Exhibit 10.1
TERADYNE, INC.
2006 EQUITY AND CASH COMPENSATION
INCENTIVE PLAN
(as amended through
November 4, 2008)
1. Purpose and
Eligibility.
The purpose of this 2006 Equity and
Cash Compensation Incentive Plan (the “ Plan ”)
of Teradyne, Inc. is to provide equity ownership and compensation
opportunities in the Company (each an “ Award ”)
to employees, officers, directors, consultants and advisors of the
Company and its Subsidiaries, all of whom are eligible to receive
Awards under the Plan. Any person to whom an Award has been granted
under the Plan is called a “ Participant .”
Additional definitions are contained in
Section 14(a).
2. Administration.
a. Administration by Committee of
Independent Members of the Board of Directors . The Plan will
be administered by a committee (the “ Committee
”) composed solely of members of the Board of Directors of
the Company that are “independent,” as defined pursuant
to Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as
amended, and as proscribed under Rule 303A.02 of the New York Stock
Exchange (“ NYSE ”) Listed Company Manual, or
any amendment, supplement or modification thereto; provided,
however , that at any time and on any one or more occasions the
Board may itself exercise any of the powers and responsibilities
assigned the Committee under the Plan and when so acting shall have
the benefit of all of the provisions of the Plan pertaining to the
Committee’s exercise of its authorities hereunder. The
Committee, in its sole discretion, shall have the authority to
grant Awards, to adopt, amend and repeal rules relating to the
Plan, to interpret and correct the provisions of the Plan and any
Award, and, subject to the limitations of the Plan, to modify and
amend any Award. All decisions by the Committee shall be final and
binding on all interested persons. Neither the Company nor any
member of the Committee shall be liable for any action or
determination relating to the Plan.
b. Delegation to Executive
Officers . To the extent permitted by applicable law, the
Committee may delegate to one or more executive officers of the
Company the power to grant Awards and exercise such other powers
under the Plan as the Committee may determine; provided,
however, that the Committee shall fix the maximum number of
Awards to be granted and the maximum number of shares issuable to
any one Participant pursuant to Awards granted by such executive
officer or officers. The Committee may, by a resolution adopted by
the Committee, authorize one or more executive officers of the
Company to do one or both of the following: (i) designate
employees of the Company or of any of its subsidiaries to be
recipients of Awards and (ii) determine the number, type and
terms of such Awards to be received by such employees, subject to
the limitations of the Plan; provided, however , that, in
each case, the resolution so authorizing such officer or officers
shall specify the maximum number and type of Awards such officer or
officers may so award. The Committee may not authorize an officer
to designate himself or herself as a recipient of any such Awards
or to grant Awards to other executive officers of the
Company.
3. Stock Available for
Awards.
a. Number of Shares . Subject
to adjustment under Section 3(c), the aggregate number of
shares (the “ Authorized Shares ”) of the
Company’s common stock, $0.125 par value per share (the
“ Common Stock ”), that may be issued pursuant
to the Plan shall be 12,000,000 shares of Common Stock. If any
Award expires, is terminated, surrendered, forfeited, expires
unexercised, is settled in cash in lieu of Common Stock or is
exchanged for other Awards, in whole or in part, the unissued
Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan. Shares issued under the Plan may
consist in whole or in part of authorized but unissued shares.
Notwithstanding anything to the contrary in this Plan, the
foregoing limitations shall be subject to adjustment under
Section 3(c), but only to the extent that such adjustment
will not affect the status of any Award intended to qualify as
“performance-based compensation” under
Section 162(m) of the Code.
b. Per-Participant Limit .
Subject to adjustment under Section 3(c), no Participant may
be granted stock-based Awards during any one fiscal year to
purchase more than 2,000,000 shares of Common Stock.
c. Adjustment to Common Stock
. In the event of any stock split, stock dividend, extraordinary
cash dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation,
spin-off, split-up, or other similar change in capitalization or
event, (i) the number and class of securities available for
Awards under the Plan and the per-Participant share limit,
(ii) the number and class of securities, vesting schedule and
exercise price per share subject to each outstanding stock-based
Award, (iii) the repurchase price per security subject to
repurchase, and (iv) the terms of each other outstanding
stock-based Award shall be adjusted by the Company (or substituted
Awards may be made) to the extent the Committee shall determine, in
good faith, that such an adjustment (or substitution) is
appropriate. If Section 11(f)(i) applies for any event, this
Section 3(c) shall not be applicable.
d. Fractional Shares . No
fractional shares shall be issued under the Plan and the
Participant shall, at the Committee’s discretion, receive
either cash in lieu of such fractional shares or a full share for
each fractional share.
