EXHIBIT 10.2

 

PARAMETRIC TECHNOLOGY CORPORATION

1997 INCENTIVE STOCK OPTION PLAN

 

1. Purpose

 

The purpose of the Parametric Technology Corporation 1997 Incentive Stock Option
Plan (the “Plan”) is to attract and retain key employees and consultants of the
Company and its Affiliates, to provide an incentive for them to achieve
long-range performance goals, and to enable them to participate in the long-term
growth of the Company.

 

2. Definitions

 

“Affiliate” means any business entity in which the Company owns directly or
indirectly 50% or more of the total voting power or has a significant financial
interest as determined by the Committee.

 

“Board” means the Board of Directors of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any successor law.

 

“Committee” means one or more committees each comprised of not less than two
members of the Board appointed by the Board to administer the Plan or a
specified portion thereof. If a Committee is authorized to grant Options to a
Reporting Person or a “covered employee” within the meaning of Section 162(m) of
the Code, each member shall be a “Non- Employee Director” or the equivalent
within the meaning of Rule 16b-3 under the Exchange Act or an “outside director”
or the equivalent within the meaning of Section 162(m) of the Code,
respectively.

 

“Common Stock” or “Stock” means the Common Stock, $.01 par value, of the
Company.

 

“Company” means Parametric Technology Corporation.

 

“Designated Beneficiary” means the beneficiary designated by a 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. In the absence of an
effective designation by a Participant, “Designated Beneficiary” means the
Participant’s estate.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, or any successor law.

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“Fair Market Value” means, with respect to Common Stock or any other property,
the fair market value of such property as determined by the Committee in good
faith or in the manner established by the Committee from time to time.

 

“Incentive Stock Option” - See Section 6(a).

 

“Nonstatutory Stock Option” - See Section 6(a).

 

“Option” - Unless the context otherwise requires, an Incentive Stock Option or a
Nonstatutory Stock Option.

 

“Participant” means a person selected by the Committee to receive an Option
under the Plan.

 

“Reporting Person” means a person subject to Section 16 of the Exchange Act.

 

3. Administration

 

The Plan shall be administered by the Committee, provided that the Board may in
any instance perform any of the functions of the Committee. The Committee shall
have authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing the operation of the Plan as it shall from time to time
consider advisable, and to interpret the provisions of the Plan. The Committee’s
decisions shall be final and binding. To the extent permitted by applicable law,
the Committee may delegate to one or more executive officers of the Company the
power to grant Options to Participants who are not Reporting Persons or covered
employees and all determinations under the Plan with respect thereto, provided
that the Committee shall fix the maximum amount of such Options for all such
Participants and a maximum for any one Participant.

 

4. Eligibility

 

All employees and, in the case of Nonstatutory Stock Options, consultants of the
Company or any Affiliate, capable of contributing significantly to the
successful performance of the Company, other than a person who has irrevocably
elected not to be eligible, are eligible to be Participants in the Plan.
Incentive Stock Options may be granted only to persons eligible to receive such
Options under the Code.

 

5. Stock Available for Options

 

(a) Amount. Subject to adjustment under subsection (b), Options may be granted
under the Plan for up to 12,000,000 shares of Common Stock. If any Option
expires or is terminated unexercised or is forfeited or settled in a manner that
results in fewer shares outstanding than were granted, the shares subject to
such Option, to the extent of such expiration, termination, forfeiture or
decrease, shall again be available for grant under the Plan. Common Stock issued
through the assumption or substitution of outstanding grants from an acquired
company shall not reduce the shares available for grant under the Plan. Shares
issued under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.

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(b) Adjustment. In the event of any stock dividend, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, or other transaction affecting the Common
Stock, then (subject in the case of Incentive Stock Options to any limitation
required under the Code) (i) the number and kind of shares in respect of which
Options may be granted under the Plan, (ii) the number and kind of shares
subject to outstanding Options, and (iii) the exercise price with respect to any
of the foregoing shall be proportionately adjusted to the extent required
equitably to preserve the benefits available hereunder, provided that the number
of shares subject to any Option shall always be a whole number, and if
considered appropriate, the Committee may make provision for a cash payment with
respect to an outstanding Option.

 

(c) Limit on Individual Grants. The maximum number of shares of Common Stock
subject to Options that may be granted to any Participant in the aggregate in
any calendar year shall not exceed 2,000,000 shares, subject to adjustment under
subsection (b) above.

