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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
TERADYNE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts 04-2272148
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
321 Harrison Avenue
Boston, Massachusetts 02118
(Address of Principal Executive Offices)
--------------------
Megatest Corporation Director Stock Option Plan
Megatest Corporation 1990 Stock Option Plan
(Full Title of the Plan)
--------------------
Owen W. Robbins
Executive Vice President
Teradyne, Inc.
321 Harrison Avenue
Boston, Massachusetts 02118
(Name and Address of Agent For Service)
617-482-2700
(Telephone Number, Including Area Code, of Agent For Service)
--------------------
Copies to:
Donald G. Leka, Esq. William B. Asher, Jr., Esq. Harry K. Plant, Esq.
Teradyne, Inc. Testa, Hurwitz & Thibeault Wilson, Sonsini, Goodrich
321 Harrison Avenue High Street Tower & Rosati
Boston, Massachusetts 125 High Street Professional Corporation
02118 Boston, Massachusetts 02110 650 Page Mill Road
Palo Alto, California 94304
Total of sequentially numbered pages: 38
Exhibit index on sequentially numbered page:9
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<PAGE>
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<TABLE>
======================================================================================================
CALCULATION OF REGISTRATION FEE
======================================================================================================
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Share Offering Price Registration Fee
=================== ============ ============== ============== ================
<S> <C> <C> <C> <C>
Megatest Corporation 1990 Stock Option Plan
Teradyne Common Stock, 580,673 shares (1) $23.57 (2) $13,686,463 $4,720
$.125 par value
Megatest Corporation Director Stock Option Plan
Teradyne Common Stock, 22,728 shares (1) $23.57 (2) $ 535,699 $ 185
$.125 par value
TOTAL: 603,401 shares $4,905
======================================================================================================
<FN>
(1) Based on 663,734 Megatest Options granted as of December 1, 1995 under
the 1990 Stock Option Plan or the Director Stock Option Plan, as applicable and
using a conversion ratio of 0.9091 shares of Teradyne common stock for each
share of Megatest common stock.
(2) Estimated soley for the purpose of calculating the registration fee
pursuant to Rule 457(h)(1) and Rule 457(c) under the Securities Act of 1933, as
amended, and based upon the average of the high and low sale prices of the
Common Stock on The New York Stock Exchange on November 27, 1995.
</FN>
</TABLE>
<PAGE>
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information specified in this Item 1 will
be sent or given to employees, directors or others as specified by Rule
428(b)(1). In accordance with the rules and regulations of the Securities and
Exchange Commission (the "Commission") and the instructions to Form S-8, such
documents are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
Item 2. Registrant Information and Employee Plan Annual Information.
The documents containing the information specified in this Item 2 will
be sent or given to employees as specified by Rule 428(b)(1). In accordance with
the rules and regulations of the Commission and the instructions to Form S-8,
such documents are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
are incorporated in this Registration Statement by reference as of their
respective dates (File No. 1-6462):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 filed pursuant to the Exchange Act which
contains audited financial statements for the fiscal year ended
December 31, 1994.
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended April 2, 1995, July 2, 1995, as amended, and October 1,
1995, filed pursuant to the Exchange Act.
All other documents filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal
year covered by the annual report referred to in (a) above.
(c) The section entitled "Description of Registrant's Securities to be
Registered" contained in the Registrant's Registration Statement on
Form 8-A filed pursuant to Section 12(b) of the Exchange Act on April
10, 1979.
All documents subsequently filed with the Commission by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered herein have been sold or which deregisters all securities then remaining
<PAGE>
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unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 67 of the Massachusetts Business Corporation Law ("Section 67")
provides that a corporation may indemnify its directors and officers to the
extent specified in or authorized by (i) the articles of organization, (ii) a
by-law adopted by the stockholders, or (iii) a vote adopted by the holders of a
majority of the shares of stock entitled to vote on the election of directors.
In all instances, the extent to which a corporation provides indemnification to
its directors and officers under Section 67 is optional. The Registrant's
By-laws provide that each director and officer shall be indemnified by the
Registrant against liabilities and expenses in connection with any legal
proceeding to which such officer or director may become a party by reason of
being or having been an officer or director, unless such indemnification is
prohibited by the Massachusetts Business Corporation Law. The Registrant has
also entered into indemnity agreements with each of its directors and certain
executive officers, which agreements require the Registrant to indemnify such
individuals to the fullest extent permitted by Massachusetts law.
The Registrant's Restated Articles of Organization eliminate the
personal liability of the Registrant's directors for monetary damages for breach
of their fiduciary duty as directors to the Registrant and its stockholders,
notwithstanding any provision of law imposing such liability. The Registrant's
Articles of Organization, however, do not eliminate liability of the
Registrant's directors (i) for breach of the director's duty of loyalty to the
Registrant or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 61 or 62 of the Massachusetts Business Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.1 Megatest Corporation 1990 Stock Option Plan
4.2 Megatest Corporation Director Stock Option Plan
5.1 Opinion of Testa, Hurwitz & Thibeault
<PAGE>
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23.1 Consent of Coopers & Lybrand L.L.P.
