Stock determined by dividing such Employee’s payroll
deductions accumulated during such Offering Period and retained in the
participant’s account as of the Offering Termination Date by the applicable
Option Price.


     6.02 Option Price. The Option Price of Common Stock purchased with
payroll deductions made during an Offering Period for a participant therein
shall be the lower of:


          (a)  85% of the closing price of the stock on the Offering Commencement
Date, or (in the event the stock was not traded on such date) the nearest prior
business day on which trading of the Company’s Common Stock occurred, on the
NASDAQ National Market System; or


          (b)  85% of the closing price of the stock on the Offering Termination
Date, or (in the event the stock was not traded on such date) the nearest prior
business day on which trading of the Company’s Common Stock occurred, on the
NASDAQ National Market System. If the Company’s Common Stock is not admitted
to trading on the NASDAQ National Market System on any of the aforesaid dates
for which closing prices of the stock are to be determined, then reference
shall be made to the fair market value of the stock on that date, as determined
on such basis as shall be established or specified for the purpose by the
Committee.


ARTICLE VII

EXERCISE OF OPTION



     7.01 Automatic Exercise. Unless a participant gives written notice to the
Company as hereinafter provided, his option for the purchase of 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 account at that time will purchase at
the applicable Option Price, subject to the maximum stated in Section 10.01.
Except as provided in Section 7.03, any excess in his account at that time will
be refunded to him.


     7.02 Withdrawal of Account. By written notice to the Human Resources
Director of the Company, at any time prior to the Offering Termination Date
applicable to any Offering, a participant may elect to withdraw all of the
accumulated payroll deductions in his account at such time.


     7.03 Fractional Shares. Fractional shares will not be issued under the
Plan. Any accumulated payroll deductions which would have been used to
purchase fractional shares will be carried over and applied to purchase


 






 


shares in the succeeding Offering Period, if the Employee elects to participate
in such Offering Period. If not, such excess payroll deductions will be
promptly returned to the Employee.


     7.04 Transferability of Option. During a participant’s lifetime, options
held by such participant shall be exercisable only by that participant.


     7.05 Delivery of Stock. As promptly as practicable after the Offering
Termination Date of each Offering, the Company will deliver to each
participant, as appropriate, the stock purchased upon exercise of his option.


ARTICLE VIII

WITHDRAWAL



     8.01 In General. As indicated in §7.02, a participant may withdraw
payroll deductions credited to his account under the Plan at any time prior to
an Offering Termination Date by giving written notice to the Human Resources
Director of the Company. All of the participant’s payroll deductions credited
to his account will be paid to him promptly after receipt of his notice of
withdrawal, and no further payroll deductions will be made from his pay during
such Offering. The Company may, at its option, treat any attempt to borrow by
an Employee on the security of his accumulated payroll deductions as an
election, under §7.02, to withdraw such deductions.


     8.02 Effect on Subsequent Participation. A participant’s withdrawal from
any Offering will not have any effect upon his eligibility to participate in
any succeeding Offering or in any similar plan which may hereafter be adopted
by the Company.


     8.03 Termination of Employment. Upon termination of the participant’s
employment for any reason, including retirement or death (but excluding
continuation of a leave of absence for a period beyond 90 days), the payroll
deductions credited to his account will be returned to him, or, in the case of
his death, to the person or persons entitled thereto under §12.01.


ARTICLE IX

INTEREST



     9.01 No Payment of Interest. No interest will be paid or allowed on any
money paid into the Plan or credited to the account of any participating
Employee.


ARTICLE X

STOCK



     10.01 Shares Subject to Plan. The stock subject to the Plan shall be
shares of the Company’s Common Stock, which may be (i) authorized but unissued
shares, (ii) treasury shares and/or (iii) shares purchased on the open market
by a broker designated by the Company. The maximum number of shares of
Common Stock which shall be issued under the Plan, subject to adjustment upon
changes in capitalization of the Company as provided in §12.04, shall be Thirty
Thousand (30,000) shares in each Offering plus in each Offering all unissued
shares from prior Offerings, whether offered or not, not to exceed Four Hundred
Eighty Thousand (480,000) shares for all Offerings. No participant may
purchase more than One Thousand (1,000) shares in any one Offering Period. If
the total number of shares for which options are exercised on any Offering
Termination Date in accordance with Article VI exceeds the maximum number of
shares for the applicable offering, the Company shall make a pro rata
allocation of the shares available for delivery and distribution in as nearly a
uniform manner as shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions credited to the account of
each participant under the Plan shall be returned to him as promptly as
possible.


     10.02 Participant’s Interest in Option Stock. The participant will have
no interest in stock covered by his option until such option has been
exercised.