 

6. Stock Options

 

(a) Grant of Options. Subject to the provisions of the Plan, the Committee may
grant Options to purchase shares of Common Stock (i) complying with the
requirements of Section 422 of the Code or any successor provision and any
regulations thereunder (“Incentive Stock Options”) and (ii) not intended to
comply with such requirements (“Nonstatutory Stock Options”). The Committee
shall determine the number of shares subject to each Option and the exercise
price therefor, which shall not be less than 100% of the Fair Market Value of
the Common Stock on the date of grant. No Incentive Stock Option may be granted
hereunder more than ten years after the effective date of the Plan.

 

(b) Terms and Conditions. Each Option shall have a term no longer than ten years
from the date of grant and shall be exercisable at the time(s) and subject to
the terms and conditions set forth in the respective form of option certificate
included in Appendix I hereto or as the Committee may otherwise specify in the
applicable grant or thereafter. The Committee may impose such conditions with
respect to the exercise of Options, including conditions relating to applicable
federal or state securities laws, as it considers necessary or advisable.

 

(c) Payment. No shares shall be delivered pursuant to any exercise of an Option
until payment in full of the exercise price therefor is received by the Company.
Such payment may be made in whole or in part in cash or, to the extent permitted
by the Committee at or after the grant of the Option, by delivery of shares of
Common Stock owned by the Participant or by retaining shares otherwise issuable
pursuant to the Option, in each case valued at their Fair Market Value on the
date of delivery or retention, or such other lawful consideration, including a
payment commitment of a financial or brokerage institution, as the Committee may
determine.

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7. Termination of Employment or Engagement

 

If the Optionholder’s status as an employee or consultant of (a) the Company,
(b) an Affiliate, or (c) a corporation (or parent or subsidiary corporation of
such corporation) issuing or assuming a stock option in a transaction to which
section 424(a) of the Code applies, is terminated for any reason (voluntary or
involuntary) and the period of exercisability for a particular Option following
such termination has not been specified by the Board, each such Option then held
by that Participant shall expire to the extent not previously exercised ten (10)
calendar days after such Participant’s employment or engagement is terminated,
except that -

 

(a) If the Participant is on military, sick leave or other bona fide leave of
absence (such as temporary employment by the federal government), his or her
employment or engagement with the Company will be treated as continuing intact
if the period of such leave does not exceed ninety (90) days, or, if longer, so
long as the Participant’s right to reemployment or the survival of his or her
service arrangement with the Company is guaranteed either by statute or by
contract; otherwise, the Participant’s employment or engagement will be deemed
to have terminated on the 91st day of such leave.

 

(b) If the Participant’s employment is terminated by reason of his or her
retirement from the Company at normal retirement age, each Option then held by
the Participant, to the extent exercisable at retirement, may be exercised by
the Participant at any time within three (3) months after such retirement unless
terminated earlier by its terms.

 

(c) If the Participant’s employment or engagement is terminated by reason of his
or her death, each Option then held by the Participant, to the extent
exercisable at the date of death, may be exercised at any time within one year
after that date (unless terminated earlier by its terms) by the person(s) to
whom the Participant’s option rights pass by will or by the applicable laws of
descent and distribution.

 

(d) If the Participant’s employment or engagement is terminated by reason of his
or her becoming permanently and totally disabled, each Option then held by the
Participant, to the extent exercisable upon the occurrence of permanent and
total disability, may be exercised by the Participant at any time within one (1)
year after such occurrence unless terminated earlier by its terms. For purposes
hereof, an individual shall be deemed to be “permanently and totally disabled”
if he or she is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. Any determination of
permanent and total disability shall be made in good faith by the Company on the
basis of a report signed by a qualified physician.

 

8. General Provisions Applicable to Options

 

(a) Limitations on Transferability. Options shall not be transferable by the
recipient other than by will or the laws of descent and distribution and are
exercisable during such person’s lifetime only by such person or by such
person’s guardian or legal representative; provided that the Committee may in
its discretion waive such restriction in any case.

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(b) Documentation. Each Option under the Plan shall be evidenced by a written
stock option certificate delivered to the Participant specifying the terms and
conditions thereof and containing such other terms and conditions not
inconsistent with the provisions of the Plan as the Committee considers
necessary or advisable to achieve the purposes of the Plan or to comply with
applicable tax and regulatory laws and accounting principles.

