Document:

Employment Offer Letter, dated August 16, 2004

 Exhibit 10.1 
  
 GENSYM CORPORATION 
 52 SECOND AVENUE 
 BURLINGTON, MA 01803

  
 August 16, 2004 
  
 Mr. Lowell Hawkinson 
  
 Belmont, MA 
  
 Dear Lowell: 
  
 We are pleased to confirm that effective upon the commencement of employment of Kim Mayyasi as Gensym Corporation’s President and Chief Executive Officer (CEO), you will become Gensym’s Chairman of the Board
(an executive position), reporting to the CEO. Your specific duties as an employee will be determined by you and the CEO for recommendation to and approval by the Board. 
  
 The salary for this position will be at an annualized rate of $275,000, payable semi-monthly and subject to all applicable federal and state
withholding, payroll and other taxes through the end of 2004. In addition, your current Bonus Plan for 2004 will continue. For calendar year 2005, your compensation will be set upon recommendation of the CEO and approval of the Compensation
Committee of the Board in the usual executive compensation process. 
  
 All
regular full-time employees working 30 or more hours per week are eligible to participate in the Company’s benefit package, which consists of medical, dental, life insurance, accidental death and dismemberment, long-term disability, short-term
disability and 401(k). 
  
 Paid-Time-Off (PTO) is accrued on semi-monthly basis
and is based on years of service with the company. You will continue to accrue 25 days per annum. 
  
 During your employment you will be required to devote your best efforts and full business time, skill, and attention to the performance of your duties on behalf of Gensym, and will be prohibited from undertaking any
alternative and/or additional employment or business venture. 
  
 This letter is
not intended to be a contract of employment for a specific period of time. 
  
 If
your employment is terminated without cause, you will continue to receive your base salary and insurance benefits for a severance period. The severance period shall be eighteen months commencing on September 1, 2004 and shall decline to six months
by September 1, 2005 at the rate of one severance month for each calendar month of employment thereafter completed. After September 1, 2005, the severance period shall continue to be six months. 

 Please indicate your acceptance by signing on the signature line below and returning it. 
  
 Sincerely, 
  

	
	 /s/ Robert Degan

	 Robert Degan

	 Chairman of the Compensation Committee

	 For the Gensym Board

  
 Enclosures: 
  

			
	 Accepted:
	 	 /s/ Lowell Hawkinson

	 	 	(Lowell Hawkinson)Employment Offer Letter, dated August 19, 2004

 Exhibit 10.2 
  
 GENSYM CORPORATION 
 52 SECOND AVENUE 
 BURLINGTON, MA 01803

  
 August 19, 2004 
  
 Mr. Kim Mayyasi 
  
 Sudbury, MA 01776 
  
 Dear Kim: 
  
 We are pleased to extend a formal offer of employment to you for the positions of President and Chief Executive Officer (CEO) of Gensym Corporation, based in Burlington, MA, reporting to the Board of Directors. At its
first meeting following your start of employment, the Board will elect you as a Director in Class II with an initial term expiring at the 2007 annual meeting. 
  

The starting salary for this position will be at an annualized rate of $275,000, payable semi-monthly and subject to all applicable federal and state withholding,
payroll and other taxes. In addition, you will participate in a Bonus Plan with an annual incentive bonus of up to 50% of your base salary. If certain financial goals are surpassed, an additional bonus may be earned. Your calendar year 2004 bonus
will be prorated according to your hire date, will be determined and paid after the Quarter 2, 2005 results are known, and will be based on the achievement of 2004 and first half 2005 goals to be agreed upon between you and the Compensation
Committee of the Board by November 1, 2004. For calendar year 2005, your bonus payout potential will be based upon achieving company and individual performance objectives set forth in a plan to be agreed upon between you and the Compensation
Committee of the Board by December 31, 2004. In general, bonus payouts will be made semi-annually as per the goal plan. 
  
 At its first meeting following your start of employment, the Board will grant you stock options for the purchase of 300,000 shares of Gensym Corporation common stock.
Such stock options shall have an exercise price per share equal to the closing price of Gensym shares on the date of grant. The option shall vest in three equal annual installments, beginning on the first anniversary of the date you commence
employment, and will vest fully upon a “change of control,” defined as a merger, consolidation, sale or transfer of the majority of Gensym’s capital stock and/or voting rights. The options shall be non-qualified options. In addition,
the Board will consider an additional option grant in the summer of 2005 in its regular cycle of making such grants to employees. 
  
 All regular full-time employees working 30 or more hours per week are eligible to participate in the Company’s benefit package, which consists of medical, dental,
life insurance, accidental death and dismemberment, long-term disability, short-term disability and 401(k). Upon signing and returning this offer letter, a comprehensive benefits package will be sent to you. 