23.5 Consent of Testa,Hurwitz & Thibeault (included in Exhibit 5.1)
24.1 Power of Attorney (found on Page 8 of this Registration
Statement)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3)of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) (ss. 230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in the post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
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each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Boston, Massachusetts, on the 1st day of December, 1995.
TERADYNE, INC.
By:/s/ Owen W. Robbins
----------------------
Owen W. Robbins
Executive Vice President
and Chief Financial Officer
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Teradyne, Inc., hereby
severally constitute and appoint Alexander V. d'Arbeloff, Owen W. Robbins and
Richard J. Testa, and each of them singly, our true and lawful attorneys with
full power to them, and each of them singly, to sign for us and in our names in
the capacities indicated below, the Registration Statement filed herewith and
any and all amendments thereto (including post-effective amendments), and
generally to do all such things in our names and on our behalf in our capacities
as officers and directors to enable Teradyne, Inc. to comply with the provisions
of the Securities Act of 1933, as amended, and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title(s) Date
--------- -------- ----
<S> <C> <C>
/s/ Alexander V. d'Arbeloff President and Chairman of the Board December 1, 1995
- --------------------------- (Principal Executive Officer)
Alexander V. d'Arbeloff
/s/ Owen W. Robbins Executive Vice President and December 1, 1995
- ------------------- Director
Owen W. Robbins (Principal Financial Officer)
/s/ Donald J. Hamman Controller December 1, 1995
- -------------------- (Principal Accounting Officer)
Donald J. Hamman
/s/ Edwin L. Artzt Director December 1, 1995
- ------------------
Edwin L. Artzt
/s/ Albert Carnesale Director December 1, 1995
- --------------------
Albert Carnesale
<PAGE>
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Director December , 1995
- ---------------------
Daniel S. Gregory
/s/ Dwight H. Hibbard Director December 1, 1995
- ---------------------
Dwight H. Hibbard
/s/ John P. Mulroney Director December 1, 1995
- --------------------
John P. Mulroney
/s/ James A. Prestridge Director December 1, 1995
- -----------------------
James A. Prestridge
/s/ Richard J. Testa Director December 1, 1995
- --------------------
Richard J. Testa
</TABLE>
<PAGE>
-9-
<TABLE>
<CAPTION>
EXHIBIT INDEX
Page Number
in Sequentially
Exhibit No. Description Numbered Copy
- ----------- ----------- ---------------
<S> <C> <C>
4.1 Megatest Corporation 1990 Stock Option Plan 10
4.2 Megatest Corporation Director Stock Option Plan 22
5.1 Opinion of Testa, Hurwitz & Thibeault 35
23.1 Consent of Coopers & Lybrand L.L.P. 37
23.5 Consent of Testa, Hurwitz & Thibeault (included in
Exhibit 5.1) --
24.1 Power of Attorney (found on Page 8 of this Registration
Statement) --
</TABLE>
<PAGE>
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Exhibit 4.1
<PAGE>
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MEGATEST CORPORATION
1990 STOCK OPTION PLAN
(As amended and restated January 12, 1995)
1. Purposes of the Plan. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees and Consultants
of the Company and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock
Options or Nonstatutory Stock Options, at the discretion of the Board and as
reflected in the terms of the written option agreement.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Committee, if one has been or
the Board of Directors appointed, of the Company, if no Committee is appointed.
(b) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(c) "Committee" shall mean the Committee appointed by
the Board of Directors in accordance with paragraph (a) of Section 4 of the
Plan, if one is appointed.
(d) "Common Stock" shall mean the Common Stock of the
Company.
(e) "Company" shall mean Megatest Corporation, a
Delaware corporation.
(f) "Consultant" shall mean any person who is engaged by
the Company or any Parent or Subsidiary to render consulting services and is
compensated for such consulting services, and any director of the Company
whether compensated for such services or not provided that if and in the event
the Company registers any class of any equity security pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
(g) "Continuous Status as an Employee or Consultant"
shall mean the absence of any interruption or termination of service as an
Employee or Consultant. Continuous Status as an Employee or Consultant shall not
be considered interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Board; provided that such leave is for a
period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.
<PAGE>
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(h) "Employee" shall mean any person, including officers
and directors, employed by the Company or any Parent or Subsidiary of the
Company. The payment of a director's fee by the Company shall not be sufficient
to constitute "employment" by the Company.
(i) "Incentive Stock Option" shall mean an Option
intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code.
(j) "Nonstatutory Stock Option" shall mean an Option not
intended to qualify as an Incentive Stock Option.
(k) "Option" shall mean a stock option granted pursuant
to the Plan.
(l) "Optioned Stock" shall mean the Common Stock subject
to an Option.
(m) "Optionee" shall mean an Employee or Consultant who
receives an Option.
(n) "Parent" shall mean a "parent corporation", whether
now or hereafter existing, as defined in Section 424(e) of the Code.
(o) "Plan" shall mean this 1990 Stock Option Plan, as
amended from time to time.
(p) "Share" shall mean a share of the Common Stock,
as adjusted in accordance with Section a11 of the Plan.
(q) "Subsidiary" shall mean a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Reserved Shares. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of shares which may be
optioned and sold under the Plan is 1,875,000 shares of Common Stock. The Shares
may be authorized, but unissued, or reacquired Common Stock.