 

(c) Committee Discretion. Options may be granted alone, in addition to or in
relation to any other Option. The terms of each Option need not be identical,
and the Committee need not treat Participants uniformly. Except as otherwise
provided by the Plan or a particular Option, any determination with respect to
an Option may be made by the Committee at the time of grant or at any time
thereafter.

 

(d) Dividends and Cash Options. In the discretion of the Committee, any Option
under the Plan may provide the Participant with (i) dividends or dividend
equivalents payable (in cash or in the form of Options under the Plan) currently
or deferred with or without interest, and (ii) cash payments in lieu of or in
addition to an Option.

 

(e) Change in Control. In order to preserve a Participant’s rights under an
Option in the event of a change in control (as defined by the Committee) of the
Company, the Committee in its discretion may, at the time an Option is granted
or at any time thereafter, take one or more of the following actions: (i)
provide for the acceleration of any time period relating to the exercise of the
Option, (ii) provide for payment to the Participant of cash or other property
with a Fair Market Value equal to the value that would have been received upon
the exercise of the Option had the Option been exercised upon the change in
control, (iii) adjust the terms of the Option in a manner determined by the
Committee to reflect the change in control, (iv) cause the Option to be assumed,
or new rights substituted therefor, by another entity, or (v) make such other
provision as the Committee may consider equitable to Participants and in the
best interests of the Company.

 

(f) [Reserved]

 

(g) Withholding Taxes. The Participant shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of Options under the Plan no later than the date
of the event creating the tax liability. The Company and its Affiliates may, to
the extent permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to the Participant. In the Committee’s discretion, the
Participant may pay any taxes due with respect to an Option in whole or in part
in shares of Common Stock, including shares retained from the Option creating
the tax obligation, valued at their Fair Market Value on the date of retention
or delivery.

 

(h) Foreign Nationals. Options may be granted to Participants who are foreign
nationals or employed outside the United States on such terms and conditions
different from those specified in the Plan as the Committee considers necessary
or advisable to achieve the purposes of the Plan or to comply with applicable
laws.

 

(i) Amendment of Option. The Committee may amend, modify or terminate any
outstanding Option in any respect, including converting an Incentive Stock
Option to a

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Nonstatutory Stock Option, provided that the Participant’s consent to such
action shall be required unless the Committee determines that the action, taking
into account any related action, would not materially and adversely affect the
Participant. The Committee shall not, without further approval of the
stockholders of the Company, authorize the amendment of any outstanding option
to reduce the option price. Furthermore, no option shall be canceled and
replaced with options having a lower option price or base price without approval
of the stockholders of the Company.

 

9. Miscellaneous

 

(a) No Right To Employment. No person shall have any claim or right to be
granted an Option. Each employee of the Company or any of its Affiliates is an
employee-at-will (that is to say that either the Participant or the Company or
any Affiliate may terminate the employment relationship at any time for any
reason or no reason at all) unless, and only to the extent, provided in a
written employment agreement for a specified term executed by the chief
executive officer of the Company or his duly authorized designee or the
authorized signatory of any Affiliate. Neither the adoption, maintenance, nor
operation of the Plan nor any Option hereunder shall confer upon any employee of
the Company or of any Affiliate any right with respect to the continuance of
his/her employment by the Company or any such Affiliate nor shall they interfere
with the right of the Company (or Affiliate) to terminate any employee at any
time or otherwise change the terms of employment, including, without limitation,
the right to promote, demote or otherwise re-assign any employee from one
position to another within the Company or any Affiliate.

 

(b) Effect of Grant. Participant shall not earn any Options granted hereunder
until such time as all the conditions put forth herein which are required to be
met in order to exercise the Option have been fully satisfied.

 

(c) No Rights As Stockholder. Subject to the provisions of the applicable
Option, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed under
the Plan until he or she becomes the holder thereof.

 

(d) Effective Date. Subject to the approval of the stockholders of the Company,
the Plan shall be effective on the date of its approval by the Board.

 

(e) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time, subject to any stockholder approval that the Board
determines to be necessary or advisable.

 

(f) Governing Law. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of Massachusetts.

 

(g) Complete Agreement The Plan constitutes the complete understanding of the
parties regarding the subject matter hereof and supersedes all prior
contemporaneous agreements of the parties, whether written or oral. This Plan
may be amended, altered, or modified only by a writing, specifying such
amendment, alteration or modification, signed by both parties.

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Adopted at the November 14, 1996 Board of Directors Meeting.

