1996 EMPLOYEE STOCK PURCHASE PLAN



 Exhibit 10.6 
  
 TERADYNE, INC. 
  
 1996 EMPLOYEE STOCK PURCHASE PLAN 
  
 (as amended as of May 27, 2004) 
  
 Article 1 - Purpose. 
  
 This 1996 Employee Stock Purchase Plan (the “Plan”) is intended to encourage stock ownership by all eligible employees of Teradyne, Inc. (the
“Company”), a Massachusetts corporation, and its participating subsidiaries (as defined in Article 17) so that they may share in the growth of the Company by acquiring or increasing their proprietary interest in the Company. The Plan is
designed to encourage eligible employees to remain in the employ of the Company and its participating subsidiaries. The Plan is intended to constitute an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal
Revenue Code of 1986, as amended (the “Code”). 
  
 Article 2 -
Administration of the Plan. 
  
 The Plan may be administered by a
committee appointed by the Board of Directors of the Company (the “Committee”). The Committee shall consist of not less than two members of the Company’s Board of Directors. The Board of Directors may from time to time remove members
from, or add members to, the Committee. Vacancies on the Committee, howsoever caused, shall be filled by the Board of Directors. The Committee may select one of its members as Chairman, and shall hold meetings at such times and places as it may
determine. Acts by a majority of the Committee, or acts reduced to or approved in writing by a majority of the members of the Committee, shall be the valid acts of the Committee. 
  
 The interpretation and construction by the Committee of any provisions of the Plan or of any option granted under it shall be final, unless
otherwise determined by the Board of Directors. The Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best, provided that any such rules and regulations shall be applied on a uniform basis to
all employees under the Plan. No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it. 
  
 In the event the Board of Directors fails to appoint or refrains from appointing a Committee,
the Board of Directors shall have all power and authority to administer the Plan. In such event, the word “Committee” wherever used herein shall be deemed to mean the Board of Directors. 
  
 Article 3 - Eligible Employees. 
  
 No option may be granted to any person serving as a member of the Committee at the time of
grant. Subject to the foregoing limitation, all employees of the Company or any of its participating subsidiaries on United States payroll who are employees of the 







 Company or any of its participating subsidiaries (i) on or before the first day of any Payment Period (as defined in
Article 5) or (ii) for employees first employed after the first day of a particular Payment Period, on or before the first day of the next succeeding July in any such Payment Period, and whose customary employment is not less than twenty hours per
week and more than five months in any calendar year shall be eligible to receive options under the Plan to purchase common stock of the Company, par value $.125 per share (“Common Stock”). An employee eligible under this Plan solely by
virtue of clause (ii) of the preceding sentence shall be referred to herein as a “July Employee.” All eligible employees shall have the same rights and privileges hereunder. Persons who elect to enter the Plan in accordance with Article 7
and who are eligible employees on the first business day of any Payment Period (as defined in Article 5) (or on the first business day of July with respect to July Employees) shall receive their options as of such day. Persons who elect to enter the
Plan in accordance with Article 7 and who become eligible employees after any date on which options are granted under the Plan shall be granted options on the first business day of the next succeeding Payment Period or the first business day of July
(whichever is applicable) on which options are granted to eligible employees under the Plan. In no event, however, may an employee be granted an option if such employee, immediately after the option was granted, would be treated as owning stock
possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or of any parent corporation or subsidiary corporation, as the terms “parent corporation” and “subsidiary
corporation” are defined in Section 424(e) and (f) of the Code. For purposes of determining stock ownership under this paragraph, the rules of Section 424(d) of the Code shall apply, and stock which the employee may purchase under outstanding
options shall be treated as stock owned by the employee. 
  
 Article 4 -
Stock Subject to the Plan. 
  
 The stock subject to the options under the
Plan shall be authorized but unissued Common Stock, or shares of Common Stock reacquired by the Company, including shares purchased in the open market. The aggregate number of shares which may be issued pursuant to the Plan is 15,400,000, subject to
adjustment as provided in Article 12. If any option granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, the unpurchased shares
subject thereto shall again be available under the Plan. 
  
 Article 5 -
Payment Period and Stock Options. 
  