(b) Unpurchased Shares. If an Option should expire or
become unexercisable for any reason without having been exercised in full,
the unpurchased Shares which were subject thereto shall, unless the Plan shall
have been terminated, become available for future grant under the Plan.
Notwithstanding any other provision of the Plan, shares issued under the Plan
and later repurchased by the Company shall not become available for future grant
or sale under the Plan.
(c) Annual Grant Limitation.In any fiscal year, the Board
may not grant options to purchase a number of shares greater than five
percent (5%) of the shares of the Company's Common Stock outstanding the first
day of each such fiscal year. The number of shares issuable under options
granted in any fiscal year shall be calculated net of the aggregate number of
shares subject to canceled, terminated or expired options during such fiscal
year. In the event that the Board grants options to purchase less than the
aggregate number shares available for grant in a fiscal year, such deficit would
be added to the shares available for grant in the subsequent fiscal year.
<PAGE>
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4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. If
permitted by Rule 16b-3, the Plan may be administered by different
bodies with respect to Directors, Officers who are not Directors, and
Employees who are neither Directors nor Officers.
(ii) Administration With Respect to Directors and
Officers Subject to Section 16(b). With respect to Option grants made
to Employees who are also Officers or Directors subject to Section
16(b) of the Exchange Act, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan in compliance with the
rules governing a plan intended to qualify as a discretionary plan
under Rule 16b-3, or (B) a committee designated by the Board to
administer the Plan, which committee shall be constituted to comply
with the rules governing a plan intended to qualify as a discretionary
plan under Rule 16b-3. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board.
From time to time the Board may increase the size of the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all
members of the Committee and thereafter directly administer the Plan,
all to the extent permitted by the rules governing a plan intended to
qualify as a discretionary plan under Rule 16b-3.
(iii) Administration With Respect to Other Persons
With respect to Option grants made to Employees or Consultants who are
neither Directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a committee designated by the
Board, which committee shall be constituted to satisfy state and
federal laws. Once appointed, such Committee shall serve in its
designated capacity until otherwise directed by the Board. The Board
may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by
state and federal laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the
Common Stock, in accordance with Section 8(b) of the Plan;
(ii) to select the Consultants and Employees to
whom Options may be granted hereunder;
<PAGE>
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(iii) to determine whether and to what extent
Options are granted hereunder;
(iv) to determine the number of shares of Common
Stock to be covered by each Option granted hereunder;
(v) to approve forms of agreement for use under
the Plan;
(vi) to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any award granted
hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options may be exercised
(which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or the shares of Common Stock relating thereto,
based in each case on such factors as the Administrator, in its sole
discretion, shall determine;
(vii) to reduce the exercise price of any Option
to the then current Fair Market Value if the Fair Market Value of the
Common Stock covered by such Option shall have declined since the date
the Option was granted;
(viii) to construe and interpret the terms of the
Plan;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan;
(x) to modify or amend each Option (subject to
Section 13(a) of the Plan);
(xi) to authorize any person to execute on behalf
of the Company any instrument required to effect the grant of an
Option previously granted by the Administrator;
(xii) to institute an Option Exchange Program;
(xiii) to determine the terms and restrictions
applicable to Options and any Restricted Stock; and
(xiv) to make all other determinations deemed
necessary or advisable for administering the Plan.
(c) Effect of Administrator's Decision.
The Administrator's decisions, determinations and interpretations shall be
final and binding on all Optionees and any other holders of Options.
<PAGE>
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5. Eligibility.
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.
(b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
fair market value of the Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company) exceed $100,000, such
Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Options shall be taken into
account in the order in which they were granted, and the fair market value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time, with or
without cause.
(e) The following limitations shall apply to grants of
Options to Employees:
(i) No Employee shall be granted, in any fiscal year
of the Company, Options to purchase more than 250,000 Shares.
(ii) In connection with his or her initial
employment, an employee may be granted options to purchase up to an
additional 250,000 shares which shall not count against the limit set
forth in Section 5(e)(i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's
capitalization as described in Section 11.
(iv) If an Option is canceled in the same fiscal year
of the Company in which it was granted (other than in connection with a
transaction described in Section 11), the canceled Option will be
counted against the limit set forth in Section 5(e)(i). For this
purpose, if the exercise price of an Option is reduced, the transaction
will be treated as a cancellation of the Option and the grant of a new
Option.
6. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval
by the stockholders of the Company. It shall continue in effect for a term of
ten (10) years unless sooner terminated under Section 13 of the Plan.
<PAGE>
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7. Term of Option. The term of each Option shall be no more than ten
(10) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement. However, in the case of an Option granted to
an Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement.
8. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the
time of the grant of such Incentive Stock Option, owns stock
representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than 110% of the fair market
value per Share on the date of grant.
(B) granted to any Employee, the per
Share exercise price shall be no less than 100% of the fair market
value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the
time of the grant of such Option, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price
shall be no less than 110% of the fair market value per Share on the
date of the grant.
(B) granted to any person, the per
Share exercise price may be less than 100%, but not less than 85%, of
the fair market value per Share on the date of grant if the Board
determines that a discount from the fair market value is appropriate
in lieu of the payment of a reasonable amount of salary or a cash
bonus to the optionee.