Approved at the 1997 Annual Meeting of Stockholders.

As amended through July 29, 2004

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APPENDIX I

 

No.             

               Shares

 

PARAMETRIC TECHNOLOGY CORPORATION

1997 Incentive Stock Option Plan

 

Incentive Stock Option Certificate

 

Parametric Technology Corporation (the “Company”), a Massachusetts corporation,
hereby grants to the person named below an option to purchase shares of Common
Stock, $0.01 par value, of the Company (the “Option”) under and subject to the
Company’s 1997 Incentive Stock Option Plan (the “Plan”) exercisable on the
following terms and conditions set forth below and those attached hereto and in
the Plan:

 

Name of Optionholder:

   _____________________

Address:

   _____________________      _____________________

Social Security No.

   _____________________

Number of Shares:

   _____________

Option Price:

   _____________

Date of Grant:

     _____________     

 

Exercisability Schedule:

   After    , 19     , as to              shares,      after    , 19     , as to
             additional shares,      after    , 19     , as to             
additional shares,      after    , 19     , as to              additional
shares,      after    , 19     , as to              additional shares.

Expiration Date:

             _____________

 

This Option is intended to be treated as an Incentive Stock Option under section
422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

By acceptance of this Option, the Optionholder agrees to the terms and
conditions set forth above and those attached hereto and in the Plan.

 

OPTIONHOLDER

  PARAMETRIC TECHNOLOGY CORPORATION

By:

 

 

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  By:  

 

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PARAMETRIC TECHNOLOGY CORPORATION 1997 INCENTIVE STOCK OPTION PLAN

Incentive Stock Option Terms And Conditions

 

1. Plan Incorporated by Reference. This Option is issued pursuant to the terms
of the Plan and may be amended as provided in the Plan. Capitalized terms used
and not otherwise defined in this certificate have the meanings given to them in
the Plan. This certificate does not set forth all of the terms and conditions of
the Plan, which are incorporated herein by reference. The Committee administers
the Plan and its determinations regarding the operation of the Plan are final
and binding. Copies of the Plan may be obtained upon written request without
charge from the Corporate Counsel of the Company.

 

2. Option Price. The price to be paid for each share of Common Stock issued upon
exercise of the whole or any part of this Option is the Option Price set forth
on the face of this certificate.

 

3. Exercisability Schedule. This Option may be exercised at any time and from
time to time for the number of shares and in accordance with the exercisability
schedule set forth on the face of this certificate, but only for the purchase of
whole shares. This Option may not be exercised as to any shares after the
Expiration Date.

 

4. Method of Exercise. To exercise this Option, the Optionholder shall deliver
written notice of exercise to the Company specifying the number of shares with
respect to which the Option is being exercised accompanied by payment of the
Option Price for such shares in cash, by certified check or in such other form,
including shares of Common Stock of the Company valued at their Fair Market
Value on the date of delivery or a payment commitment of a financial or
brokerage institution, as the Committee may approve. Promptly following such
notice, the Company will deliver to the Optionholder a certificate representing
the number of shares with respect to which the Option is being exercised.

 

5. No Right To Employment. No person shall have any claim or right to be granted
an Option. Each employee of the Company or any of its Affiliates is an
employee-at-will (that is to say that either the Participant or the Company or
any Affiliate may terminate the employment relationship at any time for any
reason or no reason at all) unless, and only to the extent, provided in a
written employment agreement for a specified term executed by the chief
executive officer of the Company or his duly authorized designee or the
authorized signatory of any Affiliate. Neither the adoption, maintenance, nor
operation of the Plan nor any Option hereunder shall confer upon any employee of
the Company or of any Affiliate any right with respect to the continuance of
his/her employment by the Company or any such Affiliate nor shall they interfere
with the right of the Company (or Affiliate) to terminate any employee at any
time or otherwise change the terms of employment, including, without limitation,
the right to promote, demote or otherwise re-assign any employee from one
position to another within the Company or any Affiliate.

 

6. Effect of Grant. Participant shall not earn any Options granted hereunder
until such time as all the conditions put forth herein and in the Plan which are
required to be met in order to exercise the Option have been fully satisfied.

