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EXHIBIT 3.10 (v)
TERADYNE, INC.
1991 EMPLOYEE STOCK OPTION PLAN
(Amended and Restated as of May 27, 1993)
1. Purpose. This 1991 Employee Stock Option Plan (the "Plan") is
intended to provide incentives (a) to the employees of Teradyne, Inc. (the
"Company"), its parent (if any) and any present or future subsidiaries of the
Company (collectively, "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options which
qualify as "incentive stock options" under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), granted hereunder ("ISO" or "ISOs"); and
(b) to directors, employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase stock in the
Company pursuant to non-statutory stock options granted hereunder ("NSO" or
"NSOs"). Both ISOs and NSOs are referred to hereafter individually as an
"Option" and collectively as "Options." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation" as those
terms are defined in Section 425 of the Code.
2. Administration of the Plan.
A. Board or Committee Administration. the Plan shall be
administered by the Board of Directors of the Company (the "Board") or
by a committee appointed by the Board (the "Committee"); provided, that to
the extent required by Rule 16b-3 of the Securities and Exchange
Commission ("Rule 16b-3") under the Securities and Exchange Act of 1934,
as amended (the "1934 Act"), with respect to specific grants of Options,
the Plan shall be administered by a disinterested administrator or
administrators within the meaning of Rule 16b-3. Hereinafter all
references in this Plan to the "Committee" shall mean the Board if no
Committee has been appointed. Subject to ratification of the grant of each
Option by the Board (if so required by applicable state law), and subject
to the terms of the Plan, the Committee shall have the authority to (i)
determine the employees of the Company and Related Corporations (from
among the class of employees eligible under paragraph 3 to receive ISOs)
to whom ISOs may be granted, and to determine the inividuals and entities
(from among the class of individuals and entities eligible under
paragraph 3 to receive NSOs) to whom NSOs may be granted; (ii) determine
the time or times at which Options may be granted; (iii) determine the
option price of shares subject to each Option; (iv) determine whether each
Option granted shall be an ISO or a NSO; (v) determine (subject to
paragraph 7) the time or times when each Option shall become exercisable
and the duration of the exercise period;
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(vi) determine whether restrictions such as repurchase options are to
be imposed on shares subject to Options, and the nature of such
restrictions if any, and (vii) interpret the Plan and prescribe and
rescind rules and regulations relating to it. The interpretation and
construction by the Committee of any provisions of the Plan or of any
Option granted under it shall be final unless otherwise determined by the
Board. The Committee may from time to time adopt such rules and
regulations for carrying out the Plan as it may deem best. No member of
the Board or the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted under it.
3. Eligible Employees and Others. ISOs may be granted to any employee
of the Company or any Related Corporation. NSOs may be granted to any
employee, consultant or director to the Company or any Related Corporation;
provided, that no Option may be granted hereunder to any non-employee director.
Granting of any Option to any individual or entity shall neither entitle that
individual or entity to, nor disqualify him from, participation in any other
grant of Options.
4. Stock. The stock subject to Options shall be authorized but unissued
shares of Common Stock of the Company, par value $.125 per share (the "Common
Stock"), or shares of Common Stock reacquired by the Company in any manner.
The aggregate number of shares which may be issued pursuant to the Plan is
6,000,000, subject to adjustment as provided in paragraph 13. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, the unpurchased shares subject thereto shall again be available for
grants of Options under the plan.
5. Granting of Options. Options may be granted under the Plan at any
time after March 13, 1991 and prior to March 13, 2001. The date of grant of an
Option under the Plan will be the date specified by the Committee at the time
it grants the Option, provided, however, that such date shall not be prior to
the date on which the Committee acts to approve the grant. The Committee shall
have the right, with the consent of the optionee, to convert an ISO granted
under the Plan to a NSO pursuant to paragraph 16.
6. Minimum Option Price; ISO Limitations.
A. Price for NSOs. The price per share specified in the agreement
relating to each NSO granted under the Plan shall in no event be less than
the minimum legal consideration therefor required under the laws of the
Commonwealth of Massachusetts. No more than 200,000 NSOs may be granted
under the Plan for less than "fair market value" (as hereinafter defined).
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B. Price for ISOs. The price per share specified in the agreement
relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In
the case of an ISO to be granted to an employee owning stock possessing
more than ten percent of the total combined voting power of all classes of
stock of the Company or any Related Corporation, the price per share
specified in the agreement relating to such ISO shall not be less than 110
percent of the fair market value of Common Stock on the date of grant.