(iii) In the case of an Option granted on or after
the effective date of registration of any class of equity security of
the Company pursuant to Section 12 of the Exchange Act and prior to six
months after the termination of such registration, the per Share
exercise price shall be no less than 100% of the fair market value per
Share on the date of grant.
(b) The fair market value shall be determined by the Board in
its discretion; provided, however, that where there is a public market for the
Common Stock, the fair market value per Share shall be the mean of the bid and
asked prices (or the closing price per share if the Common Stock is listed on
the National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market) of the Common Stock for the date of grant, as reported in the
<PAGE>
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Wall Street Journal (or, if not so reported, as otherwise reported by NASDAQ)
or, in the event the Common Stock is listed on a stock exchange, the fair market
value per Share shall be the closing price on such exchange on the date of grant
of the Option, as reported in the Wall Street Journal.
(c) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Board at the time of grant and may consist entirely of (i) cash, (ii)
check, (iii) promissory note, (iv) other Shares of Common Stock which (x) either
have been owned by the Optionee more than six (6) months on the date of
surrender or were not acquired, directly or indirectly, from the Company, and
(y) have a fair market value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised, (v)
delivery of a properly executed exercise notice together with such other
documentation as the Board and the broker, if applicable, shall require to
effect an exercise of the Option and delivery to the Company of the sale or loan
proceeds required to pay the exercise price, (vi) any combination of such
methods of payment, or (vii) such other consideration and method of payment for
the issuance of Shares to the extent permitted under applicable law.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria with
respect to the Company and/or the Optionee, and as shall be permissible under
the terms of the Plan.
An Option may not be exercised for a fraction of a
Share.
An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board and
reflected in the Option Agreement, consist of any consideration and method of
payment allowable under Section 8(c) of the Plan. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 11 of the
Plan.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both
for purposes of the Plan and for sale under the Option, by the number of Shares
as to which the Option is exercised.
<PAGE>
-18-
(b) Termination of Status as an Employee or Consultant. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant, such Optionee may, but only within sixty (60) days (or such other
period of time, not exceeding three (3) months as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option) after the date of such
termination (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement), exercise his Option to the
extent that he was entitled to exercise it at the date of such termination. To
the extent that he was not entitled to exercise the Option at the date of such
termination, or if he does not exercise such Option (which he was entitled to
exercise) within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of an Optionee's Continuous
Status as an Employee or Consultant as a result of his total and permanent
disability (as defined in Section 22(e)(3) of the Code), he may, but only within
twelve (12) months from the date of such termination (but in no event later than
the date of expiration of the term of such Option as set forth in the Option
Agreement), exercise his Option to the extent he was entitled to exercise it at
the date of such termination. To the extent that he was not entitled to exercise
the Option at the date of termination, or if he does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate.
(d) Death of Optionee. In the event of the death of an
Optionee:
(i) during the term of the Option who is at the time
of his death an Employee or Consultant of the Company and who shall
have been in Continuous Status as an Employee or Consultant since the
date of grant of the Option, the Option may be exercised, at any time
within twelve (12) months following the date of death (but in no event
later than the date of expiration of the term of such Option as set
forth in the Option Agreement), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to
exercise the Option at the date of death; or
(ii) within sixty (60) days (or such other period of
time not exceeding three (3) months as is determined by the
Administrator, with such determination in the case of an Incentive
Stock Option being made at the time of grant of the Option) after the
termination of Continuous Status as an Employee or Consultant, the
Option may be exercised, at any time within twelve (12) months
following the date of death (but in no event later than the date of
expiration of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that had accrued at the date of
termination.
(e) Rule 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
<PAGE>
-19-
10. Non-Transferability of Options. The Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization, Dissolution,
Merger, Asset Sale or Change of Control.
(a) Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
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 of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. However, in the event the Common Stock
becomes listed on a national securities exchange or is designated or approved
for designation upon notice of issuance as a national market system security on
an interdealer quotation system by NASDAQ, such that the exemption provided
under Section 25100(o) of the California Corporations Code, as in effect on
January 1, 1992, applies to the Common Stock, the Board may, alternatively and
in the exercise of its sole discretion, declare that any Option shall terminate
as of a date fixed by the Board and give each Optionee the right to exercise his
or her Option as to all or any part of the Optioned Stock, including Shares as
to which the Option would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option shall be assumed or an
equivalent option or right shall be substituted by the successor corporation or
a Parent or Subsidiary of the successor corporation. Moreover, subject to
subsection (d) below, in the event the Common Stock becomes listed on a national
securities exchange or is designated or approved for designation upon notice of
issuance as a national market system security on an interdealer quotation system
by NASDAQ, such that the exemption provided under Section 25100(o) of the
California Corporations Code, as in effect on January 1, 1992, applies to the
Common Stock, and in the further event that the successor corporation does not
<PAGE>
-20-
agree to assume the Option or to substitute an equivalent option or right, the
Administrator shall, in lieu of such assumption or substitution, provide for the
Optionee to have the right to exercise the Option as to all or a portion of the
Optioned Stock, including Shares as to which it would not otherwise be
exercisable. If the Administrator makes an Option exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option will terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase, for
each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation and the
participant, provide for the consideration to be received upon the exercise of
the Option, for each Share of Optioned Stock subject to the Option, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
12. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Board makes the determination granting
such Option. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act (or any other applicable law or regulation), the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such a
degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
<PAGE>
-21-
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
16. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
-22-
Exhibit 4.2
<PAGE>
-23-
MEGATEST CORPORATION
DIRECTOR STOCK OPTION PLAN
1. Purpose of the Plan. The purposes of this Director Option Stock Plan
are to attract and retain the best available personnel for service as Outside
Directors (as defined herein) of the Company, to provide additional incentive to
the Outside Directors of the Company to serve as Directors, and to encourage
their continued service on the Board.