 

7. Recapitalization, Mergers, Etc. As provided in the Plan, in the event of
corporate transactions affecting the Company’s outstanding Common Stock, the
Committee shall equitably adjust the number and kind of shares subject to this
Option and the exercise price hereunder or make provision for a cash payment. If
such transaction involves a consolidation or merger of the Company with another
entity, the sale or exchange of all or substantially all of the assets of the
Company or a reorganization or liquidation of the Company, then in lieu of the
foregoing, the Committee may upon written notice to the Optionholder provide
that this Option shall terminate on a date not less than 20 days after the date
of such notice unless theretofore exercised. In connection with such notice, the
Committee may in its discretion accelerate or waive any deferred exercise
period.

 

8. Option Not Transferable. This Option is not transferable by the Optionholder
otherwise than by will or the laws of descent and distribution, and is
exercisable, during the Optionholder’s lifetime, only by the Optionholder. The
naming of a Designated Beneficiary does not constitute a transfer.

 

9. Termination of Employment or Engagement. If the Optionholder’s status as an
employee or consultant of (a) the Company, (b) an Affiliate, or (c) a
corporation (or parent or subsidiary corporation of such corporation) issuing or
assuming a stock option in a transaction to which section 424(a) of the Code
applies, is terminated for any reason (voluntary or involuntary) and the period
of exercisability for a particular Option following such termination has not
been specified by the

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Board, each such Option then held by that Participant shall expire to the extent
not previously exercised ten (10) calendar days after such Participant’s
employment or engagement is terminated, except that -

 

(a) If the Participant is on military, sick leave or other bona fide leave of
absence (such as temporary employment by the federal government), his or her
employment or engagement with the Company will be treated as continuing intact
if the period of such leave does not exceed ninety (90) days, or, if longer, so
long as the Participant’s right to reemployment or the survival of his or her
service arrangement with the Company is guaranteed either by statute or by
contract; otherwise, the Participant’s employment or engagement will be deemed
to have terminated on the 91st day of such leave.

 

(b) If the Participant’s employment is terminated by reason of his or her
retirement from the Company at normal retirement age, each Option then held by
the Participant, to the extent exercisable at retirement, may be exercised by
the Participant at any time within three (3) months after such retirement unless
terminated earlier by its terms.

 

(c) If the Participant’s employment or engagement is terminated by reason of his
or her death, each Option then held by the Participant, to the extent
exercisable at the date of death, may be exercised at any time within one year
after that date (unless terminated earlier by its terms) by the person(s) to
whom the Participant’s option rights pass by will or by the applicable laws of
descent and distribution.

 

(d) If the Participant’s employment or engagement is terminated by reason of his
or her becoming permanently and totally disabled, each Option then held by the
Participant, to the extent exercisable upon the occurrence of permanent and
total disability, may be exercised by the Participant at any time within one (1)
year after such occurrence unless terminated earlier by its terms. For purposes
hereof, an individual shall be deemed to be “permanently and totally disabled”
if he or she is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. Any determination of
permanent and total disability shall be made in good faith by the Company on the
basis of a report signed by a qualified physician.

 

10. Compliance with Securities Laws. It shall be a condition to the
Optionholder’s right to purchase shares of Common Stock hereunder that the
Company may, in its discretion, require (a) that the shares of Common Stock
reserved for issuance upon the exercise of this Option shall have been duly
listed, upon official notice of issuance, upon any national securities exchange
or automated quotation system on which the Company’s Common Stock may then be
listed or quoted, (b) that either (i) a registration statement under the
Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in
the opinion of counsel for the Company, the proposed purchase shall be exempt
from registration under that Act and the Optionholder shall have made such
undertakings and agreements with the Company as the Company may reasonably
require, and (c) that such other steps, if any, as counsel for the Company shall
consider necessary to comply with any law applicable to the issue of such shares
by the Company shall have been taken by the Company or the Optionholder, or
both. The certificates representing the shares purchased under this Option may
contain such legends as counsel for the Company shall consider necessary to
comply with any applicable law.

 

11. Payment of Taxes. The Optionholder shall pay to the Company, or make
provision satisfactory to the Company for payment of, any taxes required by law
to be withheld with respect to the exercise of this Option. The Committee may,
in its discretion, require any other Federal or state taxes imposed on the sale
of the shares to be paid by the Optionholder. In the Committee’s discretion,
such tax obligations may be paid in whole or in part in shares of Common Stock,
including shares retained from the exercise of this Option, valued at their Fair
Market Value on the date of delivery. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the Optionholder.