C. $100,000 Annual Limitation on ISOs. Each eligible employee may
be granted ISOs only to the extent that, in the aggregate under this Plan
and all incentive stock option plans of the Company and any Related
Corporation, such ISOs do not become exercisable for the first time by
such employee during any calendar year in a manner which would entitle the
employee to purchase more than $100,000 in fair market value (determined
at the time the ISOs were granted) of Common Stock in that year. Any
options granted to an employee in excess of such amount will be granted as
Non-Qualified Options.
D. Determination of Fair Market Value. If, at the time an Option
is granted under the Plan, the Company's Common Stock is publicly traded,
"fair market value" shall be determined as of the date such Option is
granted and shall mean (i) the average (on that date) of the high, low and
closing prices of the Common Stock on the principal national securities
exchange on which the Common Stock is traded, if the Common Stock is then
traded on a national securities exchange; or (ii) the last reported sale
price (on that date) of the Common Stock on the NASDAQ National Market
List, if the Common Stock is not then traded on a national securities
exchange; or (iii) the closing bid price (or average of bid prices) last
quoted (on that date) by an established quotation service or
over-the-counter securities, if the Common Stock is not reported on the
NASDAQ National Market List. However, if the Common Stock is not publicly
traded at the time an Option is granted under the Plan, "fair market
value" shall be deemed to be the fair value of the Common Stock as
determined by the Committee after taking into consideration all factors
which it deems appropriate, including, without limitation, recent sale and
offer prices of the Common Stock in private transactions negotiated at
arm's length.
7. Option Duration. subject to earlier termination as provided in
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than (i) ten years and one day from the date of grant
in the case of NSOs, (ii) ten years from the date of grant in the case of ISOs
generally, and
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(iii) five years form the date of grant in the case of ISOs granted to an
employee owning stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company or any Related Corporation.
Subject to earlier termination as provided in paragraphs 9 and 10, the term of
each ISO shall be the term set forth in the original instrument granting such
ISO, except with respect to any part of such ISO that is converted into a NSO
pursuant to paragraph 16.
8. Exercise of Option. Subject to the provisions of paragraphs 9
through 12, each Option granted under the Plan shall be exercisable as follows:
A. Vesting. The Option shall either be fully exercisable on the
date of grant or shall become exercisable thereafter in such installments
as the Committee may specify.
B. Full Vesting of Installments. Once an installment becomes
exercisable it shall remain exercisable until expiration or termination of
the Option, unless otherwise specified by the Committee.
C. Partial Exercise. Each Option or installment may be exercised
at any time or from time to time, in whole or in part, for up to the total
number of shares with respect to which it is then exercisable.
D. Acceleration of Vesting. The Committee shall have the right to
accelerate the date of exercise of any installment of any Option;
provided, that the Committee shall not, without the consent of the
optionee, accelerate the exercise date of any installment of any Option
granted to any employee as an ISO (and not previously converted into a NSO
pursuant to paragraph 16) if such acceleration would violate the annual
vesting limitation contained in Section 422 of the Code, as described in
paragraph 6(C).
9. Termination of Employment. If an optionee ceases to be employed by
the Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his Options
shall become exercisable, and his Options shall terminate after the passage of
90 days from the date of termination of his employment; provided, that the
Committee may specify that NSOs may remain exercisable for more than 90 days
from the date of termination of employment; provided, further, that in no event
shall any Option or part or installment thereof become or remain exercisable
after its specified expiration date. Employment shall be considered as
continuing uninterrupted during any bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute. A
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bona fide leave of absence with the written approval of the Committee shall not
be considered an interruption of employment under the Plan, provided that such
written approval contractually obligates the Company or any Related Corporation
to continue the employment of the optionee after the approved period of
absence. Options granted under the Plan shall not be affected by any change of
employment within or among the Company and Related Corporations, so long as the
optionee continues to be an employee of the Company or any Related Corporation.
Nothing in the Plan shall be deemed to give any grantee of any Option the right
to be retained in employment or other service by the Company or any Related
Corporation for any period of time.
Notwithstanding anything to the contrary contained above, in the case of
normal retirement, NSOs granted to an optionee shall remain exercisable until
the date which is the earlier of (i) the NSOs' specified expiration date or
(ii) 90 days from the date upon which such optionee becomes employed by a
competitor of the Company, to the extent of the number of shares which have
vested prior to and during such period. The Committee shall have the absolute
discretion to determine whether and as of what date any optionee is employed by
a competitor of the Company.
10. Death; Disability.
A. Death. If an optionee ceases to be employed by the Company and
all Related Corporations by reason of his death, any Option of his may be
exercised, to the extent of the number of shares with respect to which he
has theretofore been granted options (whether or not such options have
vested in accordance with their terms) by his estate, personal
representative or beneficiary who has acquired the Option by will or by
the laws of descent and distribution, (i) in the case of ISOs, at any
time prior to the earlier of the ISOs' specified expiration date or 180
days from the date of the optionee's death or (ii) in the case of NSOs, at
any time prior to the earlier of the NSOs' specified expiration date or
one year from the date of the optionee's death.
