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Appendix A
LTX CORPORATION
1990 INCENTIVE STOCK OPTION PLAN, AS AMENDED
1. DEFINITIONS. As used in this 1990 Incentive Stock Option Plan of LTX
Corporation, the following terms shall have the following meanings:
1.1 BOARD means the Company's Board of Directors.
1.2 CODE means the Federal Internal Revenue Code of 1986,
as amended.
1.3 COMPANY means LTX Corporation.
1.4 FAIR MARKET VALUE means the value of a share of Stock of
the Company on any date as determined by the Board.
1.5 GRANT DATE means the date on which an Option is granted, as
specified in Section 7.
1.6 MARKET VALUE means, as of a particular date, the average closing bid
and asked prices of the Stock in the Over the Counter Market, as
reported by the National Association of Securities Dealers, Inc., or
if the Stock is listed on an exchange, the closing price of the Stock.
1.7 OFFICER means any person who has been identified by the Board as an
"officer" for purposes of Section 16 of the Securities
Exchange Act of 1934, as amended.
1.8 OPTION means an option to purchase shares of the stock granted
under the Plan.
1.9 OPTION AGREEMENT means an agreement between the Company and an
Optionee, setting forth the terms and conditions of an Option.
1.10 OPTION PRICE means the price paid by an Optionee for an
Option under this Plan.
1.11 OPTION SHARE means any share of Stock of the Company
transferred to an Optionee upon exercise of an Option pursuant to
this Plan.
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1.12 OPTIONEE means a person eligible to receive an Option, as
provided in Section 6, to whom an Option shall have been granted under
the Plan.
1.13 PLAN means this 1990 Incentive Stock Option Plan of the
Company, as amended.
1.14 STOCK means common stock, par value $ 0.05 per share, of the
Company.
1.15 VESTING YEAR for any portion of any Option means the calendar
year in which that portion of the Option first becomes exercisable.
2. PURPOSE. This 1990 Incentive Stock Option Plan is intended to advance the
interests of the Company and its stockholders by improving the Company's
ability to attract and retain qualified individuals who are in a
position to contribute to the management and growth of the Company and
its subsidiaries and to provide additional incentive for such
individuals to contribute to the Company's future success. The Plan is
intended to be an incentive stock option plan within the meaning of
Section 422A of the Internal Revenue Code of 1986, as amended.
3. TERM OF THE PLAN. Options under the Plan may be granted on or after
October 24, 1990, but not later than October 23, 2000.
4. STOCK SUBJECT TO THE PLAN. At no time shall the number of shares of the
Stock then outstanding which are attributable to the exercise of Options
granted under the Plan, plus the number of shares then issuable upon exercise
of outstanding Options granted under the Plan exceed 1,500,000 shares, SUBJECT,
HOWEVER, to the provisions of Section 15 of the Plan. Shares to be issued upon
the exercise of Options granted under the Plan may be either authorized but
unissued shares or shares held by the Company in its treasury. If any Option
expires or terminates for any reason without having been exercised in full, the
shares not purchased thereunder shall again be available for Options thereafter
to be granted.
5. ADMINISTRATION. The Plan shall be administered by the Board of Directors
of the Company or by a committee composed of members of the Board (the
Board of Directors or any such
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committee being hereinafter referred to as the "Committee"). With
respect to directors and Officers eligible to receive an Option under
this Plan, the Plan shall be administered by a special committee (the
"Special Committee") of the Board of Directors of the Company who are
"disinterested persons" as defined in Rule 16b-3(c) (2) (i) under
Section 16 of the Securities Exchange Act of 1934 and who are also not
an employee of one or more of the Company and its subsidiaries. Only
the Special Committee may grant Options to directors and Officers
eligible to receive Options under this Plan. Subject to the provisions
of the Plan, the Committee or the Special Committee, as the case may be,
shall have complete authority, in its discretion, to make the following
determinations with respect to each Option to be granted by the Company:
(a) the employee to receive the Option; (b) the time of granting the
Option; (c) the number of shares subject thereto; (d) the Option
Price; and (e) the Option period. In making such determinations, the
Committee may take into account the nature of the services rendered by
the respective employees, their present and potential contributions to
the success of the Company and its subsidiaries, and such other factors
as the Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete authority
to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
respective Option Agreements (which need not be identical), and to make
all other determinations necessary or advisable for the administration
of the Plan. The Committee's determinations on the matters referred to
in this Section 5 shall be conclusive.
