Exhibit 10.17

 

LTX Corporation

 

Incentive Stock Option Agreement

Granted Under 2004 Stock Plan

 

1. Grant of Option.

 

This agreement evidences the grant by LTX Corporation, a Massachusetts
corporation (the “Company”), on                     , 200_ (the “Grant Date”) to
                    , an employee of the Company (the “Participant”), of an
option to purchase, in whole or in part, on the terms provided herein and in the
Company’s 2004 Stock Plan (the “Plan”), a total of                      shares
(the “Shares”) of common stock,              par value per share, of the Company
(“Common Stock”) at $.05 per Share. Unless earlier terminated, this option shall
expire at 5:00 p.m., Eastern time, on                          (the “Final
Exercise Date”).

 

It is intended that the option evidenced by this agreement shall be an incentive
stock option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”). Except as
otherwise indicated by the context, the term “Participant”, as used in this
option, shall be deemed to include any person who acquires the right to exercise
this option validly under its terms.

 

2. Vesting Schedule.

 

This option will become exercisable (“vest”) as follows:

 

Date

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   Percentage

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                    , 200  

   25 %    

                    , 200  

   25 %    

                    , 200  

   25 %    

                    , 200  

   25 %    

 

The right of exercise shall be cumulative so that to the extent the option is
not exercised in any period to the maximum extent permissible it shall continue
to be exercisable, in whole or in part, with respect to all Shares for which it
is vested until the earlier of the Final Exercise Date or the termination of
this option under Section 3 hereof or the Plan.

 

3. Exercise of Option.

 

(a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office,
accompanied by this agreement, and payment in full in the manner provided in the
Plan. The Participant may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share.

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(b) Continuous Relationship with the Company Required. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been at
all times since the Grant Date, an employee or officer of, or consultant or
advisor to, the Company or any other entity the employees, officers, directors,
consultants, or advisors of which are eligible to receive option grants under
the Plan (an “Eligible Participant”).

 

(c) Termination of Relationship with the Company. If the Participant ceases to
be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), provided that this option shall be exercisable only to the extent that
the Participant was entitled to exercise this option on the date of such
cessation.

 

(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final
Exercise Date while he or she is an Eligible, this option shall become
immediately vested and exercisable by the Participant (or in the case of death
by an authorized transferee) and the right to exercise this option shall
terminate two years following the date of death or disability of the
Participant.

 

(e) Change of Control. If, on or prior to the first anniversary of the date of
the consummation of a Change of Control, the Participant’s employment with the
Company or the acquiring or succeeding corporation is terminated for Good Reason
by the Participant or is terminated without Cause by the Company or the
acquiring or succeeding corporation, then any options that have prior to the
date of such termination become exercisable, may be exercised at any time within
three years after the date of termination, or, if earlier, the last date of the
option period.

 

For purposes of this Agreement, “Good Reason” and “Cause” shall have the
following definitions:

 

“Good Reason” shall mean any significant diminution in the Participant’s title,
authority, status, reporting requirements, or responsibilities from and after
such Change in Control, or any reduction in the annual base salary payable to
the Participant from and after such Change in Control, or the failure to
continue any material compensation or bonus plan or program, or the relocation
of the place of business at which the Participant is principally located to a
location that is greater than 50 miles from its location immediately prior to
such Change in Control.

 

“Cause” shall mean any (i) willful failure by the Participant, which failure is
not cured within 30 days of written notice to the Participant from the Company,
to perform his or her material responsibilities to the Company (other than any
such failure resulting from incapacity due to physical or mental illness or any
failure after the Participant gives notice of termination for Good Reason) or
(ii) willful misconduct by the Participant which affects the business reputation
of the Company. For purposes of the preceding sentence, no act or failure to act
by the Participant shall be considered “willful” unless it is done, or omitted
to be done, in bad faith and without reasonable belief that the Participant’s
action or omission was in the best interests of the Company.

 

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4. Tax Matters.

 

(a) Withholding. No Shares will be issued pursuant to the exercise of this
option unless and until the Participant pays to the Company, or makes provision
satisfactory to the Company for payment of, any federal, state or local
withholding taxes required by law to be withheld in respect of this option.

 

(b) Disqualifying Disposition. If the Participant disposes of Shares acquired
upon exercise of this option within two years from the Grant Date or one year
after such Shares were acquired pursuant to exercise of this option, the
Participant shall notify the Company in writing of such disposition.

 

5. Nontransferability of Option.

 

This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.

 

6. Provisions of the Plan.

 

This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.

 

IN WITNESS WHEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer. This option shall take effect as
a sealed instrument.

 

    LTX Corporation Dated:                    By:  

 

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    Name:  

 

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    Title:  

 

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PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof. The undersigned hereby acknowledges receipt of a copy of the
Company’s 2004 Stock Plan.

 

PARTICIPANT:

 

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Address:  

 

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