 

12. Notice of Sale of Shares Required. The Optionholder agrees to notify the
Company in writing within 30 days of the disposition of any shares purchased
upon exercise of this Option if such disposition occurs within two years of the
date of the grant of this Option or within one year after such purchase.

 

Adopted November 14, 1996

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No.             

               Shares

 

PARAMETRIC TECHNOLOGY CORPORATION

1997 Incentive Stock Option Plan

 

Nonstatutory Stock Option Certificate

 

Parametric Technology Corporation (the “Company”), a Massachusetts corporation,
hereby grants to the person named below an option to purchase shares of Common
Stock, $0.01 par value, of the Company (the “Option”) under and subject to the
Company’s 1997 Incentive Stock Option Plan (the “Plan”) exercisable on the
following terms and conditions set forth below and those attached hereto and in
the Plan:

 

Name of Optionholder:

   _____________________

Address:

   _____________________      _____________________

Social Security No.

   _____________________

Number of Shares:

   _____________

Option Price:

   _____________

Date of Grant:

     ______________     

 

Exercisability Schedule:

   After    , 19     , as to              shares,      after    , 19     , as to
             additional shares,      after    , 19     , as to             
additional shares,      after    , 19     , as to              additional
shares,      after    , 19     , as to              additional shares.

Expiration Date:

             _____________

 

This Option shall not be treated as an Incentive Stock Option under section 422
of the Internal Revenue Code of 1986, as amended (the “Code”).

 

By acceptance of this Option, the Optionholder agrees to the terms and
conditions set forth above and those attached hereto and in the Plan.

 

OPTIONHOLDER

  PARAMETRIC TECHNOLOGY CORPORATION

By:

 

 

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  By:  

 

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PARAMETRIC TECHNOLOGY CORPORATION 1997 INCENTIVE STOCK OPTION PLAN

Nonstatutory Stock Option Terms And Conditions

 

1. Plan Incorporated by Reference. This Option is issued pursuant to the terms
of the Plan and may be amended as provided in the Plan. Capitalized terms used
and not otherwise defined in this certificate have the meanings given to them in
the Plan. This certificate does not set forth all of the terms and conditions of
the Plan, which are incorporated herein by reference. The Committee administers
the Plan and its determinations regarding the operation of the Plan are final
and binding. Copies of the Plan may be obtained upon written request without
charge from the Corporate Counsel of the Company.

 

2. Option Price. The price to be paid for each share of Common Stock issued upon
exercise of the whole or any part of this Option is the Option Price set forth
on the face of this certificate.

 

3. Exercisability Schedule. This Option may be exercised at any time and from
time to time for the number of shares and in accordance with the exercisability
schedule set forth on the face of this certificate, but only for the purchase of
whole shares. This Option may not be exercised as to any shares after the
Expiration Date.

 

4. Method of Exercise. To exercise this Option, the Optionholder shall deliver
written notice of exercise to the Company specifying the number of shares with
respect to which the Option is being exercised accompanied by payment of the
Option Price for such shares in cash, by certified check or in such other form,
including shares of Common Stock of the Company valued at their Fair Market
Value on the date of delivery or a payment commitment of a financial or
brokerage institution, as the Committee may approve. Promptly following such
notice, the Company will deliver to the Optionholder a certificate representing
the number of shares with respect to which the Option is being exercised.

 

5. No Right To Employment. No person shall have any claim or right to be granted
an Option. Each employee of the Company or any of its Affiliates is an
employee-at-will (that is to say that either the Participant or the Company or
any Affiliate may terminate the employment relationship at any time for any
reason or no reason at all) unless, and only to the extent, provided in a
written employment agreement for a specified term executed by the chief
executive officer of the Company or his duly authorized designee or the
authorized signatory of any Affiliate. Neither the adoption, maintenance, nor
operation of the Plan nor any Option hereunder shall confer upon any employee of
the Company or of any Affiliate any right with respect to the continuance of
his/her employment by the Company or any such Affiliate nor shall they interfere
with the right of the Company (or Affiliate) to terminate any employee at any
time or otherwise change the terms of employment, including, without limitation,
the right to promote, demote or otherwise re-assign any employee from one
position to another within the Company or any Affiliate.

 

6. Effect of Grant. Participant shall not earn any Options granted hereunder
until such time as all the conditions put forth herein and in the Plan which are
required to be met in order to exercise the Option have been fully satisfied.