6. ELIGIBILITY. An Option may be granted only to an employee of one or more
of the Company and its subsidiaries. A Director of one or more of the Company
and its subsidiaries who is not also an employee of one or more of the Company
and its subsidiaries shall not be eligible to receive an Option. Any person
who, within the meaning of Section 422A(b) (6) of the Code, is deemed to own
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company (or of its parent or subsidiary corporations)
shall not be eligible to receive an Option.
7. TIME OF GRANTING OPTIONS. The granting of an Option shall take place at
the time specified by the Committee. Only if expressly so provided by the
Committee, shall the Grant Date be the date on which an Option Agreement shall
have been duly executed and delivered by the Company and the Optionee.
8. OPTION PRICE. The Option Price under each Option shall be not less than
100% of the Fair Market Value of the Stock on the Grant Date.
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9. OPTION PERIOD. No Option may be exercised later than the tenth anniversary
of the date on which it is granted. An Option may become exercisable in such
installments, cumulative or non-cumulative, as the Committee may determine.
10. LIMIT ON OPTION CHARACTERIZATION. No Option shall be considered an Option
to the extent pursuant to its terms it would permit the Optionee to purchase
for the first time in any Vesting Year more than the number of shares of Stock
calculated by dividing the current limit by the Fair Market Value on the Grant
Date. The current limit for any Optionee for any Vesting Year shall be
$100,000 minus the aggregate Fair Market Value at the date of grant of the
number of shares of Stock available for purchase for the first time in such
Vesting Year under each other Option granted to the Optionee under the Plan and
each other incentive stock option granted to the Optionee under any other
incentive stock option plan of the Company (and its parent and subsidiary
corporations).
11. EXERCISE OF OPTION. An Option may be exercised in accordance with its
terms by written notice of intent to exercise the Option, specifying the number
of shares with respect to which the Option is then being exercised. The
notice shall be accompanied by payment in the form of cash or shares of the
Stock with a Market Value on the date of exercise equal to the Option Price of
the shares to be purchased. Within 20 days thereafter, the Company shall
deliver or cause to be delivered to the Optionee evidence of ownership of the
number of shares then being purchased. Such shares shall be fully paid and
nonassessable. If any law or applicable regulation of the Securities and
Exchange Commission or other public regulatory authority shall require the
Company or the Optionee to register or qualify under the Securities Act of
1933, as amended, any similar federal statute then in force or any state law
regulating the sale of securities, any Option Shares with respect to which
notice of intent to exercise shall have been delivered to the Company or to
take any other action in connection with such shares, the delivery of the
certificate or certificates for such shares shall be postponed until completion
of the necessary action, which the Company shall take in good faith and without
delay. All such action shall be taken by the Company at its own expense.
12. TERMINATION OF EMPLOYMENT. In the event that the Optionee's employment is
terminated, whether voluntarily or by reason of dismissal, disability or
retirement, the Option, to the extent exercisable at the date of termination,
may be exercised by the Optionee within three months after he or she
ceases to be an
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employee; PROVIDED, HOWEVER, that if termination results from the death of the
Optionee, the Option, to the extent exercisable at the date of death, may be
exercised by the person to whom the option is transferred by will or the
applicable laws of descent and distribution, at any time within six months
after the date of death, unless terminated earlier by its terms. Military or
sick leave shall not be deemed a termination of employment provided that it
does not exceed the longer of 90 days or the period during which the absent
employee's reemployment rights are guaranteed by statute or by contract.
13. TRANSFERABILITY OF OPTIONS. Options shall not be transferable, otherwise
than by will or the laws of descent and distribution, and may be exercised
during the life of the Optionee only by the Optionee.
14. TRANSFERABILITY OF OPTION SHARES. The Optionee agrees that he or she will
not transfer any of the Option Shares at any time purchased upon the exercise
of any portion of the Option unless (i) such shares are registered under the
provisions of the Securities Act of 1933, as amended, or (ii) at the
request of the Company, the transferee represents, in form satisfactory to
counsel for the Company, that he or she will not transfer, sell or otherwise
dispose of the Optioned Shares at any time purchased by him or her in a manner
which would violate the Securities Act of 1933, as amended (the "Act"), and the
regulations of the Securities and Exchange Commission thereunder. The Optionee
agrees that the Company may, at its discretion, make a notation on any
certificates issued upon exercise of any portion of the Option to the effect
that such certificate may not be transferred except after receipt by the
Company of an opinion of counsel satisfactory to it to the effect that such
transfer will not violate the Act and the regulations thereunder, and may issue
"stop transfer" instructions to its transfer agent, if any, and make a "stop
transfer" notation on its books as appropriate.