B. Disability. If an optionee ceases to be employed by the Company
and all Related Corporations by reason of his disability, any Option
theretofore granted to such optionee shall remain exercisable until the
date which is (i) in the case of ISOs, the earlier of the ISOs' specified
expiration date or 180 days from the date of the termination of the
optionee's employment or (ii) in the case of NSOs, the earlier of the
NSOs' specified expiration date or 33 months from the date of the
termination of the optionee's employment, to the extent of the number of
shares (a) which, in the case of ISOs, have vested prior to and during the
period specified in clause (i) and (b) which, in the case of NSOs, have
vested prior to and during the period which is 30 months from the date the
optionee ceases to be employed by
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the Company. for the purposes of this Plan, the term "disability" shall
mean "permanent and total disability" as defined in Section 22(e)(3) of
the Code or any successor statue.
11. Assignability. No Option shall be assignable or transferable by the
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the optionee each Option shall be exercisable only by him.
12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which ate not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments. The
proper officers of the Company are authorized and directed to take any and all
action necessary or advisable form time to time to carry out the terms of such
instruments.
13. Adjustments. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to him hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such
Option:
A. Stock Dividends and Stock Splits. If the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any Common Stock, the number of shares of
Common Stock deliverable upon the exercise of Options shall be
appropriately increased or decreased proportionately, and appropriate
adjustments shall be made in the purchase price per share to reflect such
subdivision, combination or stock dividend.
B. Consolidations or Mergers. If the Company is to be consolidated
with or acquired by another entity in a merger, sale of all or
substantially all of the Company's assets or otherwise (an "Acquisition"),
the Committee or the board of directors of any entity assuming the
obligations of the Company hereunder (the "Successor Board"), shall, as to
outstanding Options, either (i) make appropriate provision for the
continuation of such Options by substituting on an equitable basis for the
shares then subject to such Options the consideration payable with respect
to the outstanding
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shares of Common Stock in connection with the Acquisition; or (ii) upon written
notice to the Optionees, provide that all Options must be exercised, to the
extent then exercisable, within a specified number of days of the date of such
notice, at the end of which period the Options shall terminate; or (iii)
terminate all optionees in exchange for a cash payment equal to the excess of
the fair market value of the shares subject to such Options (to the extent then
exercisable) over the exercise price thereof.
C. Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph B above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, an optionee upon exercising an Option shall be entitled to
receive for the purchase price paid upon such exercise the securities he would
have received if he had exercised his Option prior to such recapitalization or
reorganization.
D. Modification of ISOs. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs A, B or C with respect to ISOs shall
be made only after the Committee, after consulting with counsel for the
Company, determines whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 425 of the Code) or would
cause any adverse tax consequences for the holders of such ISOs. If the
Committee determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making such
adjustments.
E. Dissolution of Liquidation. In the event of the proposed or
liquidation of the Company, each Option will terminate immediately prior to the
consummation of such proposed action or at such other time and subject to such
other conditions as shall be determined by the Committee.
F. Issuances of Securities. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
G. Fractional Shares. No fractional shares shall be issued under
the Plan and the optionee shall receive from the Company cash in lieu of such
fractional shares.
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H. Adjustments. Upon the happening of any of the events
described in subparagraphs A, B or C above, the class and aggregate
number of shares set forth in paragraph 4 hereof that are subject to
options which previously have been or subsequently may be granted under
the Plan shall also be appropriately adjusted to reflect the events
described in such subparagraphs. The Committee or the Successor Board
this paragraph 13 and, subject to paragraph 2, its determination shall
be conclusive.
If any person or entity owning restricted Common Stock obtained by
exercise of an Option receives shares or securities or cash in connection with
a corporate transaction described in subparagraphs A, B or C above as a result
of owning such restricted Common Stock, such shares or securities or cash shall
be subject to all of the conditions and restrictions applicable to the
restricted Common Stock with respect to which such shares or securities or cash
were issued, unless otherwise determined by the Committee or the Successor
Board.