 

7. Recapitalization, Mergers, Etc. As provided in the Plan, in the event of
corporate transactions affecting the Company’s outstanding Common Stock, the
number and kind of shares subject to this Option and the exercise price
hereunder shall be equitably adjusted. If such transaction involves a
consolidation or merger of the Company with another entity, the sale or exchange
of all or substantially all of the assets of the Company or a reorganization or
liquidation of the Company, then in lieu of the foregoing, the Committee may
upon written notice to the Optionholder provide that this Option shall terminate
on a date not less than 20 days after the date of such notice unless theretofore
exercised. In connection with such notice, the Committee may in its discretion
accelerate or waive any deferred exercise period.

 

8. Option Not Transferable. This Option is not transferable by the Optionholder
otherwise than by will or the laws of descent and distribution, and is
exercisable, during the Optionholder’s lifetime, only by the Optionholder. The
naming of a Designated Beneficiary does not constitute a transfer.

 

9. Termination of Employment or Engagement. If the Optionholder’s status as an
employee or consultant of (a) the Company, (b) an Affiliate, or (c) a
corporation (or parent or subsidiary corporation of such corporation) issuing or
assuming a stock option in a transaction to which section 424(a) of the Code
applies, is terminated for any reason (voluntary or involuntary) and the period
of exercisability for a particular Option following such termination has not
been specified by the

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Board, each such Option then held by that Participant shall expire to the extent
not previously exercised ten (10) calendar days after such Participant’s
employment or engagement is terminated, except that -

 

(a) If the Participant is on military, sick leave or other bona fide leave of
absence (such as temporary employment by the federal government), his or her
employment or engagement with the Company will be treated as continuing intact
if the period of such leave does not exceed ninety (90) days, or, if longer, so
long as the Participant’s right to reemployment or the survival of his or her
service arrangement with the Company is guaranteed either by statute or by
contract; otherwise, the Participant’s employment or engagement will be deemed
to have terminated on the 91st day of such leave.

 

(b) If the Participant’s employment is terminated by reason of his or her
retirement from the Company at normal retirement age, each Option then held by
the Participant, to the extent exercisable at retirement, may be exercised by
the Participant at any time within three (3) months after such retirement unless
terminated earlier by its terms.

 

(c) If the Participant’s employment or engagement is terminated by reason of his
or her death, each Option then held by the Participant, to the extent
exercisable at the date of death, may be exercised at any time within one year
after that date (unless terminated earlier by its terms) by the person(s) to
whom the Participant’s option rights pass by will or by the applicable laws of
descent and distribution.

 

(d) If the Participant’s employment or engagement is terminated by reason of his
or her becoming permanently and totally disabled, each Option then held by the
Participant, to the extent exercisable upon the occurrence of permanent and
total disability, may be exercised by the Participant at any time within one (1)
year after such occurrence unless terminated earlier by its terms. For purposes
hereof, an individual shall be deemed to be “permanently and totally disabled”
if he or she is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. Any determination of
permanent and total disability shall be made in good faith by the Company on the
basis of a report signed by a qualified physician.

 

10. Compliance with Securities Laws. It shall be a condition to the
Optionholder’s right to purchase shares of Common Stock hereunder that the
Company may, in its discretion, require (a) that the shares of Common Stock
reserved for issuance upon the exercise of this Option shall have been duly
listed, upon official notice of issuance, upon any national securities exchange
or automated quotation system on which the Company’s Common Stock may then be
listed or quoted, (b) that either (i) a registration statement under the
Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in
the opinion of counsel for the Company, the proposed purchase shall be exempt
from registration under that Act and the Optionholder shall have made such
undertakings and agreements with the Company as the Company may reasonably
require, and (c) that such other steps, if any, as counsel for the Company shall
consider necessary to comply with any law applicable to the issue of such shares
by the Company shall have been taken by the Company or the Optionholder, or
both. The certificates representing the shares purchased under this Option may
contain such legends as counsel for the Company shall consider necessary to
comply with any applicable law.

 

11. Payment of Taxes. The Optionholder shall pay to the Company, or make
provision satisfactory to the Company for payment of, any taxes required by law
to be withheld with respect to the exercise of this Option. The Committee may,
in its discretion, require any other Federal or state taxes imposed on the sale
of the shares to be paid by the Optionholder. In the Committee’s discretion,
such tax obligations may be paid in whole or in part in shares of Common Stock,
including shares retained from the exercise of this Option, valued at their Fair
Market Value on the date of delivery. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the Optionholder.

 

Adopted November 14, 1996