4. Stock Options.
a. General . The Committee
may grant options to purchase Common Stock (each, an “
Option ”) and determine the terms and conditions of
each Option, including, but not limited to (i) the number of
shares subject to such Option or a formula for determining such,
(ii) subject to Section 4(e) hereof, the exercise price
of the Options and the means of payment for the shares,
(iii) the Performance Criteria (as defined in
Section 11(d)), if any, and level of achievement of such
Performance Criteria that shall determine the number of shares or
Options granted, issued, retainable and/or vested, (iv) the
terms and conditions of the grant, issuance and/or forfeiture of
the shares or Options, and (v) such further terms and
conditions as may be determined from time to time by the Committee,
in each case not inconsistent with this Plan.
b. Incentive Stock Options .
An Option that the Committee intends to be an “incentive
stock option” as defined in Section 422 of the Code (an
“ Incentive Stock Option ”) shall be granted
only to employees of the Company and shall be subject to and shall
be construed consistently with the requirements of Section 422
of the Code. The Committee and the Company shall have no liability
if an Option or any part thereof that is intended to be an
Incentive Stock Option does not qualify as such.
c. Nonstatutory Stock Options
. An Option or any part thereof that does not qualify as an
Incentive Stock Option is referred to herein as a “
Nonstatutory Stock Option .”
d. Dollar Limitation . For so
long as the Code shall so provide, Options granted to any employee
under the Plan (and any other plans of the Company) which are
intended to constitute Incentive Stock Options shall not constitute
Incentive Stock Options to the extent that such Options, in the
aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate Fair
Market Value (as defined in Section 14 and determined as of
the respective date or dates of grant) of more than $100,000 (or
such other limit as may be provided by the Code). To the extent
that any such Incentive Stock Options exceed the $100,000
limitation (or such other limit as may be provided by the Code),
such Options shall be Nonstatutory Stock Options.
e. Exercise Price . The
Committee shall establish the exercise price (or determine the
method by which the exercise price shall be established) at the
time each Option is granted and specify the exercise price in the
applicable Option agreement, provided , that the exercise
price per share specified in the agreement relating to each Option
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 Incentive Stock Option to be granted to an employee owning stock
possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company, the price per
share specified in the agreement relating to such Incentive Stock
Option shall not be less than one hundred ten percent
(110%) of the Fair Market Value per share of Common Stock on
the date of grant (or such other limit as may be provided by the
Code). For purposes of determining stock ownership under this
subsection, the rules of Section 424(d) of the Code shall
apply. Subject to Section 3(c), an Option may not be amended
subsequent to its issuance to reduce the price at which it is
exercisable unless such amendment is approved by the
Company’s shareholders.
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f. Duration of Options . Each
Option shall be exercisable at such times and subject to such
terms, conditions and expiration as the Committee may specify in
the applicable Option agreement; provided , that no Option
shall be exercisable for a period of time greater than ten
(10) years from the date of grant of such Option; provided,
further , that Incentive Stock Options granted to an employee
owning stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company
shall be exercisable for a maximum of five (5) years from the
date of grant of such Option (or such other limit as may be
provided by the Code). For purposes of determining stock ownership
under this subsection, the rules of Section 424(d) of the Code
shall apply.
g. Vesting of Options .
Subject to Section 11(f) and Section 11(j) and except as
provided in Section 13, at the time of the grant of an Option,
the Committee shall establish a vesting date or vesting dates with
respect to the shares of Common Stock covered by such Options. The
Committee may establish vesting dates based upon the passage of
time and/or the satisfaction of Performance Criteria or other
conditions as deemed appropriate by the Committee.
h. Exercise of Option .