15. ADJUSTMENT OF NUMBER OF OPTION SHARES. Each Option Agreement shall provide
that in the event of any stock dividend payable in the Stock or any split-up or
contraction in the number of shares of the Stock occurring after the date of
the Agreement and prior to the exercise in full of the Option or the repurchase
by the Company pursuant to Section 14, the number of shares subject to such
Agreement shall be proportionately adjusted and the price to be paid for each
share subject to the Option shall be proportionately adjusted. Each such
agreement shall also provide that in case of any reclassification or change of
outstanding
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shares of the Stock or in case of any consolidation or merger of the Company
with or into another company or in case of any sales or conveyance to another
company or entity of the property of the Company as a whole or substantially as
a whole, shares of Stock or other securities shall be delivered equivalent in
kind and value to those shares an Optionee would have been received if the
Option had been exercised in full or the repurchase consummated immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance and no disposition had subsequently been made. Each Agreement shall
further provide that upon dissolution or liquidation of the Company, the Option
shall terminate, but the Optionee (if at the time in the employ of the Company
or any of its subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the Option to the extent not
theretofore exercised. No fraction of a share shall be purchasable or
deliverable upon exercise, but in the event any adjustment hereunder of the
number of shares covered by the Option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the nearest smaller
whole number of shares. In the event of changes in the outstanding Stock by
reason of any stock dividend, split-up, contraction, reclassification, or
change of outstanding shares of the Stock of the nature contemplated by this
Section 15, the number of shares of the Stock available for the purpose of the
Plan as stated in Section 4 shall be correspondingly adjusted.
16. RESERVATION OF STOCK. The Company shall at all times during the term of
the Option reserve and keep available such number of shares of the Stock as
will be sufficient to satisfy the requirements of this Plan and shall pay all
fees and expenses necessarily incurred by the Company in connection therewith.
17. LIMITATION OF RIGHTS IN THE OPTION SHARES. The Optionee shall not be
deemed for any purpose to be a stockholder of the Company with respect to any
of the Option Shares except to the extent that the Option shall have been
exercised with respect thereto and, in addition, a certificate shall have been
issued therefore and delivered to the Optionee. Any Stock issued pursuant to
the Option shall be subject to all restrictions upon the transfer thereof which
may be now or hereafter imposed by the Articles of Organization or the By-laws
of the Company.
18. TERMINATION AND AMENDMENT OF THE PLAN. The Board may at any time terminate
the Plan or make such modifications of the Plan as it shall deem advisable;
PROVIDED that no modification shall be effective to increase the number of
shares of Stock subject to
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the Plan or change the number or classification of employees eligible to
receive Options until such modification is approved by the holders of a
majority of the voting capital stock of the Company. No termination or
amendment of the Plan may, without the consent of the Optionee to whom
any Option shall theretofore have been granted, adversely affect the
rights of such Optionee under such Option.
19. NOTICES. Any communication or notice required or permitted to be given
under the Plan shall be in writing, and mailed by registered or certified mail
or delivered in hand, if to the Company, to its Treasurer at LTX Park at
University Avenue, Westwood, Massachusetts 02090 and, if to the Optionee, to
the address as the Optionee shall last have furnished to the communicating
party.
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EXHIBIT C
LTX CORPORATION
1990 STOCK OPTION PLAN
1994 AMENDMENT
1. The "1990 Incentive Stock Option Plan of LTX Corporation" shall
be renamed the "1990 Stock Option Plan of LTX Corporation" and
each time the name "1990 Incentive Stock Option Plan" is used it
shall be replaced with "1990 Stock Option Plan".
2. The following new definitions 1.5.A and 1.5.B shall be inserted
after the definition of "Grant Date" in Section 1, Definitions.
"1.5.A INCENTIVE OPTION means an Option intended to be an incentive stock
option within the meaning of Section 422 of the Code.
1.5.B NONSTATUTORY OPTION means any Option that is not an Incentive Option".
3. The last sentence of Section 2, Purpose shall be deleted and
replaced with the following:
"The Plan is intended to be an incentive stock option plan within
the meaning of Section 422 of the Code, but not all Options
granted hereunder are required to be Incentive Options."
4. The number "1,500,000" contained in the first sentence of
Section 4, Stock Subject to Plan shall be deleted and replaced
with the number "2,700,000".