 






 


     10.03 Issuance of Stock. Stock purchased under the Plan will be issued in
the name of the participant, or, if the participant so directs by written
notice to the Human Resources Director of the Company prior to the Offering
Termination Date applicable thereto, in the names of the participant and one
such other person as may be designated by the participant, as joint tenants
with rights of survivorship or as tenants by the entireties, to the extent
permitted by applicable law.


     10.04 Restrictions on Exercise. The Board of Directors may, in its
discretion, require as conditions to the exercise of any option that the shares
of Common Stock reserved for issuance upon the exercise of the option shall
have been duly listed, upon official notice of issuance, upon a stock exchange,
and that either:


          (a)  a registration statement under the Securities Act of 1933, as amended,
with respect to said shares shall be effective, or


          (b)  the participant shall have represented at the time of purchase, in
form and substance satisfactory to the Company, that it is his intention to
purchase the shares for investment and not for resale or distribution.


ARTICLE XI

ADMINISTRATION



     11.01 Appointment of Committee. The Board of Directors shall appoint a
committee (the “Committee”) to administer the Plan, which shall consist of
either (a) the full Board of Directors or (b) no fewer than two members of the
Board of Directors.


     11.02 Authority of Committee. Subject to the express provisions of the
Plan, the Committee shall have plenary authority in its discretion to interpret
and construe any and all provisions of the Plan, to adopt rules and regulations
for administering the Plan, and to make all other determinations deemed
necessary or advisable for administering the Plan. The Committee’s
determination on the foregoing matters shall be conclusive.


     11.03 Rules Governing the Administration of the Committee. The Board of
Directors may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed and may fill
vacancies, however caused, in the Committee. The Committee may select one of
its members as its Chairman and shall hold its meetings at such times and
places as it shall deem advisable and may hold telephonic meetings. A majority
of its members shall constitute a quorum. All determinations of the Committee
shall be made by a majority of its members. The Committee may correct any
defect or omission or reconcile any inconsistency in the Plan, in the manner
and to the extent it shall deem desirable. Any decision or determination
reduced to writing and signed by a majority of the members of the Committee
shall be as fully effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee may appoint a secretary and shall
make such rules and regulations for the conduct of its business as it shall
deem advisable.


     11.04 Limited Liability; Indemnification. To the maximum extent permitted
by Maryland law, neither the Company, Board or Committee nor any of its members
shall be liable for any action or determination made in good faith with respect
to this Plan. In addition to such other rights of indemnification that they
may have, the members of the Board and Committee shall be indemnified by the
Company to the maximum extent permitted by Maryland law against any and all
liabilities and expenses incurred in connection with their service in
connection with the Plan in such capacity.


ARTICLE XII

MISCELLANEOUS



     12.01 Designation of Beneficiary. A participant may file a written
designation of a beneficiary who is to receive any Common Stock which has not
been issued or cash which is in the participant’s account at the time of the
participant’s death. Such designation of beneficiary may be changed by the
participant at any time by written notice to the Human Resources Director of
the Company. Upon the death of a participant and upon receipt by the Company
of proof of identity and existence at the participant’s death of a beneficiary
validly designated by him


 






 


under the Plan, the Company shall deliver such 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 stock and/or cash to
the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such stock and/or cash to the
spouse or to any one or more dependents of the participant as the Company may
designate. No beneficiary shall, prior to the death of the participant by whom
he has been designated, acquire any interest in the stock or cash credited to
the participant under the Plan.


     12.02 Transferability. Neither payroll deductions credited to a
participant’s account nor any rights with regard to the exercise of an option
or to receive 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 §7.02.


     12.03 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.


     12.04 Adjustment Upon Changes in Capitalization.


          (a)  If, while any options are outstanding, the outstanding shares of
Common Stock of the Company have increased, decreased, changed into, or been
exchanged for a different number or kind of shares or securities of the Company
through reorganization, merger, recapitalization, reclassification, stock
split, reverse stock split or similar transaction, appropriate and
proportionate adjustments may be made by the Committee in the number and/or
kind of shares which are subject to purchase under outstanding options and on
the option exercise price or prices applicable to such outstanding options. In
addition, in any such event, the maximum number and/or kind of shares which may
be offered in the Offerings described in Articles IV and Section 10.01 hereof
shall also be proportionately adjusted. No adjustments shall be made for stock
dividends. For the purposes of this Paragraph, any distribution of shares to
shareholders in an amount aggregating 20% or more of the outstanding shares
shall be deemed a stock split and any distributions of shares aggregating less
than 20% of the outstanding shares shall be deemed a stock dividend.