 For the duration of the Plan, the
Payment Period shall be defined as the twelve-month period commencing on the first day of January and ending annually on the last day of December of each calendar year. Notwithstanding the foregoing, the first Payment Period during which payroll
deductions will be accumulated under the Plan shall commence on July 1, 1996 and shall end on December 31, 1996. 
  
 On the first business day of each Payment Period (or on the first business day of July of such Payment Period in the case of a July Employee), the Company will grant to
each eligible employee who is then a participant in the Plan an option to purchase on the last day of such Payment Period, at the Option Price hereinafter provided for, a maximum of 
  

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 6,000 shares, on condition that such employee remains eligible to participate in the Plan throughout the remainder of
such Payment Period. The participant shall be entitled to exercise the option so granted only to the extent of the participant’s accumulated payroll deductions on the last day of such Payment Period. If the participant’s accumulated
payroll deductions on the last day of the Payment Period would enable the participant to purchase more than 6,000 shares except for the 6,000 share limitation, the excess of the amount of the accumulated payroll deductions over the aggregate
purchase price of the 6,000 shares shall be promptly refunded to the participant by the Company, without interest. The Option Price per share for each Payment Period shall be the lesser of (i) 85% of the fair market value of the Common Stock on the
first business day of the Payment Period (or, in the case of a July Employee, on the first business day of July of such Payment Period) and (ii) 85% of the fair market value of the Common Stock on the last business day of the Payment Period, in
either event rounded up to the nearest cent. The foregoing limitation on the number of shares subject to option and the Option Price shall be subject to adjustment as provided in Article 12. 
  
 For purposes of the Plan, the term “fair market value” on any date means (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 Stock Market, if the Common Stock is not then traded on a national securities exchange; or (iii) the average of the closing bid and asked 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 Stock Market; or (iv) if the Common Stock is not publicly traded, the fair market value of the Common Stock as determined by the Committee after
taking into consideration all factors which it deems appropriate, including, without limitation, recent sale and offer prices of the Common Stock in private transactions negotiated at arm’s length. 
  
 For purposes of the Plan, the term “business day” means a day on which there is
trading on The Nasdaq Stock Market or the aforementioned national securities exchange, whichever is applicable pursuant to the preceding paragraph; and if neither is applicable, a day that is not a Saturday, Sunday or legal holiday in Massachusetts.

  
 Notwithstanding any other provision herein, no employee shall be granted an
option which permits the employee’s right to purchase stock under the Plan, and under all other Section 423(b) employee stock purchase plans of the Company and any parent or subsidiary corporations, to accrue at a rate which exceeds $25,000 of
fair market value of such stock (determined on the date or dates that options on such stock were granted) for each calendar year in which such option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply
with Section 423(b)(8) of the Code. If the participant’s accumulated payroll deductions on the last day of the Payment Period would otherwise enable the participant to purchase Common Stock in excess of the Section 423(b)(8) $25,000 limitation
described in this paragraph, the excess of the amount of the accumulated payroll deductions over the aggregate purchase price of the shares actually purchased shall be promptly refunded to the participant by the Company, without interest.

  

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 Article 6 - Exercise of Option. 
  
 Each eligible employee who continues to be a participant in the Plan on the last day of a Payment Period shall be deemed to have exercised
his or her option on such date and shall be deemed to have purchased from the Company such number of full shares of Common Stock reserved for the purpose of the Plan as the participant’s accumulated payroll deductions on such date will pay for
at the Option Price, subject to the 6,000 share limit of the option and the Section 423(b)(8) $25,000 limitation described in Article 5. If the individual is not a participant on the last day of a Payment Period, then he or she shall not be entitled
to exercise his or her option. Only full shares of Common Stock may be purchased under the Plan. Unused payroll deductions remaining in a participant’s account at the end of a Payment Period solely by reason of the inability to purchase a
fractional share (and for no other reason) shall be refunded. 
  
 Article 7
- Authorization for Entering the Plan. 
  
 An employee may elect to enter
the Plan by filling out, signing and delivering to the Company an authorization: 
  
 A. Stating the percentage to be deducted from the employee’s pay; 
  
 B. Authorizing the purchase of stock for the employee in each Payment Period in accordance with the terms of the Plan; and 
  
 C. Specifying the exact name or names in which stock purchased for the employee is to be issued as provided under Article 11 hereof. 
  