All options granted hereunder shall be "nonstatutory stock
options."
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986,
as amended.
(c) "Common Stock" means the Common Stock of the Company.
(d) "Company" means the Megatest Corporation, a Delaware
corporation.
(e) "Continuous Status as a Director" means the absence
of any interruption or termination of service as a Director.
(f) "Director" means a member of the Board.
(g) "Employee" means any person, including officers
and Directors, employed by the Company or any Parent or Subsidiary of the
Company. The payment of a Director's fee by the Company shall not be sufficient
in and of itself to constitute "employment" by the Company.
(h) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(i) "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of a
Share of Common Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such system or exchange (or
the exchange with the greatest volume of trading in Common Stock) on the date of
grant (or, in the event such date is not a market trading day, on the last
market trading day prior to the date of grant), as reported in The Wall Street
Journal or such other source as the Board deems reliable;
<PAGE>
-24-
(ii) If the Common Stock is quoted on the NASDAQ
System (but not on the National Market System thereof) or regularly quoted
by a recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the bid and
asked prices for the Common Stock on the date of grant (or, in the event such
date is not a market trading day, on the last market trading day prior to the
date of grant), as reported in The Wall Street Journal or such other source as
the Board deems reliable, or;
(iii) In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.
(j) "Option" means a stock option granted pursuant to
the Plan.
(k) "Optioned Stock" means the Common Stock subject to
Option.
(l) "Optionee" means an Outside Director who receives an
an Option.
(m) "Outside Director" means a Director who is not an
Employee.
(n) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(o) "Plan" means this Director Stock Option Plan.
(p) "Share" means a share of the Common Stock, as
adjusted in accordance with Section 10 of the Plan.
(q) "Subsidiary" means a "subsidiary corporation,"
whether now or hereafter existing, as defined in Section 424 (f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 10 of the Plan, the maximum aggregate number of shares which may be
optioned and sold under the Plan is 50,000 Shares, as adjusted to give effect to
the 1-for-4 reverse stock split effected in December 1992, of Common Stock (the
"Pool"). The Shares may be authorized but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan.
4. Administration of and Grants of Options under the Plan.
(a) Administrator. Except as otherwise required herein,
the Plan shall be administered by the Board.
<PAGE>
-25-
(b) Procedure for Grants. The provisions set forth
in this Section 4(b) shall not be amended more than once every six months,
other than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder. All grants of Option
to Outside Directors under this Plan shall be automatic and non-discretionary
and shall be made strictly in accordance with the following provisions:
(i) No person shall have any discretion to
select which Outside Directors shall be granted Options or to determine the
number of Shares to be covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be
automatically granted an Option to purchase 5,000 Shares, as adjusted to
give effect to the 1-for-4 reverse stock split effected in December 1992 (the
"First Option"), on the date on which the later of the following events occurs:
(A) the closing date of the first firm commitment underwritten public offering
of the Common Stock pursuant to an effective Form S-1 registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
Common Stock for the account of the Company, or (B) the date on which such
person first becomes an Outside Director, whether through election by the
stockholders of the Company or appointment by the Board to fill a vacancy.
(iii) Notwithstanding the provisions of
subsection (ii) hereof, any grant of an Option made before the Company has
obtained stockholder approval of the Plan in accordance with Section 16 hereof
shall be conditioned upon obtaining such stockholder approval of the Plan in
accordance with Section 16 hereof.
(iv) The terms of a First Option granted
hereunder shall be as follows:
(A) the term of the First Option shall
be ten (10) years.
(B) the First Option shall be
exercisable only while the Outside Director remains a Director of the
Company, except as set forth in Section 8 hereof.
(C) the exercise price per Share shall
be 100% of the fair market value per Share on the date of grant of the
First Option.
(D) the First Option shall become
exercisable in installments cumulatively as to one-sixteenth (1/16th) of
the Shares subject to the First Option for every three months elapsed from the
date of grant thereof.
(v) In the event that any Option granted under
the Plan would cause the number of Shares subject to outstanding Options
plus the number of Shares previously purchased under Options to exceed the Pool,
then the remaining Shares available for Option grant shall be granted under
Options to the Outside Directors on a pro rata basis. No further grants shall be
made until such time, if any, as additional Shares become available for grant
under the Plan through action of the stockholders to increase the number of
Shares which may be issued under the Plan or through cancellation or expiration
of Options previously granted hereunder.