5. The following shall be inserted after the last sentence of
Section 4, Stock Subject to the Plan:
"Each Director who is not an employee of the Company or a
subsidiary thereof shall receive a nonstatutory option to
purchase 20,000 shares of Common Stock on the date on which he or
she is first elected to the Board of Directors of the Company and
an additional option to purchase 6,000 shares of Common Stock on
the date of each annual meeting at which he or she is re-elected
or after which he continues to serve as a Director. Each
Director who is not an employee of the Company or a subsidiary
thereof shall also receive an option to purchase 2,000 shares of
Common Stock in each year served as a chairman of a Committee of
the Board of Directors and an option to purchase 1,000 shares of
Common Stock in each year served as a member of a Committee of
the Board of Directors, such options to be
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issued on the date the
Committees are established annually by the Board of Directors.
Each option granted to a Director under this Section 4 shall have
an exercise price of $1.00 per share and shall be exercisable,
cumulatively, to the extent of one-third of the stock covered
thereby on each of the first three anniversary dates of the grant
of the Option. In the event any Director standing for
re-election is not re-elected to the Board of Directors at any
meeting, all of such Director's unexercisable Options granted
prior to the date of that meeting will become exercisable
immediately".
6. Sub-clause (a) of the fourth sentence of Section 5,
Administration shall be deleted and replaced with the following:
"(a) the employee, director or consultant to receive the
Option;"
7. The fifth sentence of Section 5, Administration shall be
amended by inserting the words "directors and consultants" after
the word employees contained therein.
8. The first sentence of Section 6, Eligibility shall be amended
by inserting the words "director, or consultant" after the word
employee contained therein.
9. The first sentence of Section 8, Option Price shall be deleted
and replaced with the following two sentences:
"The Option Price under each Incentive Option shall be not less
than 100% of the Fair Market Value of Stock on the Grant Date;
the Option Price under each Nonstatutory Option shall not be so
limited."
10. Section 9, Option Period shall be deleted and replaced with
the following:
"9. Option Period. No Incentive Option may be exercised later
than the tenth anniversary of the Grant Date. The period during
which a Nonstatutory Option may be exercised shall not be so
limited. An Option may become exercisable in such installments,
cumulative or non-cumulative, as the Committee may determine. In
the case of an Option not otherwise immediately exercisable in
full, the Committee may accelerate the exercisability of such
Option in whole or in part at any time, provided the acceleration
of the exercisability of any Incentive Option would not cause the
Option to fail to comply with the provisions of Section 422 of
the Code."
11. Section 10, Limit on Option Characterization shall be amended
by inserting the work "Incentive" before the word "Option" each
time the word "Option" appears in Section 10.
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12. Section 12, Termination of Employment is amended by inserting
the words "or association with the company" after the word
"employment" in the first sentence and by inserting the words
"director, or consultant" after the word "employees" in the first
sentence.
13. Section 18, Termination and Amendment of the Plan is amended
by inserting the following sentence after the last sentence of
Section 18:
"In no event may the Board amend the Plan more than once every
six months other than to comply with changes in the Code, the
Employee Retirement Income Security Act of 1974 or the rules
thereunder."
14. Insert the following new section after Section 19, Notices:
"20. WITHHOLDING; NOTICE OF DISPOSITION OF STOCK PRIOR TO EXPIRATION
OF SPECIFIED HOLDING PERIOD.
(a) Whenever shares are to be issued in satisfaction of an Option
granted hereunder, the Company shall have the right to require
the Optionee to remit to the Company an amount sufficient to
satisfy federal, state, local or other withholding tax
requirements if and to the extent required by law (whether so
required to secure for the Company an otherwise available tax
deduction or otherwise) prior to the delivery of any certificate
or certificates for such shares.
(b) The Company may require as a condition to the issuance of
shares covered by an Incentive Option that the party exercising
such Option give a written representation to the Company which is
satisfactory in form and substance to its counsel and upon which
the Company may reasonably rely, that he or she will report to
the Company any disposition of such shares prior to the
expiration of the holding periods specified by Section 422(a)(1)
of the Code. If and to the extent that the realization of income
in such a disposition imposes upon the Company federal, state,
local or other withholding tax requirements, or any other
available tax deduction, the Company shall have the right to
require that the recipient remit to the Company an amount
sufficient to satisfy those requirements; and the Company may
require as a condition to the issuance of shares covered by an
Incentive Option that the party exercising such option give a
satisfactory written representation promising to make such a
remittance."