 Paid-Time-Off (PTO) is accrued on a semi-monthly basis and is based on years of service with the company. All regular
full-time employees accrue 20 days of PTO for the first 12 months of service. Every year thereafter, an additional day is accrued up to a maximum of 25 days. 
  
 All Gensym employees are required to sign an agreement pertaining to non-disclosure, non-competition, and Gensym proprietary information as a condition of employment. A
copy of this agreement is enclosed for your review and execution. 
  
 During your
employment you will be required to devote your best efforts and full business time, skill, and attention to the performance of your duties on behalf of Gensym, and will be prohibited from undertaking any alternate and/or additional employment or
business venture. 
  
 This letter is not intended to be a contract of employment
for a specific period of time. 
  
 If after commencing employment, your employment
is terminated by Gensym without cause, you will continue to receive your base salary and insurance benefits for a severance period. The severance period shall be twelve months. 
  
 We would expect you to start on Monday, August 30, 2004. 
  
 Kim, we are enthusiastic about your joining and leading our organization and we look forward to a mutually rewarding working relationship.
Please indicate your acceptance by signing on the signature line below and returning it. This offer remains in effect through September 1, 2004. 
  
 Sincerely, 
  

	
	 /s/ Lowell Hawkinson

	 Lowell Hawkinson

	 Chairman of the Board

  
 Enclosures: 
  

			
	 Accepted:
	 	 /s/ Kim Mayyasi

	 	 	 (Kim Mayyasi)

	
	 Start Date: August 30, 2004Stock Option Agreement

 Exhibit 10.3 
  
 GENSYM CORPORATION 
  
 Nonstatutory Stock Option Agreement 
  
 1. Grant of Option. 
  
 This agreement evidences the grant by Gensym Corporation, a Delaware corporation (the “Company”), on August 30, 2004 (the “Grant
Date”) to Kim Mayyasi, who has accepted an offer of employment with the Company (the “Participant”), of an inducement option to purchase, in whole or in part, on the terms provided herein, a total of 300,000 shares (the
“Shares”) of common stock, par value $0.01 per share, of the Company (“Common Stock”) at $1.83 per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on August 29, 2014 (the “Final
Exercise Date”). 
  
 It is intended that the option evidenced
by this agreement shall not be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the
term “Participant”, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms. 
  
 2. Vesting Schedule. 
  
 This option will become exercisable (“vest”) as to 33 1/3% of the original number of Shares on the first anniversary of the Grant Date and as to an additional 33 1/3% of the original number of Shares at the end of each successive one-year period following the first anniversary of the Grant Date until the third
anniversary of the Grant Date. 
  
 The right of
exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the
earlier of the Final Exercise Date or the termination of this option under Section 3 hereof. 
  
 3. Exercise of Option. 
  
 (a) Form of Exercise. Each election to exercise this option shall be in writing, signed by the Participant, and received by the Company at its
principal office, accompanied by this agreement, and payment in full in the manner provided in Section 3(b) below. The Participant may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be
for any fractional share or for fewer than ten whole shares. 
  
 (b) Payment upon Exercise. Common Stock purchased upon the exercise of this option shall be paid for as follows: 
  
 (1) in cash or by check, payable to the order of the Company; 
  
 (2) by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a 

 copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a
check sufficient to pay the exercise price and any required tax withholding; 
  
 (3) by delivery of shares of Common Stock owned by the Participant valued at their fair market value as determined by (or in a manner approved by) the Board (“Fair Market Value”), provided (i) such method of
payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such
Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements; or 
  
 (4) by any combination of the above permitted forms of payment. 
  

(c) Commencement of Employment and Continuous Relationship with the Company Required. This option may not be exercised unless the Participant
has commenced employment with the Company on August 30, 2004 (the “Commencement Date”) and, except as otherwise provided in this Section 3, at the time he or she exercises this option, is, and has been at all times since the Commencement
Date, an employee or officer of, or consultant or advisor to, the Company (an “Eligible Participant”). 
  
 (d) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided
in paragraphs (e) and (f) below, the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent
that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to exercise this option shall terminate immediately upon written notice to the Participant from the Company
describing such violation. 
  
 (e) Exercise Period Upon Death
or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (f) below, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized
transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date. 
  
 (f) Discharge
for Cause. If the Participant, prior to the Final Exercise Date, is discharged by the Company for “cause” (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge.
“Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any
employment, consulting, advisory, nondisclosure, non-competition or other 
  

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 similar agreement between the Participant and the Company), as determined by the Company, which determination shall be
conclusive. The Participant shall be considered to have been discharged for “Cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for cause was warranted. 
  