 Such authorization must be received by the Company on or before the first day of the next
succeeding Payment Period or on or prior to the first day of July of such Payment Period in the case of a July Employee. 
  
 Unless a participant files a new authorization or withdraws from the Plan, the deductions and purchases under the authorization the participant has on file under the Plan
will continue from one Payment Period to succeeding Payment Periods as long as the Plan remains in effect. 
  
 The Company will accumulate and hold for each participant’s account the amounts deducted from his or her pay. No interest will be paid on these amounts. 
  
 Article 8 - Maximum Amount of Payroll Deductions. 
  
 An employee may authorize payroll deductions in an amount (expressed as a whole percentage)
not less than two percent (2%) but not more than ten percent (10%) of the employee’s cash compensation. 
  
 Article 9 - Change in Payroll Deductions. 
  
 Deductions may not be increased during a Payment Period. Deductions may be decreased during a Payment Period, provided that an employee may not decrease his deduction more often than twice during any Payment Period
(and with respect to July Employees once during any Payment Period). 
  

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 Article 10 - Withdrawal from the Plan. 
  
 A participant may withdraw from the Plan (in whole but not in part) at any time prior to the last day of a Payment Period by delivering a
withdrawal notice to the Company. 
  
 To re-enter the Plan, an employee who has
previously withdrawn must file a new authorization on or before the first day of the next Payment Period in which he or she wishes to participate. The employee’s re-entry into the Plan becomes effective at the beginning of such Payment Period,
provided that he or she is an eligible employee on the first business day of the Payment Period. 
  
 Article 11 - Issuance of Stock. 
  
 Certificates for stock issued to participants shall be delivered as soon as practicable after each Payment Period by the Company’s transfer agent. 
  

Stock purchased under the Plan shall be issued only in the name of the participant, or if the participant’s authorization so specifies, in the name of the
participant and another person of legal age as joint tenants with rights of survivorship. 
  
 Article 12 - Adjustments. 
  
 Upon
the happening of any of the following described events, a participant’s rights under options granted under the Plan shall be adjusted as hereinafter provided: 
  
 A. In the event that the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if, upon a
reorganization, split-up, liquidation, recapitalization or the like of the Company, the shares of Common Stock shall be exchanged for other securities of the Company, each participant shall be entitled, subject to the conditions herein stated, to
purchase such number of shares of Common Stock or amount of other securities of the Company as were exchangeable for the number of shares of Common Stock that such participant would have been entitled to purchase except for such action, and
appropriate adjustments shall be made in the purchase price per share to reflect such subdivision, combination or exchange; and 
  
 B. In the event the Company shall issue any of its shares as a stock dividend upon or with respect to the shares of stock of the class which shall at the time be subject
to options hereunder, each participant upon exercising such an option shall be entitled to receive (for the purchase price paid upon such exercise) the shares as to which the participant is exercising his or her option and, in addition thereto (at
no additional cost), such number of shares of the class or classes in which such stock dividend or dividends were declared or paid, and such amount of cash in lieu of fractional shares, as is equal to the number of shares thereof and the amount of
cash in lieu of fractional shares, respectively, which the participant would have received if the participant had been the holder of the shares as to which the participant is exercising his or her option at all times between the date of the granting
of such option and the date of its exercise. 
  
 Upon the happening of any of the
foregoing events, the class and aggregate number of shares set forth in Article 4 hereof which are subject to options which have been or may be granted under the Plan and the limitations set forth in the second paragraph of Article 5 
  

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 shall also be appropriately adjusted to reflect the events specified in paragraphs A and B above. Notwithstanding the
foregoing, any adjustments made pursuant to paragraphs A or B shall be made only after the Committee, based on advice of counsel for the Company, determines whether such adjustments would constitute a “modification” (as that term is
defined in Section 424 of the Code). If the Committee determines that such adjustments would constitute a modification, it may refrain from making such adjustments. 
  