Options may be exercised only by delivery to the Company at its
principal office address or to such transfer agent as the Company
shall designate of a written notice of exercise specifying the
number of shares as to which such Option is being exercised, signed
by the proper person, or by notification of the Company-designated
third party commercial provider (the “ Third Party
Commercial Provider ”), in accordance with the procedures
approved by the Company and to which the holder of the Option shall
have ongoing access by means of accessing such person’s
account maintained with the Third Party Commercial Provider,
together with payment in full as specified in Section 4(i) for
the number of shares for which the Option is exercised.
i. Payment Upon Exercise .
Common Stock purchased upon the exercise of an Option shall be paid
for by one or any combination of the following forms of
payment:
(i) in United States dollars in cash
or by check payable to order of the Company or by fund transfer
from the Option holder’s account maintained with the Third
Party Commercial Provider;
(ii) at the discretion of the
Committee, through delivery of shares of Common Stock having a Fair
Market Value equal as of the date of the exercise to the cash
exercise price of the Option, provided, that such shares
were not acquired by the Participant in the prior six
months;
(iii) at the discretion of the
Committee and 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 Third Party Commercial
Provider to pay that amount to the Company, which sale shall be at
the Participant’s direction at the time of exercise;
or
(iv) at the discretion of the
Committee, by any combination of (i), (ii), or
(iii) above.
If the Committee exercises its
discretion to permit payment of the exercise price of an Incentive
Stock Option by means of the methods set forth in clauses (ii),
(iii) or (iv) of the preceding sentence, such discretion
shall be exercised in writing in the instrument evidencing the
Award of the Incentive Stock Option.
j. Notice to Company of
Disqualifying Disposition . By accepting an Incentive Stock
Option granted under the Plan, each optionee agrees to notify the
Company in writing immediately after such optionee makes a
disqualifying disposition of any stock acquired pursuant to the
exercise of the Incentive Stock Options. A “disqualifying
disposition” is generally any disposition occurring on or
before the later of (a) the date two years following the date
the Incentive Stock Option was granted or (b) the date one
year following the date the Incentive Stock Option was
exercised.
k. Issuances of Securities .
Except as provided in Section 3(c) or as otherwise 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.
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5. Stock Appreciation Rights
a. General . A Stock
Appreciation Right (a “ SAR ”) is an Award
entitling the holder, upon exercise, to receive an amount in cash
or Common Stock, or a combination thereof (such form to be
determined by the Committee), determined solely by reference to
appreciation, from and after the date of grant, in the Fair Market
Value of a share of Common Stock. The date as of which such
appreciation or other measure is determined shall be the exercise
date of the SAR Award.
b. Grants . SARs may be
granted in tandem with, or independently of, Options granted under
the Plan.
(1) Tandem Awards . When SARs
are expressly granted in tandem with Options: (i) the SARs
will be exercisable only at such time or times, and to the extent,
that the related Option is exercisable, and will be exercisable in
accordance with the procedure required for exercise of the related
Option; (ii) the SARs will terminate and no longer be
exercisable upon the termination or exercise of the related Option,
except that a SAR granted with respect to less than the full number
of shares covered by an Option will not be terminated until and
only to the extent that the number of shares as to which the
related Option has been exercised or has terminated exceeds the
number of shares not covered by the SAR; (iii) the Option will
terminate and no longer be exercisable upon the exercise of the
related SAR; and (iv) the SAR will be transferable only with
the related Option.
(2) Independent Stock
Appreciation Rights . A SAR not expressly granted in tandem
with an Option will become exercisable at such time or times, and
on such conditions, as the Committee may specify in the SAR
Award.
c. Terms and Conditions . The
Committee shall determine all terms and conditions of a SAR Award,
including, but not limited to (i) the number of shares subject
to such SAR Award or a formula for determining such, (ii) the
Performance Criteria, if any, and level of achievement of such
Performance Criteria that shall determine the number of shares
granted, issued, retainable and/or vested or the amount of cash
payable, (iii) the terms and conditions on the grant, issuance
and/or forfeiture of the shares, and (iv) such further terms
and conditions as may be determined from time to time by the
Committee, in each case not inconsistent with this Plan.
d. Vesting of SAR Awards .
