Exhibit 10.34

 

TERADYNE, INC. 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

 

(as amended and restated as of November 12, 2003)

 

1. Purpose. This Non-Qualified Stock Option Plan, to be known as the 1996
Non-Employee Director Stock Option Plan (hereinafter, this “Plan”) is intended
to promote the interests of Teradyne, Inc. (hereinafter, the “Company”) by
providing an inducement to obtain and retain the services of qualified persons
who are not employees or officers of the Company to serve as members of its
Board of Directors (the “Board”).

 

2. Available Shares. The total number of shares of Common Stock, par value $.125
per share, of the Company (the “Common Stock”) for which options may be granted
under this Plan shall not exceed 1,600,000 shares, subject to adjustment in
accordance with paragraph 10 of this Plan. Shares subject to this Plan are
authorized but unissued shares or shares that were once issued and subsequently
reacquired by the Company. If any options granted under this Plan are
surrendered before exercise or lapse without exercise, in whole or in part, the
shares reserved therefor shall continue to be available under this Plan.

 

3. Administration. This Plan shall be administered by the Board or by a
committee appointed by the Board (the “Committee”). In the event the Board fails
to appoint or refrains from appointing a Committee, the Board shall have all
power and authority to administer this Plan. In such event, the word “Committee”
wherever used herein shall be deemed to mean the Board. The Committee shall,
subject to the provisions of the Plan, have the power to construe this Plan, to
determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of this Plan as it may deem desirable. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any option granted
under it.

 

4. Automatic Grant of Options. Subject to the availability of shares under this
Plan, (a) each person who becomes a member of the Board on or after August 26,
1999 and through December 31, 2003, who is not an employee or officer of the
Company (each, a “Non-Employee Director”) shall be automatically granted on the
date such person is first elected to the Board, without further action by the
Board, an option to purchase 22,500 shares of the Common Stock, (b) each person
who becomes a Non-Employee Director on or after January 1, 2004, shall be
automatically granted on the date such person is first elected to the Board,
without further action by the Board, an option to purchase 25,000 shares of the
Common Stock, (c) each person who was a Non-Employee Director on February 7,
2000 shall be granted on February 5, 2001 an option to purchase 6,750 shares of
the Common Stock, (d) each Non-Employee Director who became a new member of the
Board during February 2000 shall be granted on February 5, 2001 an option to
purchase 15,750 shares of the Common Stock, (e) beginning on February 5, 2001
and through December 31, 2003, each person who is a Non-Employee Director on the
first Monday in February in each year shall be automatically granted on each
such date an option to purchase 11,250 shares of the Common Stock, and (f)
beginning on January 1, 2004 and

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throughout the term of this Plan, each person who is a Non-Employee Director on
the first Monday in February in each year shall be automatically granted on each
such date an option to purchase 15,000 shares of the Common Stock . The options
to be granted under this paragraph 4 shall be the only options ever to be
granted at any time to each such member under this Plan. The number of shares
covered by options granted under this paragraph 4 shall be subject to adjustment
in accordance with the provisions of paragraph 10 of this Plan.

 

5. Option Price. The purchase price of the stock covered by an option granted
pursuant to this Plan shall be 100% of the fair market value of such shares on
the day the option is granted. The option price will be subject to adjustment in
accordance with the provisions of paragraph 10 of this Plan. For purposes of
this Plan, if, at the time an option is granted under the Plan, the Company’s
Common Stock is publicly traded, “fair market value” shall be determined as of
the last business day for which the prices or quotes discussed in this sentence
are available prior to the date such option is granted and shall mean (i) the
average (on that date) of the high and low prices of the Common Stock on the
principal national securities exchange on which the Common Stock is traded, if
the Common Stock is then traded on a national securities exchange; or (ii) the
last reported sale price (on that date) of the Common Stock on the Nasdaq
National Market, if the Common Stock is not then traded on a national securities
exchange; or (iii) the closing bid price (or average of bid prices) last quoted
(on that date) by an established quotation service for over-the-counter
securities, if the Common Stock is not reported on the Nasdaq National Market
List.

 

6. Period of Option. Unless sooner terminated in accordance with the provisions
of paragraph 8 of this Plan, an option granted hereunder shall expire on the
date which is seven (7) years after the date of grant of the option.