<PAGE>
-26-
(c) Powers of the Board. Subject to the provisions
and restrictions of the Plan, the Board shall have the authority, in its
discretion: (i) to determine, upon review of relevant information and in
accordance with Section 2(i) of the Plan, the Fair Market Value of the Common
Stock; (ii) to interpret the Plan; (iii) to prescribe, amend and rescind rules
and regulations relating to the Plan; (iv) to authorize any person to execute on
behalf of the Company any instrument required to effectuate the grant of an
Option previously granted hereunder; and (v) to make all other determinations
deemed necessary or advisable for the administration of the Plan.
(d) Effect of Board's Decision. All decisions,
determinations and interpretations of the Board shall be final.
5. Eligibility. Options may be granted only to Outside
Directors holding less than five percent (5%) of the outstanding Common
Stock. All Options shall be automatically granted in accordance with the terms
set forth in Section 4(b) hereof.
The Plan shall not confer upon any Optionee any right with
respect to continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which the Director
or the Company may have to terminate his or her directorship at any time.
6. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company as described in Section 16 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 11 of the Plan.
7. Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise price for
Optioned Stock shall be 100% of the Fair Market Value per Share on the date of
grant of the Option.
(b) Form of Consideration. The consideration to be
paid for the Shares to be issued upon exercise of an Option, including the
method of payment, shall be determined by the Board and may consist entirely of
(i) cash; (ii) check; (iii) promissory note; (iv) other shares which (A) in the
case of Shares acquired upon exercise of an Option, have been owned by the
Optionee for more than six (6) months on the date of surrender, and (B) have a
Fair market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised; (v) delivery of a
properly executed exercise notice together with such other documentation as the
Board and the broker, if applicable, shall require to effect an exercise of the
Option and delivery to the Company of the sale or loan proceeds required to pay
the exercise price; (vi) any combination of the foregoing methods of payment; or
(vii) such other consideration and method of payment for the issuance of Shares
to the extent permitted under applicable law.
<PAGE>
-27-
8. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times as are set forth in
Section 4(b) hereof; provided, however, that no Options shall be exercisable
until stockholder approval of the Plan in accordance with Section 16 hereof has
been obtained.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may consist of any consideration and method of payment
allowable under Section 7(b) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 10 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Rule 16B-3. Options granted to Outside Directors must
comply with the applicable provisions of Rule 16b-3 promulgated under the
Exchange Act or any successor thereto and shall contain such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
(c) Termination of Continuous Status as a Director. In the
event an Optionee's Continuous Status as a Director terminates (other than upon
the Optionee's death or total and permanent disability (as defined in Section
22(e)(3) of the Code)), the Optionee may exercise his or her Option, but only
within 60 days from the date of such termination, and only to the extent that
the Optionee was entitled to exercise it at the date of such termination (but in
no event later than the expiration of its 10-year term). To the extent that the
Optionee was not entitled to exercise an Option at the date of such termination,
and to the extent that the Optionee does not exercise such Option (to the extent
otherwise so entitled) within the time specified herein, the Option shall
terminate.
(d) Disability of Optionee. In the event Optionee's
Continuous Status as a Director terminates as a result of total and
permanent disability (as defined in Section 22(e)(3) of the Code), the Optionee
may exercise his or her Option, but only within 12 months from the date of such
termination, and only to the extent that the Optionee was entitled to exercise
it at the date of such termination (but in no event later than the expiration of
its 10-year term). To the extent that the Optionee was not entitled to exercise
an Option at the date of termination, or if he or she does not exercise such
Option (to the extent otherwise so entitled) within the time specified herein,
the Option shall terminate.
<PAGE>
-28-
(e) Death of Optionee. In the event of an Optionee's death,
the Optionee's estate or a person who acquired the right to exercise the Option
by bequest or inheritance may exercise the Option, but only within 12 months
following the date of death, and only to the extent that the Optionee was
entitled to exercise it at the date of death (but in no event later than the
expiration of its 10-year term). To the extent that the Optionee was not
entitled to exercise an Option at the date of death, and to the extent that the
Optionee's estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.
9. Non-Transferability of Options. The Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
10. Adjustments Upon Changes in Capitalization, Dissolution,
Merger, Asset Sale or Change of Control.
(a) Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
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 of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. However, in the event the Common Stock
becomes listed on a national securities exchange or is designated or approved
for designation upon notice of issuance as a national market system security on
an interdealer quotation system by NASDAQ, such that the exemption provided
under Section 25100(o) of the California Corporations Code, as in effect on
<PAGE>
-29-
January 1, 1992, applies to the Common Stock, the Board may, alternatively and
in the exercise of its sole discretion, declare that any Option shall terminate
as of a date fixed by the Board and give each Optionee the right to exercise his
or her Option as to all or any part of the Optioned Stock, including Shares as
to which the Option would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option shall be assumed or an
equivalent option or right shall be substituted by the successor corporation or
a Parent or Subsidiary of the successor corporation. In the event the Common
Stock becomes listed on a national securities exchange or is designated or
approved for designation upon notice of issuance as a national market system
security on an interdealer quotation system by NASDAQ, such that the exemption
provided under Section 25100(o) of the California Corporations Code, as in
effect on January 1, 1992, applies to the Common Stock, and in the further event
that the successor corporation does not agree to assume the Option or to
substitute an equivalent option or right, the Administrator shall, in lieu of
such assumption or substitution, provide for the Optionee to have the right to
exercise the Option as to all or a portion of the Optioned Stock, including
Shares as to which it would not otherwise be exercisable. If the Administrator
makes an Option exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee that
the Option shall be fully exercisable for a period of fifteen (15) days from the
date of such notice, and the Option will terminate upon the expiration of such
period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or sale of assets, the option or right confers
the right to purchase, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation and the
participant, provide for the consideration to be received upon the exercise of
the Option, for each Share of Optioned Stock subject to the Option, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
