Employee Stock Purchase Plan

EXHIBIT 10.4



ACTUATE SOFTWARE CORPORATION



1998 EMPLOYEE STOCK PURCHASE PLAN

TABLE OF CONTENTS

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Page

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SECTION 1. PURPOSE OF THE PLAN............................................. 1



SECTION 2. ADMINISTRATION OF THE PLAN...................................... 1

(a) Committee Composition............................................. 1

(b) Committee Responsibilities........................................ 1



SECTION 3. ENROLLMENT AND PARTICIPATION.................................... 1

(a) Offering Periods.................................................. 1

(b) Accumulation Periods.............................................. 1

(c) Enrollment........................................................ 1

(d) Duration of Participation......................................... 1

(e) Applicable Offering Period........................................ 2



SECTION 4. EMPLOYEE CONTRIBUTIONS.......................................... 2

(a) Frequency of Payroll Deductions................................... 2

(b) Amount of Payroll Deductions...................................... 2

(c) Changing Withholding Rate......................................... 3

(d) Discontinuing Payroll Deductions.................................. 3

(e) Limit on Number of Elections...................................... 3



SECTION 5. WITHDRAWAL FROM THE PLAN........................................ 3

(a) Withdrawal........................................................ 3

(b) Re-Enrollment After Withdrawal.................................... 3



SECTION 6. CHANGE IN EMPLOYMENT STATUS..................................... 3

(a) Termination of Employment......................................... 3

(b) Leave of Absence.................................................. 3

(c) Death............................................................. 4



SECTION 7. PLAN ACCOUNTS AND PURCHASE OF SHARES............................ 4

(a) Plan Accounts..................................................... 4

(b) Purchase Price.................................................... 4

(c) Number of Shares Purchased........................................ 4

(d) Available Shares Insufficient..................................... 4

(e) Issuance of Common Stock.......................................... 5

(f) Unused Cash Balances.............................................. 5

(g) Stockholder Approval.............................................. 5



SECTION 8. LIMITATIONS ON STOCK OWNERSHIP.................................. 5

(a) Five Percent Limit................................................ 5

(b) Dollar Limit...................................................... 5



SECTION 9. RIGHTS NOT TRANSFERABLE.......................................... 6



SECTION 10. NO RIGHTS AS AN EMPLOYEE........................................ 6



SECTION 11. NO RIGHTS AS A STOCKHOLDER...................................... 7



SECTION 12. SECURITIES LAW REQUIREMENTS..................................... 7



SECTION 13. STOCK OFFERED UNDER THE PLAN.................................... 7

(a) Authorized Shares.................................................. 7

(b) Anti-Dilution Adjustments.......................................... 7

(c) Reorganizations.................................................... 7



SECTION 14. AMENDMENT OR DISCONTINUANCE..................................... 7



SECTION 15. DEFINITIONS..................................................... 8

(a) Accumulation Period................................................ 8

(b) Board.............................................................. 8

(c) Code............................................................... 8

(d) Committee.......................................................... 8

(e) Common Stock....................................................... 8

(f) Corporation........................................................ 8

(g) Compensation....................................................... 8

(h) Corporate Reorganization........................................... 8

(i) Eligible Employee.................................................. 8

(j) Exchange Act....................................................... 8

(k) Fair Market Value.................................................. 9

(l) IPO

(m) Offering Period.................................................... 9

(n) Participant........................................................ 9

(o) Participating Corporation.......................................... 9

(p) Plan............................................................... 9

(q) Plan Account....................................................... 9

(r) Purchase Price..................................................... 9

(s) Subsidiary......................................................... 9





ACTUATE SOFTWARE CORPORATION

1998 EMPLOYEE STOCK PURCHASE PLAN





SECTION 1. PURPOSE OF THE PLAN.



The Plan was adopted by the Board on _______ __, 1998, to be effective as of the date of the IPO. The purpose of the Plan is to provide Eligible Employees with an opportunity to increase their proprietary interest in the success of the Corporation by purchasing Common Stock from the Corporation on favorable terms and to pay for such purchases through payroll deductions. The Plan is intended to qualify under Section 423 of the Code.



SECTION 2. ADMINISTRATION OF THE PLAN.



(a) COMMITTEE COMPOSITION. The Plan shall be administered by the Committee. The Committee shall consist exclusively of one or more directors of the Corporation, who shall be appointed by the Board.



(b) COMMITTEE RESPONSIBILITIES. The Committee shall interpret the Plan and make all other policy decisions relating to the operation of the Plan. The Committee may adopt such rules, guidelines and forms as it deems appropriate to implement the Plan. The Committee's determinations under the Plan shall be final and binding on all persons.



SECTION 3. ENROLLMENT AND PARTICIPATION.



(a) OFFERING PERIODS. While the Plan is in effect, two overlapping Offering Periods shall commence in each calendar year. The Offering Periods shall consist of the 24-month periods commencing on each February 1 and August 1, except that the first Offering Period shall commence on the date of the IPO and end on July 31, 2000.



(b) ACCUMULATION PERIODS. While the Plan is in effect, two Accumulation Periods shall commence in each calendar year. The Accumulation Periods shall consist of the six-month periods commencing on each February 1 and August 1, except that the first Accumulation Period shall commence on the date of the IPO and end on January 31, 1999.



(c) ENROLLMENT. Any individual who, on the day preceding the first day of an Offering Period, qualifies as an Eligible Employee may elect to become a Participant in the Plan for such Offering Period by executing the enrollment form prescribed for this purpose by the Committee. The enrollment form shall be filed with the Corporation at the prescribed location not later than one business day prior to the commencement of such Offering Period.



(d) DURATION OF PARTICIPATION. Once enrolled in the Plan, a Participant shall continue to participate in the Plan until he or she ceases to be an Eligible Employee, withdraws from the Plan under Section 5(a) or reaches the end of the Accumulation Period in which his or her employee contributions were discontinued under Section 4(d) or 8(b). A Participant who discontinued employee contributions under Section 4(d) or withdrew from the Plan under Section 5(a) may again become a Participant, if he or she then is an Eligible Employee, by following the procedure described in Subsection (c) above. A Participant whose employee contributions were discontinued automatically under Section 8(b) shall automatically resume participation at the beginning of the earliest Accumulation Period ending in the next calendar year, if he or she then is an Eligible Employee.



(e) APPLICABLE OFFERING PERIOD. For purposes of calculating the Purchase Price under Section 7(b), the applicable Offering Period shall be determined as follows:



(i) Once a Participant is enrolled in the Plan for an Offering

Period, such Offering Period shall continue to apply to him or her until

the earliest of (A) the end of such Offering Period, (B) the end of his or

her participation under Subsection (d) above or (C) re-enrollment for a

subsequent Offering Period under Paragraph (ii) or (iii) below.



(ii) In the event that the Fair Market Value of the Common Stock on

the last trading day before the commencement of the Offering Period for

which the Participant is enrolled is higher than on the last trading day

before the commencement of any subsequent Offering Period, the Participant

shall automatically be re-enrolled for such subsequent Offering Period.



(iii) Any other provision of the Plan notwithstanding, the Corporation

(at its sole discretion) may determine prior to the commencement of any new

Offering Period that all Participants shall be re-enrolled for such new

Offering Period.



(iv) When a Participant reaches the end of an Offering Period but his

or her participation is to continue, then such Participant shall

automatically be re-enrolled for the Offering Period that commences

immediately after the e ...