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EXHIBIT D
RULES OF THE EMPLOYEE SHARE OPTION PLAN
FOR LTX (EUROPE) LIMITED
1. INTRODUCTION
1.1 Purpose
The scheme is intended to encourage ownership of shares in LTX Corporation
on the part of certain key qualifying employees and directors of the LTX
(Europe) Limited.
1.2 Definitions
In these Rules the following words and expressions shall have the following
meanings
"Approval Date" the date on which the Scheme is approved by
the Board of Inland Revenue under Schedule 9.
"Associated Company" the meaning given in section 416, ICTA 1998.
"ICTA 1988" the Income and Corporation Taxes Act 1988
"Board" the Board of Directors of the Company or. as
specified in Rule 7, a duly constituted committee
or special committee thereof.
"Company" LTX Corporation.
"Date of Grant" the date on which an Option Is, was, or is to be
granted under the Scheme.
"Eligible Employee" any director or employee of LTXE who is
required to devote to his duties not less than 25
hours (excluding meal breaks) or, in the case of
an employee who is not a director of LTXE, 20
hours per week (excluding meal breaks) and
who is not precluded by paragraph 8 of
Schedule 9 from participating in the Scheme.
"LTXE" LTX (Europe) Limited
"Market Value" an any day the market value of a Share
determined in accordance with the provisions of
Part VIII of the Taxation of Chargeable Gains
Act 1992 and agreed for the purposes of the
Scheme with the Inland Revenue Share
Valuation Division on or before that day.
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"Option" a right to subscribe for shares granted (or to be
granted) in accordance with the Rules of this
Scheme.
"Option Agreement" an agreement between the Company and the
Option Holder setting out the terms and
conditions of an Option.
"Option Holder" an individual to whom an Option has been
granted or his personal representatives.
"Relevant Emoluments" the meaning which the terms bear in sub-
paragraph (2) of paragraph 28 of Schedule 9 by
virtue of sub-paragraph (4) of that paragraph.
"Schedule 9" Schedule 9 ICTA 1988.
"Scheme" the employee share option scheme constituted
and governed by these. rules as from time to
time amended.
"Share" an ordinary share in the capital of the Company
par value. $.05 per share which satisfies the
conditions specified in paragraph 10-14 inclusive
of Schedule 9.
"Subscription Price" the price at which each Share subject to an
Option may be acquired an the exercise of that
Option determined in accordance with Rule 2.
"Subsisting Option" an Option which has neither lapsed nor been
exercised.
"Year of Assessment" a year beginning on any 6 April and ending on
the following 5 April.
1.3 Where the context so admits the singular shall include the plural and vice
versa and the masculine shall include the feminine.
1.4 Any reference in the Scheme to any enactment includes a reference to that
enactment as from time to time modified, extended or re-enacted.
1.5 Options under the Scheme may be granted at any time during the ten years
following the Approval Date.
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2. GRANT OF OPTIONS
2.1 At any time or times within a period of ten years following the Approval
Date the Board may in its absolute discretion select any number of
individuals who may at the Date of Grant be Eligible Employees and grant
to them Options to acquire Shares in the Company.
2.2 In relation to each Eligible Employee selected under Rule 2.1 the Board
shall determine
2.2.1 the Date of Grant (being no later than 14 days after the selection
shall have been made);
2.2.2 the number of Shares over which the Eligible Employee shall be
granted an Option, being determined at the absolute discretion of
the Board save that it shall not be so large that the. grant of
Option over that number of Shares would cause the limit specified in
Rule 3.1 to be exceeded.
2.3 The Subscription Price shall not be less than the nominal value of a Share
and, subject to Rule 5, it shall not be less than the Market Value of a
Share on the Date of Grant.
2.4 As soon as possible after the Options have been granted the Board shall
issue an Option Agreement in respect of each Option in such form, not
inconsistent with these Rules as the Board may determine.
2.5 Options may be transferred by will or the laws of intestate succession but
otherwise no Option may be transferred, assigned or charged and any
purported transfer, assignment or charge shall cause the Option to lapse
forthwith. Each Option Agreement shall carry a statement to this effect.
2.6 Each Grant of an Option shall state that in the event of any stock
dividend payable on the Shares or any split up or contraction in the
number of Shares occurring after the grant of the Option but prior to the
exercise of the Option the number of Shares subject to the grant on the
Option shall be proportionately adjusted, as will the number of Shares
available under Rule 3.