11. Amendment and Termination of the Plan.
(a) Amendment and Termination. Except as set forth in Section
4, the Board may at any time amend, alter, suspend or discontinue the Plan, but
no amendment, alteration, suspension or discontinuation shall be made which
would impair the rights of any Optionee under any grant theretofore made,
without his or her consent. In addition, to the extent necessary and desirable
to comply with Rule 16b-3 under the Exchange Act (or any other applicable law or
regulation), the Company shall obtain stockholder approval of any Plan amendment
in such a manner and to such a degree as required.
<PAGE>
-30-
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated.
12. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date determined in accordance with Section
4(b) hereof. Notice of the determination shall be given to each Outside Director
to whom an Option is so granted within a reasonable time after the date of such
grant.
13. Conditions Upon Issuance of Shares. Shares shall not be
issued pursuant to the exercise of an Option unless the exercise of such
Option and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, state securities laws, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any current intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
14. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
15. Option Agreement. Options shall be evidenced by written
option agreements in such form as the Board shall approve.
16. Stockholder Approval. Continuance of the Plan shall be
subject to approval by the stockholders of the Company at or prior to the
first annual meeting of stockholders held subsequent to the granting of an
Option hereunder. Such stockholder approval shall be obtained in the degree and
manner required under applicable state and federal law.
<PAGE>
-31-
MEGATEST CORPORATION
DIRECTOR STOCK OPTION AGREEMENT
Megatest Corporation, a Delaware corporation (the "Company"), has
granted to -----------------------------------(the "Optionee"), an option to
purchase a total of 5,000 shares of the Company's Common Stock (the "Optioned
Stock"), at the price determined as provided herein, and in all respects subject
to the terms, definitions and provisions of the Director Stock Option Plan (the
"Plan") adopted by the Company which is incorporated herein by reference. The
terms defined in the Plan shall have the same defined meanings herein.
1. Nature of the Option. This Option is a nonstatutory option
and is not intended to qualify for any special tax benefits to the Optionee.
2. Exercise Price. The exercise price is $---- for each share
of Common Stock, which is 100% of the Fair Market Value of the Common Stock
as determined on the date of grant of this Option.
3. Exercise of Option. This Option shall be exercisable during
its term in accordance with the provisions of Section 8 of the Plan as follows:
(a) Right to Exercise.
(i) This Option shall become exercisable in
installments cumulatively with respect to one-sixteenth (1/16th) of the
Optioned Stock for every three months elapsed from the date of grant, so that
one hundred percent (100%) of the Optioned Stock shall be exercisable four years
after the date of grant; provided, however, that in no event shall any Option be
exercisable prior to the date the stockholders of the Company approve the Plan.
(ii) This Option may not be exercised for a
fraction of a share.
(iii) In the event of Optionee's death, disability
is governed by Sections or other termination of service as a Director, the
exercisability of the Option 6, 7 and 8 of this Agreement.
(b) Method of Exercise. This Option shall be exercisable
by written notice which shall state the election to exercise the Option,
the number of Shares in respect of which the Option is being exercised, and such
other representations and agreements as to the holder's investment intent with
respect to such Shares of Common Stock as may be required by the Company
pursuant to the provisions of the Plan. Such written notice shall be signed by
the Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The written notice shall be accompanied by payment of
the exercise price.
4. Method of Payment. Payment of the exercise price shall be by
any of the following, or a combination thereof, at the election of the Optionee:
<PAGE>
-32-
(a) cash;
(b) check;
(c) surrender of other shares which (i) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee
for more than six months on the date of surrender, and (ii) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised; or
(d) delivery of a properly executed exercise notice
together with such other documentation as the Board and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price.
5. Restrictions on Exercise. This Option may not be exercised
if the issuance of such Shares upon such exercise or the method of payment
of consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulations, or if such issuance
would not comply with the requirements of any stock exchange upon which the
Shares may then be listed. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
6. Termination of Continuous Status as a Director. In the
event Optionee's Continuous Status as a Director terminates (other than
upon the Optionee's death or permanent and total disability (as defined in
Section 22(e)(3) of the Code)), the Optionee may exercise his or her Option, but
only within 60 days from the date of such termination, and only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of its 10-year term). To the extent
that the Optionee was not entitled to exercise this Option at the date of such
termination, and to the extent that Optionee does not exercise this Option (to
the extent otherwise so entitled) within the time specified herein, the Option
shall terminate.