 

7. (a) Vesting of Shares and Non-Transferability of Options. Options granted
under this Plan shall not be exercisable until they become vested. Options
granted under this Plan prior to February 5, 2001 shall vest in the optionee and
thus become exercisable, in accordance with the following schedule, provided
that the optionee has continuously served as a member of the Board through such
vesting date:

 

Percentage of Option

Shares for which

Option Will be Exercisable

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Date of Vesting

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0%

   Less than one year from the date of grant

25%

   One year from the date of grant

50%

   Two years from the date of grant

75%

   Three years from the date of grant

100%

   Four years from the date of grant

 

Options granted on or after February 5, 2001 shall not be subject to vesting and
shall be immediately exercisable in their entirety on the date of grant.

 

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The number of shares as to which options may be exercised shall be cumulative,
so that once the option shall become exercisable as to any shares it shall
continue to be exercisable as to said shares, until expiration or termination of
the option as provided in this Plan.

 

(b) Non-transferability. Any option granted pursuant to this Plan shall not be
assignable or transferable other than by will or the laws of descent and
distribution or pursuant to a domestic relations order and shall be exercisable
during the optionee’s lifetime only by him or her.

 

8. Termination of Option Rights.

 

(a) If an optionee ceases to be a director of the Company other than by reason
of death, no further installments of his options will become exercisable, and
his options shall terminate after the passage of three months from the date of
termination of his directorship (but not later than on their specified
expiration dates). Notwithstanding the foregoing, in the event a director of the
Company (A) resigns from the Board of Directors to enter government service or
(B) retires from the Board of Directors (i) at any time on or after age 55 but
prior to age 65 provided that such director has been a director of the Company
continuously for at least ten years or (ii) at any time on or after age 65
provided that such director has been a director of the Company continuously for
at least five years, such director may exercise any option then held by him or
her, within the original term of the option, as to all or any of the shares
covered thereby, at the time or times such exercise is permitted under the terms
of the option. Notwithstanding the foregoing, if a director retires from the
Company at any time and becomes a director of a competitor of the Company, such
director’s options shall terminate after the passage of three months from the
date that such director becomes a director of a competitor. Nothing in the Plan
shall be deemed to give any optionee the right to be nominated as a director by
the Company for any period of time.

 

(b) If an optionee dies, any option of his may be exercised, to the extent of
the number of shares with respect to which he could have exercised it on the
date of his death, by his estate, personal representative or beneficiary who
acquires the option by will or by the laws of descent and distribution, at any
time prior to the earlier of the option’s specified expiration date or six
months from the date of the optionee’s death. The option shall terminate on the
earlier of such dates.

 

9. Exercise of Option. Subject to the terms and conditions of this Plan and the
option agreements, an option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to the
Company by mail or in person, at its principal executive offices, stating the
number of shares with respect to which the option is being exercised,
accompanied by payment in full for such shares. Payment may be (a) in United
States dollars in cash or by check, (b) in whole or in part in shares of the
Common Stock of the Company already owned by the person or persons exercising
the option or shares subject to the option being exercised (subject to such
restrictions and guidelines as the Board may adopt from time to time), valued at
fair market value determined in accordance with the provisions of paragraph 5 or
(c) consistent with applicable law, through the delivery of an assignment to the

 

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Company of a sufficient amount of the proceeds from the sale of the Common Stock
acquired upon exercise of the option and an authorization to the broker or
selling agent to pay that amount to the Company, which sale shall be at the
participant’s direction at the time of exercise. There shall be no such exercise
at any one time as to fewer than one hundred (100) shares or all of the
remaining shares then purchasable by the person or persons exercising the
option, if fewer than one hundred (100) shares. The Company’s transfer agent
shall, on behalf of the Company, prepare a certificate or certificates
representing such shares acquired pursuant to exercise of the option, shall
register the optionee as the owner of such shares on the books of the Company
and shall cause the fully executed certificate(s) representing such shares to be
delivered to the optionee as soon as practicable after payment of the option
price in full. The holder of an option shall not have any rights of a
stockholder with respect to the shares covered by the option, except to the
extent that one or more certificates for such shares shall be delivered to him
or her upon the due exercise of the option.

 

10. Adjustments Upon Changes in Capitalization and Other Events. Upon the
occurrence of any of the following events, an optionee’s rights with respect to
options granted to him or her hereunder shall be adjusted as hereinafter
provided:

 

(a) Stock Dividends and Stock Splits. If the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.

 

(b) Recapitalization Adjustments. In the event of a reorganization,
recapitalization, merger, consolidation, or any other change in the corporate
structure or shares of the Company, to the extent permitted by Rule 16b-3 under
the Securities Exchange Act of 1934, adjustments in the number and kind of
shares authorized by this Plan and in the number and kind of shares covered by,
and in the option price of outstanding options under this Plan shall be made if,
and in the same manner as, such adjustments are made to options issued under the
Company’s other stock option plans. Notwithstanding the foregoing, no such
adjustment shall be made which would, within the meaning of any applicable
provisions of the Internal Revenue Code of 1986, as amended, constitute a
modification, extension or renewal of any Option or a grant of additional
benefits to the holder of an Option.