2.7 No fraction of a Share will be sold or delivered. Any fraction will be
rounded down to the nearest whole number.
3. LIMITATIONS ON GRANTS
3.1 Any Option granted to any Eligible Employee shall be limited and take
effect so that the aggregate Market Value of Shares subject to that
Option, when aggregated with the Market Value of Shares subject to
Subsisting Options, shall not exceed the greater of
3.1.1 [Pound]100,000; or
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3.1.2 four times the amount of the Eligible Employee's Relevant Emoluments
for the current or preceding Year of Assessment (whichever of those
years gives the greater amount) or, if there were no Relevant
Emoluments for the preceding Year of Assessment, four times the
amount of the Relevant Emoluments for the period of twelve months
beginning with the first day during the current Year of Assessment in
respect of which there are Relevant Emoluments.
3.2 For the purposes of Rule 3.1
3.2.1 Options shall include all Options granted under this Scheme and all
options granted under any other scheme approved under Schedule 9 and
established by the Company or any Associated Company thereof;
3.2.2 The Market Value of Shares shall be calculated as at the time the
Options in relation to those Shares were granted or such earlier time
as may have been agreed in writing with the Board of Inland Revenue.
3.3 At no time shall the number of Shares which are attributable to the
exercise of Options granted under the scheme, together with the number of
Shares then issuable upon exercise of outstanding options granted under
the scheme exceed 100,000 Shares. Shares shall be available for granting
of an option again once an option expires or terminates for any reason
without having been exercised in full.
4. EXERCISE OF OPTIONS
4.1 Subject to Rule 6 below any Option which has not lapsed may be exercised
in whole or in part at any time following the earliest of the following
events
4.1.1 the first anniversary of the Date of Grant
4.1.2 the death of the Option holder
4.1.3 the Option holder ceasing to be a director or employee of LTXE by
reason of injury, disability, redundancy, retirement or any other
reason.
4.2 An Option shall lapse on the earliest of the following events
4.2.1 the tenth anniversary of the Date of the Grant
4.2.2 six months after the date of the Option holder's death
4.2.3 three months following the Option holder ceasing to be a director or
employee of any LTXE, other than by reason of this death
4.2.4 the Option holder being adjudicated bankrupt.
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4.3 Military or maternity leave shall not constitute a cessation of employment
provided that such period of leave does not exceed the longer of 90 days or
the period donne which the absent employee's or director's employment
rights are protected by statute or otherwise by contract.
5. VARIATION OF SHARE CAPITAL
5.1 In the event of any variation of the share capital of the Company by way of
capitalization or rights issue, consolidation, subdivision or reduction of
capital or otherwise, the number of Shares subject to any Option, the
Subscription Price for each of those Shares and the number of Shares
specified in Rule 3.3 shall be adjusted in such manner as the auditors of
the Company for the time being confirm in writing to be fair and reasonable
provided that
5.1.1 the aggregate amount payable on the exercise of an Option in full is
not increased
5.1.2 the Subscription Price for a Share is not reduced below its nominal
value
5.1.3 no adjustment shall be made without the prior approval of the Board
of Inland Revenue and
5.1.4 following the adjustment the Shares continue to satisfy the
conditions specified in paragraphs 10 to 14 inclusive of Schedule 9.
6. MANNER OF EXERCISE OF OPTIONS
6.1 No Option may be exercised by an individual at any time when he is
precluded by paragraph 8 of Schedule 9 from participating in the Scheme.
6.2 No Option may be exercised at any time when the Shares which may be
thereby acquired do not satisfy the conditions specified in paragraphs
10-14 of Schedule 9.
6.3 An Option may be exercised by the Option Holder giving notice to the
Company in writing of the number of Shares in respect of which he wishes
to exercise the Option accompanied by the appropriate payment and shall be
effective on the date of its receipt by the Company.
6.4 Subject to rule 6.6 Shares shall be allotted and issued pursuant to a
notice of exercise within 30 days of the date of exercise and a definitive
share certificate issued to the Option Holder in respect thereof. Save for
any rights determined by reference to a date preceding the date of
allotment, such Shares shall rank pari passu with the other shares of the
same class in issue at the date of allotment.
6.5 When an Option is exercised only in part, the balance shall remain
exercisable on same terms as originally applied to the whole Option.