Subject to Section 11(f) and Section 11(j), at the time
of the grant of a SAR Award, the Committee shall establish a
vesting date or vesting dates with respect to such SAR Award,
provided that SARs awarded in tandem with Options shall be
subject to the same vesting date or vesting dates established by
the Committee pursuant to Section 4(g) for such related
Options and shall be exercisable only to the extent that such
related Option shall then be exercisable. The Committee may
establish vesting dates based upon the passage of time and/or the
satisfaction of Performance Criteria or other conditions as deemed
appropriate by the Committee.
6. Restricted
Stock.
a. Grants . The Committee may
grant Awards entitling recipients to acquire shares of Common
Stock, subject to (i) delivery to the Company by the
Participant of cash, a check or other sufficient legal
consideration in an amount at least equal to the par value of the
shares purchased, (ii) the right of the Company to repurchase
or reacquire all or part of such shares at their issue price or
other stated or formula price from the Participant in the event
that conditions specified by the Committee in the applicable Award
are not satisfied prior to the end of the applicable restriction
period or periods established by the Committee for such Award
(each, a “ Restricted Stock Award ”), and
(iii) Section 6(b).
b. Terms and Conditions . A
Participant that is the holder of a Restricted Stock Award, whether
vested or unvested, shall be entitled to enjoy all shareholder
rights with respect to the shares of Common Stock underlying such
Restricted Stock Award, including the right to receive dividends
and vote such shares. Subject to Section 6(c), the Committee
shall determine all terms and conditions of any such Restricted
Stock Award, including, but not limited to (i) the number of
shares subject to such Restricted Stock Award or a formula for
determining such, (ii) the purchase price of the shares, if
any, and the means of payment for the shares, (iii) the
Performance Criteria, if any, and level of achievement of such
Performance Criteria that shall determine the number of shares
granted, issued, retainable and/or vested, (iv) the terms
and
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conditions on the grant, issuance and/or
forfeiture of the shares, and (v) such further terms and
conditions as may be determined from time to time by the Committee,
in each case not inconsistent with this Plan. At the
Committee’s election, shares of Common Stock issued in
respect of a Restricted Stock Award may be (i) held in book
entry form subject to the Company’s instructions until any
restrictions relating to the Restricted Stock Award lapses, or
(ii) evidenced by a stock certificate that may bear a legend
indicating that the ownership of the shares of Common Stock
represented by such certificate is subject to the restrictions,
terms and conditions of this Plan and the Restricted Stock Award.
Any stock certificates issued in respect of a Restricted Stock
Award shall be registered in the name of the Participant. All
certificates registered in the name of the Participant shall,
unless otherwise determined by the Committee, be deposited by the
Participant, together with a stock power endorsed in blank, with
the Company (or its designee). After the expiration of the
applicable restriction periods, the Company (or such designee)
shall deliver the certificates no longer subject to such
restrictions to the Participant or, if the Participant has died, to
the beneficiary designated by the Participant, in a manner
determined by the Committee, to receive amounts due or exercise
rights of the Participant in the event of the Participant’s
death (the “ Designated Beneficiary ”). In the
absence of an effective designation by a Participant, Designated
Beneficiary shall mean the Participant’s estate.
c. Vesting of Restricted
Stock . Subject to Section 11(f) and Section 11(j),
at the time of the grant of a Restricted Stock Award, the Committee
shall establish a vesting date or vesting dates with respect to the
shares of Common Stock covered by such Restricted Stock Award,
which vesting dates may be based upon the passage of time and/or
the satisfaction of Performance Criteria or other conditions as
deemed appropriate by the Committee; provided , that all
Restricted Stock Awards, other than Awards granted under
Section 11(l), shall have a minimum vesting period of no less
than one (1) year for Restricted Stock Awards granted subject
to Performance Criteria and no less than three (3) years for
all other Restricted Stock Awards.
7. Restricted Stock
Unit.
a. Grants . The Committee may
grant Awards entitling recipients to acquire shares of Common Stock
in the future, with the future delivery of the C