7. Disability of Optionee. In the event Optionee's Continuous
Status as a Director terminates as a result of his total and permanent
disability (as defined in Section 22(e)(3) of the Code), Optionee may exercise
his or her Option, but only within 12 months from the date of termination, and
only to the extent that the Optionee was entitled to exercise it at the date of
such termination (but in no event later than the date of expiration of its
10-year term). To the extent that Optionee was not entitled to exercise this
Option at the date of termination, and to the extent Optionee does not exercise
this Option (to the extent otherwise so entitled) within the time specified
herein, the Option shall terminate.
8. Death of Optionee. In the event of the Optionee's death,
the Optionee's estate or a person who acquired the right to exercise the
Option by bequest or inheritance may exercise the Option, but only within 12
months following the date of death, and only to the extent that the Optionee was
entitled to exercise it at the date of death (but in no event later than the
<PAGE>
-33-
date of expiration of its 10-year term). To the extent that Optionee was not
entitled to exercise this Option at the date of death, and to the extent
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise this Option (to the extent otherwise so
entitled) within the time specified herein, the Option shall terminate.
9. Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent
or distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
10. Term of Option. This Option may not be exercised more than
ten (10) years from the date of grant of this Option, and may be exercised
during such term only in accordance with the Plan and the terms of this Option.
11. Taxation Upon Exercise of Option. Optionee understands that,
upon exercise of this Option, he will recognize income for tax purposes in
an amount equal to the excess of the then Fair Market Value of the Shares
purchased over the exercise price paid for such Shares. (Since the Optionee is
subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, the
measurement and timing of such income may be deferred, and the Optionee is
advised to contact a tax advisor concerning the desirability of filing an 83(b)
election in connection with the exercise of the Option.) Upon a resale of such
Shares by the Optionee, any difference between the sale price and the Fair
Market Value of the Shares on the date of exercise of the Option, to the extent
not included in income as described above, will be treated as capital gain or
loss.
DATE OF GRANT:
-------------
MEGATEST CORPORATION,
a Delaware corporation
By:
------------------------
Optionee acknowledges receipt of a copy of the Plan, a copy of which is
annexed hereto, and represents that he is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board upon any questions arising
under the Plan.
Dated:
------------
-------------------------------------------
Optionee
<PAGE>
-34-
EXHIBIT A
---------
MEGATEST CORPORATION DIRECTOR STOCK OPTION PLAN
NOTICE OF EXERCISE OF STOCK OPTION
Megatest Corporation
1321 Ridder Park Drive
San Jose, California 95131
Attention: Secretary
Ladies and Gentlemen:
The undersigned hereby elects to exercise the option indicated below
with respect to the number of shares of Common Stock of Megatest Corporation
(the "Company") set forth:
Option Grant Date:
----------------------------------
Type of Option: Nonstatutory
Number of Shares Being Exercised:
------------------- shares
Exercise Price Per Share: $
-------------------------
Total Exercise Price: $
-----------------------------
Method of Payment: |_| Cash
|_| Check
|_| Surrender of previously issued Shares
|_| Cashless Exercise
Enclosed herewith is payment in full of the total exercise price and a
copy of the Option Agreement.
My exact name, address and social security number for purposes of the
stock certificates to be issued and the stockholder list of the Company are:
Name:
---------------------------------------------------
Address:
------------------------------------------------
Social Security Number:
------------------------------------
Sincerely,
Dated:
-------------------
---------------------------------
(Optionee's Signature)
-35-
Exhibit 5.1
<PAGE>
-36-
December 1, 1995
Teradyne, Inc.
321 Harrison Avenue
Boston, Massachusetts 02118
Re: Registration Statement on Form S-8 Relating to the
Megatest Corporation 1990 Stock Option Plan
and the Megatest Corporation Director Stock Option
Plan (collectively, the "Plans")
--------------------------------
Ladies and Gentlemen:
Reference is made to the above-captioned Registration Statement on Form
S-8 (the "Registration Statement") filed by Teradyne, Inc. (the "Company") with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to an aggregate of 603,401 shares of Common Stock, $.125 par
value, of the Company (the "Shares").
We are counsel to the Company and are familiar with the proceedings of its
stockholders and Board of Directors. We have examined original or certified
copies of the Company's certificate of incorporation, as amended, the Company's
by-laws, as amended, the corporate records of the Company to the date hereof,
and such other certificates, documents, records and materials as we have deemed
necessary in connection with this opinion letter.
We are members only of the Bar of the Commonwealth of Massachusetts and
are not experts in, and express no opinion regarding, the laws of any
jurisdiction other than the Commonwealth of Massachusetts and the United States
of America, and the General Corporation Law of the State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that the
Shares issued or proposed to be issued by the Company pursuant to the Plans will
be, upon receipt of the consideration provided for in the Plans, validly issued,
fully paid and nonassessable after issuance of such Shares in accordance with
the terms of the Plans.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Testa, Hurwitz & Thibeault
TESTA, HURWITZ & THIBEAULT
<PAGE>
-37-
Exhibit 23.1
------------
<PAGE>
-38-
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated January 20, 1995, on our audits of the consolidated
financial statements of Teradyne, Inc. as of December 31, 1994 and 1993, and for
each of the three years in the period ended December 31, 1994, appearing in the
Annual Report on Form 10-K of Teradyne, Inc. filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1934.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
December 1, 1995