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6.6 Shares issued under the Scheme shell be fully paid non-redeemable, and not
subject to any restrictions other than restrictions which attach to all
shares of the same class. If any law or applicable regulation of the
Securities and Exchange Commission or other public regulatory authority
shall require the Company or the Option Holder to register or qualify under
the Securities Act of 1933, as amended, or any other statute regulating the
sale of securities, any Shares with respect to which notice of intent to
exercise shall have been delivered to the Company to take any other action
in connection with such shares, the delivery of the certificate or
certificates for such shares shall be postponed until completion of the
necessary action, which the Company shall take in good faith and without
delay. All such action shall be taken by the Company at its own expense.
7. ADMINISTRATION AND AMENDMENT
7.1 The Scheme shall be administered by the Board whose decision on all
disputes shall
7.2 The Board may from time to amend these Rules provided that
7.2.1 no amendments may materially affect an Option Holder as regards an
Options granted prior to the amendment being made
7.2.2 no amendments may be made which would make the terms on which Options
may be granted materially more generous or would increase the limit
specified in Rule 3.3 without the prior approval of Company in
general meeting and
7.2.3 no amendments shall have effect until approved by the Board of Inland
Revenue.
In administering or amending the Scheme account may be taken of the nature
of the services rendered by the employee or director, their present and
potential contributions to the success of the Company and its group, and
such other factors as the Board, the committee or special committee (as
defined below) shall deem relevant.
7.3 The cost of establishing and operating the Scheme shall be borne by LTXE.
7.4 7.4.1 The Board may establish a committee consisting of not less than
three Members of the Board to whom any or all of its powers in
relation to the Scheme may be delegated. The Board may at any time
dissolve the committee, alter its constitution or direct the manner
in which it shall act.
7.4.2 With respect to directors and officers eligible to receive an
Option under this scheme, the Scheme shall be administered by a
special committee of the Board of Directors of the Company who are
"disinterested persons" as defined in Rule 16b - 3(c) (2) (1) under
Section 16 of the Securities Exchange Act 1934 and who are also not
an employee of one or more if the Company and its subsidiaries.
17
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7.5 Any notice or other communication under or in connection with the Scheme
shall be in writing, and sent by registered or certified mail or delivered
by hand, if to the Company, to its Treasurer at LTX Park Avenue University,
Avenue, Westwood, Massachusetts 02090 and if to the Option Holder, to the
address as the Option Holder shall last have furnished to the communicating
party. Items sent by post shall be prepaid and shall be deemed to have been
received 72 hours after posting.
7.6 The Company shall at all times keep available sufficient authorised and
unissued Shares to satisfy the exercise to the full extent still possible
of all Options which neither lapsed not been fully exercised, taking
account of any other obligations of the Company to issued unissued Shares.
8. TRANSFER OF SHARES
8.1 The Eligible Employee agrees that no shares which are purchased under this
Scheme will he transferred unless
8.1.1 such Shares are registered under the provisions of the Securities
Act of 1933, as amended or
8.1.2 counsel to the Company shall be of the opinion that the proposed
transfer will not constitute a violation of such Act.
8.2 The Eligible Employee agrees that the Company may place an endorsement
on any certificate representing any Shares issued pursuant to the Scheme
to this effect.
18
1995 APPROVED SHARE OPTION AGREEMENT FOR
LTX (EUROPE) LIMITED
AGREEMENT dated [ ], between LTX Corporation, a Massachusetts
corporation (the "Company"), and
[ ] ("Option Holder") presently residing at
[ ]
1. Optioned Shares
Subject to the terms and conditions set forth herein, the Company grants to
the Option Holder an option ("the Option") to purchase from the Company all
or any part of a total of [ ] shares (the "Optioned Shares") of the
Company's Common Stock, $.05 par value, (the "Common Stock").
2. Price
The price to be paid for the Optioned Shares shall be [ ] per share,
which was 100% of the fair market value of the Common Stock on [ ]
(the "Grant Date").
3. Termination of Option
The Option shall terminate on the earlier of (a) 10 years from the Grant
Date or (b) the Option Holder's employment extension date, determined from
the following table:
REASON FOR EMPLOYMENT EMPLOYMENT EXTENSION
TERMINATION DATE
--------------------- --------------------
Death 6 months after death
Other 3 months after termination
Military or sick leave shall not be deemed a termination of employment
provided that it does not exceed the longer of 90 days or the period
during which the absent employee's re-employment rights are guaranteed by
statute or by contract.