 4. Adjustments for Changes in Common Stock and Certain
Other Events. 
  
 (a) Changes in Capitalization. In
the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any distribution to holders of Common Stock other
than an ordinary cash dividend, the number and class of securities and exercise price per share of this option shall be appropriately adjusted by the Company to the extent determined by the Board.  
  
 (b) Reorganization and Change in Control Events 
  

	 	(1)	Definitions 

  

	 	(a)	A “Reorganization Event” shall mean: 

  
 (i) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is
converted into or exchanged for the right to receive cash, securities or other property or is cancelled; 
  
 (ii) any exchange of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange
transaction; or 
  
 (iii) any liquidation or
dissolution of the Company. 
  

	 	(b)	A “Change in Control Event” shall mean: 

  
 (i) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
“Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the
then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control Event: (A) any acquisition directly from the Company or (B) any
acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (iii) of this definition; or 
  
 (ii) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange
involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, each of the 
  

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 following two conditions is satisfied: (x) all or substantially all of the individuals and entities who
were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of
common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without
limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as
the “Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y)
no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the
Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business
Combination); or 
  
 (iii) the liquidation or
dissolution of the Company. 
  

	 	(2)	Effect on Option 

  
 (a) Reorganization Event. Upon the occurrence of a Reorganization Event (regardless of whether such event also constitutes a Change
in Control Event), or the execution by the Company of any agreement with respect to a Reorganization Event (regardless of whether such event will result in a Change in Control Event), this option shall be assumed, or an equivalent option shall be
substituted, by the acquiring or succeeding corporation (or an affiliate thereof); provided that if such Reorganization Event also constitutes a Change in Control Event, such assumed or substituted option shall be immediately exercisable in full
upon the occurrence of such Reorganization Event. For purposes hereof, this option shall be considered to be assumed if, following consummation of the Reorganization Event, this option confers the right to purchase, for each share of Common Stock
subject to this option immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of
Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock);
provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or
succeeding corporation, provide for the consideration to be received upon the exercise of this option to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in fair market value to the per
share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event. 
  

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 Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an
affiliate thereof) does not agree to assume, or substitute for, this option, or in the event of a liquidation or dissolution of the Company, this option shall, upon written notice to the Participant 20 business days prior to the consummation of such
Reorganization Event, become exercisable in full as of a 15 business days prior to the Reorganization Event and shall terminate immediately prior to the consummation of such Reorganization Event, except to the extent exercised by the Participant
before the consummation of such Reorganization Event; provided, however, in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share of Common Stock
surrendered pursuant to such Reorganization Event (the “Acquisition Price”), then the Board of Directors of the Company may provide that this option shall terminate upon consummation of such Reorganization Event and that the Participant
shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (A) the Acquisition Price multiplied by the number of shares of Common Stock subject to this option (whether or not then exercisable), exceeds (B) the
aggregate exercise price of this option. 
  
 (b)
Change in Control Event that is not a Reorganization Event. Upon the occurrence of a Change in Control Event that does not also constitute a Reorganization Event, this option shall automatically become immediately exercisable in full.

  
 5. Withholding. 
  
 No Shares will be issued pursuant to the exercise of this option unless and
until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Participant. 
  
 6. Nontransferability of Option. 
  
 This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant. 
  
 7. Amendment of Option. The Board may amend, modify or terminate any this option, including but not limited to, substituting herefor another stock incentive ward
of the same or a different type, changing the date of exercise or realization, provided that the Participant’s consent to such action shall be required unless the Board determines that the action, taking into account any related action, would
not materially and adversely affect the Participant. 
  
 8. Conditions on
Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to this option until (i) all conditions of this option have been 
  

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 met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal
matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations. 
  
 9. No Right To Employment or Other Status. The grant of this option shall not be construed as giving a Participant the right to
continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim, except as expressly
provided in this option. 
  
 10. No Rights As Stockholder. The Participant
shall not have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to this option until becoming the record holder of such shares. Notwithstanding the foregoing, in the event the Company effects a
split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to this option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend),
then if the Participant exercises this option between the record date and the distribution date for such stock dividend, the Participant shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend. 
  
 11. Governing Law. The provisions of this option shall be governed by and interpreted in accordance with the laws of the State of
Delaware, without regard to any applicable conflicts of law. 
  
 IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument. 
  

			
	GENSYM CORPORATION
		
	 By:
	 	 /s/ Stephen D. Allison

	 Name:
	 	 Stephen D. Allison

	 Title:
	 	 Chief Financial Officer

  

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 PARTICIPANT’S ACCEPTANCE 
  
 The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. 
  

	
	PARTICIPANT
	
	 /s/ Kim Mayyasi

	 Kim Mayyasi

  

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