14. Means of Exercising Options. An Option (or any part or
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Option being
exercised and specify the number of shares as to which such Option is being
exercised, accompanied by full payment of the purchase price therefor either
(a) in United States dollars in cash or by check, or (b) at the discretion of
the Committee, through delivery of shares of Common Stock having fair market
value equal as of the date of the exercise Lo the cash exercise price of the
Option, or (c) at the discretion of the Committee in exceptional cases, by
delivery of the optionee's personnel recourse note bearing interest payable not
less than annually at no less than 100% of the lowest applicable Federal rate,
as defined in Section 1274(d) of the Code, or (d) at the discretion of the
Committee, by any combination of (a), (b) and (c) above. If the Committee
exercises its discretion to permit payment of the exercise price of an ISO by
means of the methods set forth in clauses (b) or (c) of the preceding sentence,
such discretion shall be exercised in writing at the time of the grant of the
ISO in question. Alternatively, payment may be made in whole or in part in
shares of the Common Stock of the Company already owned by the person or
persons exercising the option or shares subject to the option being exercised
(subject to such restrictions and guidelines as the Board may adopt from time
to time), or consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the option and an authorization
to the broker or selling agent to pay that amount to the Company, which sale
shall be at the participant's direction at the time of exercise. The holder of
an Option shall not have the rights of a shareholder with respect to the shares
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covered by his Option until the date of issuance of a stock certificate to him
for such shares. Except as expressly provided above in paragraph 13 with
respect to changes in capitalization and stock dividends, no adjustment shall
be made for dividends or similar rights for which the record date is before the
date such stock certificate is issued.
15. Term and Amendment of Plan. This Plan was adopted by the Board
on March 13, 1991, and shall expire on the end of the day on March 13, 2001
(except as to Options outstanding on that date). The Board may at any time
terminate the Plan or make such modification or amendment thereof as it deems
advisable, provided, however, that the Board may not, without approval by the
affirmative vote of the holders of a majority of the securities of the Company
present, or represented, and entitled to vote at a meeting duly held in
accordance with the applicable laws of the state in which the Company is
incorporated, (i) materially increase the benefits accruing to participants
under the Plan; (ii) increase the number of shares for which options may be
granted under the Plan; or (iii) materially modify the requirements as to
eligibility for participation in the Plan. Termination or any modification or
amendment of the Plan shall not, without consent of a participant, affect his
rights under an option previously granted to him.
16. Conversion of ISOs into NSOs; Termination of ISOs. The
Committee, with the written approval of any optionee, may in its discretion
take such actions as may be necessary to convert such optionee's ISOs (or any
installments of portions of installments thereof) that have not been exercised
on the date of conversion into NSOs at any time prior to the expiration of such
ISOs regardless of whether the optionee is an employee of the Company or a
Related Corporation at the time of such conversion. Such actions may include,
but not be limited to, extending the exercise period or reducing the exercise
price of the appropriate installments of such Options. At the time of such
conversion, the Committee (with the consent of the optionee) may impose such
conditions on the exercise of the resulting NSOs as the Committee in its
discretion may determine, provided that such conditions shall not be
inconsistent with the Plan. Nothing in the Plan shall be deemed to give any
optionee the right to have such optionee's ISOs converted into NSOs, and no
such conversion shall occur until and unless the Committee takes appropriate
action. The Committee, with the consent of the optionee, may also terminate
any portion of any ISO that has not been exercised at the time of such
termination.
17. Application of Funds. The proceeds received by the Company from
the sale of shares pursuant to Options granted under the Plan shall be used for
general corporate purposes.
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18. Governmental Regulation. The Company's obligation to sell and
deliver shares of Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.
19. Withholding of Additional Income Taxes. Upon the exercise of a
NSO, the making of a Disqualifying Disposition (as defined in paragraph 20) or
the vesting of restricted Common Stock acquired on the exercise of an Option,
the Company, in accordance with Section 3402(a) of the Code, may require the
optionee to pay additional withholding in respect of the amount that is
considered compensation includible in such person's gross income. The
Committee in its discretion may condition (i) the exercise of an Option or (ii)
the vesting of restricted Common Stock acquired by exercising an Option, on the
optionee's payment of such additional withholding taxes.
20. Notice to Company of Disqualifying Disposition. Each employee
who receives ISOs shall agree to notify the Company in writing immediately
after the employee makes a disqualifying disposition of any Common Stock
received pursuant to the exercise of an ISO (a "Disqualifying Disposition").
Disqualifying Disposition means any disposition (including any sale) of such
stock before the later of (a) two years after the employee was granted the ISO
under which he acquired such stock, or (b) one year after the employee acquired
such stock by exercising such ISO. If the employee has died before such stock
is sold, these holding period requirements do not apply and no Disqualifying
Disposition will thereafter occur.
21. Governing Laws; Construction. The validity and construction of
the Plan and the instruments evidencing Options shall be governed by the laws
of the Commonwealth of Massachusetts. In construing this Plan, the singular
shall include the plural and the masculine gender shall include the feminine
and neuter, unless the context otherwise requires.