4. Exercise of Option
The Option may be exercised cumulatively in accordance with the following
schedule:
Date Percentage of Option
---- --------------------
[ ]%
[ ]%
[ ]%
Where at least three years have elapsed since the Grant Date and since the
date of the last exercise by the Option Holder of any option granted under
this Plan or any other plan approved under Schedule 9 of the UK Income and
Corporation Taxes Act of
19
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1988 ("ICTA 1988"), no income tax shall be chargeable under any provision
of the ICTA 1988 in respect of any increase in value.
Exercise of the Option may be effected by giving written notice, in the
manner provided in Section 10, specifying the number of shares as to which
the Option is being exercised, accompanied by full payment for such shares
in the form of cheque or bank draft payable to the order of the Company.
Receipt by the Company of such notice and payment shall constitute the
exercise of the Option. Within a reasonable time thereafter, the Company
shall deliver or cause to be delivered to the Option Holder a certificate
or certificates for the number of shares then being purchased by him or
her. Such shares shall be fully paid and non-redeemable. If any law or
applicable regulation of the Securities and Exchange Commission or other
public regulatory authority shall require the Company or the Option Holder
to register or qualify under the Securities Act of 1934, as amended, or
any other statute regulating the sale of Securities any Optioned Shares
with respect to which notice of intent to exercise shall have been
delivered to the Company, or to take any other action in connection with
such shares, the delivery of the certificate or certificates for such
shares shall be postponed until completion of the necessary action, which
the Company shall take in good faith and without any delay. All such action
shall be taken by the Company at its own expenses.
5. Restriction Against Transfer of Option
During the lifetime of the Option Holder, the Option may be exercised only
by the Option Holder. Except by will or by the laws of Intestacy, the
Option and all rights granted hereunder may not be transferred, assigned,
pledged, or hypothecated (whether by operation of law or otherwise) and
shall not be subject to execution, attachment, or similar process.
6. Capital Changes
In the event of the stock dividend payable in the Common Stock or any
split-up or contraction in the number of shares of the Common Stock
occurring after the date of this agreement and prior to the exercise in
full of the Option, the number of shares for which the Option may
thereafter be exercised shall be proportionately adjusted and the price to
be paid for each Optioned Share shall be proportionately adjusted. In case
of any reclassification or change of outstanding shares of the Common
Stock which has received the prior approval of the Board of the Inland
Revenue, the Option Holder shall where possible, upon exercise of the
Option, be entitled to receive shares of stock or their securities
equivalent in kind and value to what he or she would have received if he
or she had exercised the Option in full immediately prior to such
reclassification or change and had continued to hold the Option Shares
(together with all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the Option. Where it is
not possible to provide such shares because the new shares do not meet the
conditions under paragraphs 10 - 14 of Schedule 9 to the ICTA 1988
following one of the events noted above or upon dissolution or liquidation
of the Company, the Option shall terminate but the Option Holder shall
have the right, immediately prior to such event dissolution or
liquidation, to purchase
20
all or any part of the Optioned Shares. No fraction of a share shall be
purchasable or deliverable upon exercise, but in the event any adjustment
hereunder of the number of shares covered by the Option shall cause such
number to include a fraction of a share, such fraction shall be adjusted to
the nearest smaller whole number of shares.
7. Reservation of Shares
The Company shall at all times during the term of this agreement reserve and
keep available such number of shares of the Common Stock as will be
sufficient to satisfy the requirements of this Agreement and shall pay all
fees and expenses necessarily incurred by the Company in connection with
this agreement and the issuance of Optioned Shares.
8. Limitation of Rights in Optioned Shares
The Option Holder shall not be deemed for any purpose to be a stockholder of
the Company with respect to any of the Optioned Shares except to the extent
that the Option shall have been exercised with respect thereto and in
addition thereto a stock certificate shall be issued therefor and delivered
to the Option Holder.
9. Limitation of Employment Rights
The Option confers upon the Option Holder no right to continue in the employ
of the Company and its subsidiaries and does not interfere in any way with
the right of the Company and its subsidiaries to terminate the employment
of the Option Holder at any time.
10. Communication
Any communication or notice required or permitted to be given under this
agreement shall be in writing and mailed by registered or certified mail or
delivered in hand, if to the Company, to its Treasurer at LTX Park,
University Avenue, Westwood, Massachusetts 02090 U.S.A., and, if to the
Option Holder, to the address set forth on the first page of this agreement
or such other address, in each case, as the addressee shall last have
furnished to the communicating party.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first above written.
LTX CORPORATION
BY ________________________
___________________________
Option Holder