          (b)  Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all of the property or stock of the Company to
another corporation, the Committee shall take such action as it deems
appropriate and equitable, which action may include, without limitation, one of
the following: (i) refund of payroll deductions for such Offering Period; (ii)
shortening of the Offering Period or (iii) providing that the holder of each
option then outstanding under the Plan will thereafter be entitled to receive
at the next Offering Termination Date upon the exercise of such option for each
share as to which such option shall be exercised, as nearly as reasonably may
be determined, the cash, securities and/or property which a holder of one share
of the Common Stock was entitled to receive upon and at the time of such
transaction. In the event the Plan is continued after such event, the Board of
Directors shall take such steps in connection with such transactions as the
Board shall deem necessary to assure that the provisions of this §12.04 shall
thereafter be applicable, as nearly as reasonably may be determined, in
relation to the said cash, securities and/or property as to which such holder
of such option might thereafter be entitled to receive.


     12.05 Amendment and Termination.


          (a)  Action by Board. The Board of Directors shall have complete power and
authority to terminate or amend the Plan; provided, however, that the Board of
Directors shall not, without the approval of the stockholders of the Company
(i) increase the maximum number of shares which may be issued under the Plan or
under any Offering (except pursuant to §§4.02 and 12.04); or (ii) amend the
requirements as to the class of employees eligible to purchase stock under the
Plan. Upon termination of the Plan during an Offering Period, at the
discretion of the Committee, cash balances in participants accounts may be
refunded or the Offering Termination Date may be accelerated. No termination,
modification, or amendment of the Plan may otherwise, without the


 






 


consent of an Employee then having an option under the Plan to purchase stock,
adversely affect the rights of such Employee under such option.


          (b)  Automatic Termination. The Plan shall automatically terminate on the
earlier of October 1, 2008, or the issuance of the maximum number of shares
available under the Plan pursuant to Section 10.01.


     12.06 Tax Withholding. At the time an option is exercised or at the time
some or all of the Company’s Common Stock issued under the Plan is disposed of,
the participant must make adequate provision for the Company’s federal, state,
or other tax withholding obligations, if any, which 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.


     12.07 Disqualifying Disposition. The Committee may require that a
participant notify the Company of any disposition of shares of Common Stock
purchased under the Plan within a period of two (2) years subsequent to the
respective Offering Commencement Date or one (1) year from the Offering
Termination Date.


     12.08 Effective Date. The Plan, as amended and restated, shall become
effective as of January 1, 2003, subject to approval by the holders of the
majority of the Common Stock present and represented at a special or annual
meeting of the shareholders held during calendar year 2002. If the amended and
restated Plan is not so approved, the Plan shall remain in effect as it existed
prior to such amendment and restatement.


     12.09 No Employment Rights. The Plan does not, directly or indirectly,
create in any Employee or class of Employees any right with respect to
continuation of employment by the Company, and it shall not be deemed to
interfere in any way with the Company’s right to terminate, or otherwise
modify, an Employee’s employment at any time.


     12.10 Exclusion from Retirement and Fringe Benefit Computation. No
portion of the award of options under this Plan, or the proceeds from the sale
of stock purchased under the Plan, shall be taken into account as “wages,”
“salary” or “compensation” for any purpose, whether in determining eligibility,
benefits or otherwise, under (i) any pension, retirement, profit sharing or
other qualified or non-qualified plan of deferred compensation, (ii) any
employee welfare or fringe benefit plan including, but not limited to, group
insurance, hospitalization, medical, and disability, or (iii) any form of
extraordinary pay including, but not limited to, bonuses, sick pay and vacation
pay.


     12.11 Effect of Plan. The provisions of the Plan shall, in accordance
with its terms, be binding upon, and inure to the benefit of, all successors of
each Employee participating in the Plan, including, without limitation, such
Employee’s estate and the executors, administrators or trustees thereof, heirs
and legatees, and any receiver, trustee in bankruptcy or representative of
creditors of such Employee.


     12.12 Expenses. Expenses of administering the Plan shall be borne by the
Company except that brokerage expenses incurred in connection with the purchase
of shares shall be included as part of the cost of the shares to participating
Employees.


     12.13 Governing Law. The law of the State of Maryland will govern all
matters relating to this Plan except to the extent it is superseded by the laws
of the United States.


Date Plan Approved by the Board: October 6, 1998

Date Plan Approved by the Shareholders: November 17, 1998


Date January 1, 2003 Amendment and Restatement Approved by the Board, August 20, 2002

Date January 1, 2003 Amendment and Restatement Approved by the Shareholders, November 13, 2002