 

(c) Issuances of Securities. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares subject to options.
No adjustments shall be made for dividends paid in cash or in property other
than securities of the Company.

 

(d) Adjustments. Upon the happening of any of the foregoing events, the class
and aggregate number of shares set forth in paragraphs 2 and 4 of this Plan that
are subject to options which previously have been or subsequently may be granted
under this Plan shall also be appropriately adjusted to reflect such events. The
Board shall determine the specific adjustments to be made under this paragraph
10 and its determination shall be conclusive.

 

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11. Restrictions on Issuance of Shares. Notwithstanding the provisions of
paragraphs 4 and 9 of this Plan, the Company shall have no obligation to deliver
any certificate or certificates upon exercise of an option until one of the
following conditions shall be satisfied:

 

(i) The issuance of shares with respect to which the option has been exercised
is at the time of the issue of such shares effectively registered under
applicable Federal and state securities laws as now in force or hereafter
amended; or

 

(ii) Counsel for the Company shall have given an opinion that the issuance of
such shares is exempt from registration under Federal and state securities laws
as now in force or hereafter amended; and the Company has complied with all
applicable laws and regulations with respect thereto, including without
limitation all regulations required by any stock exchange upon which the
Company’s outstanding Common Stock is then listed.

 

12. Legend on Certificates. The certificates representing shares issued pursuant
to the exercise of an option granted hereunder shall carry such appropriate
legend, and such written instructions shall be given to the Company’s transfer
agent, as may be deemed necessary or advisable by counsel to the Company in
order to comply with the requirements of the Securities Act of 1933 or any state
securities laws.

 

13. Representation of Optionee. If requested by the Company, the optionee shall
deliver to the Company written representations and warranties upon exercise of
the option that are necessary to show compliance with Federal and state
securities laws, including representations and warranties to the effect that a
purchase of shares under the option is made for investment and not with a view
to their distribution (as that term is used in the Securities Act of 1933).

 

14. Option Agreement. Each option granted under the provisions of this Plan
shall be evidenced by an option agreement, which agreement shall be duly
executed and delivered on behalf of the Company and by the optionee to whom such
option is granted. The option agreement shall contain such terms, provisions and
conditions not inconsistent with this Plan as may be determined by the officer
executing it.

 

15. Termination and Amendment of Plan. Options may no longer be granted under
this Plan after November 13, 2006, and this Plan shall terminate when all
options granted or to be granted hereunder are no longer outstanding. The Board
may at any time terminate this Plan or make such modification or amendment
thereof as it deems advisable; provided, however, that the Board may not modify
or amend this Plan, without approval of the stockholders, if such approval is
required by the Federal securities laws or applicable regulatory authorities (at
the time of any such modification or amendment). Termination or any modification
or amendment of this Plan shall not, without consent of a participant, affect
his or her rights under an option previously granted to him or her.

 

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16. Withholding of Income Taxes. Upon the exercise of an option, the Company, in
accordance with Section 3402(a) of the Internal Revenue Code, may require the
optionee to pay withholding taxes in respect of amounts considered to be
compensation includible in the optionee’s gross income.

 

17. Compliance with Regulations. It is the Company’s intent that the Plan comply
in all respects with Rule 16b-3 under the Securities Exchange Act of 1934 (or
any successor or amended provision thereof) and any applicable Securities and
Exchange Commission interpretations thereof. If any provision of this Plan is
deemed not to be in compliance with Rule 16b-3, the provision shall be null and
void.

 

18. Governing Law. The validity and construction of this Plan and the
instruments evidencing options shall be governed by the laws of the Commonwealth
of Massachusetts, without giving effect to the principles of conflicts of law
thereof.

 

Register of Approvals and Amendments:

 

Date Approved by Board of Directors of the Company: November 13, 1996

 

Date Approved by the Shareholders of the Company: April 15, 1997

 

Amended on December 14, 1998 to revise Section 4.

 

Amended August 1999 to revise Section 4 as previously set forth herein.

 

Amended August 1999 to adjust aggregate number of shares issuable under Plan as
currently set forth herein to reflect 2:1 stock split.

 

Amended January 2001 to revise Sections 4 and 7(a) as currently set forth
herein.

 

Amended January 2002 to revise Section 6 as currently set forth herein.

 

Amended November 12, 2003 to revise Section 4 as currently set forth herein.

 

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