 If the Company is to be consolidated with or acquired by another entity in a merger, a sale of all or substantially all of the
Company’s assets or otherwise (an “Acquisition”), the Committee or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”) shall, with respect to options then
outstanding under the Plan, either (i) make appropriate provision for the continuation of such options by arranging for the substitution on an equitable basis for the shares then subject to such options either (a) the consideration payable with
respect to the outstanding shares of the Common Stock in connection with the Acquisition, (b) shares of stock of the successor corporation, or a parent or subsidiary of such corporation, or (c) such other securities as the Successor Board deems
appropriate, the fair market value of which shall not exceed the fair market value of the shares of Common Stock subject to such options immediately preceding the Acquisition; or (ii) terminate each participant’s options in exchange for a cash
payment equal to the excess of the fair market value on the date of the Acquisition of the number of shares of Common Stock that the participant’s accumulated payroll deductions as of the date of the Acquisition could purchase, at an option
price determined with reference only to the first business day of the applicable Payment Period (or the first business day of July of such Payment Period in the case of a July Employee) and subject to the 6,000 share limit, Code Section 423(b)(8)
and fractional-share limitations on the amount of stock a participant would be entitled to purchase over the aggregate option price to such participant thereof. 
  

The Committee or Successor Board shall determine the adjustments to be made under this Article 12, and its determination shall be conclusive. 
  
 Article 13 - No Transfer or Assignment of Employee’s Rights. 

 
 An option granted under the Plan may not be transferred or assigned, otherwise than by
will or by the laws of descent and distribution. Any option granted under the Plan may be exercised, during the participant’s lifetime, only by the participant. 
  
 Article 14 - Termination of Employee’s Rights. 
  
 Whenever a participant ceases to be an eligible employee because of retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan shall immediately terminate, and the Company shall promptly refund, without interest, the entire balance of his or her payroll deduction account under the Plan;
provided, however, that if an employee is laid off during the last three months of any Payment Period, he shall nevertheless be deemed to be a participant in the Plan on the last day of the Payment Period. Notwithstanding the foregoing,
eligible employment shall be treated as continuing intact while a participant is on military leave, sick leave or other bona fide leave of absence, for up to 90 days, or, if such leave is 
  

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 longer than 90 days, for so long as the participant’s right to re-employment is guaranteed either by statute or by
written contract. Notwithstanding any other provision herein, if a participant’s employment is terminated by reason of retirement, and the date of such termination occurs after the date that is 3 months prior to the last day of the Payment
Period, such participant’s rights under the Plan are not immediately terminated, and if the participant has not withdrawn from the Plan, such participant’s options shall be deemed to have been exercised on the last day of the Payment
Period in accordance with the terms of the Plan. 
  
 Article 15 -
Termination and Amendments to Plan. 
  
 The Plan may be terminated at any
time by the Company’s Board of Directors but such termination shall not affect options then outstanding under the Plan. If at any time shares of stock reserved for the purpose of the Plan remain available for purchase but not in sufficient
number to satisfy all then unfilled purchase requirements, the available shares shall be apportioned among participants in proportion to the amount of payroll deductions accumulated on behalf of each participant that would otherwise be used to
purchase stock, and the Plan shall terminate. Upon such termination or any other termination of the Plan, all payroll deductions not used to purchase stock will be refunded, without interest. 
  
 The Committee or the Board of Directors may from time to time adopt amendments to the Plan
provided that, without the approval of the shareholders of the Company, no amendment may (i) increase the number of shares that may be issued under the Plan; (ii) change the class of employees eligible to receive options under the Plan, if such
action would be treated as the adoption of a new plan for purposes of Code Section 423(b) and the regulations thereunder; (iii) cause Rule 16b-3 under the Securities Exchange Act of 1934 to become inapplicable to the Plan; or (iv) materially revise
the plan pursuant to the rules and regulations of the NYSE. 
  
 Article 16 -
Limits on Sale of Stock Purchased under the Plan. 
  
 The Plan is
intended to provide shares of Common Stock for investment and not for resale. The Company does not, however, intend to restrict or influence any employee in the conduct of his or her own affairs. An employee may, therefore, sell stock purchased
under the Plan at any time the employee chooses, subject to compliance with any applicable federal or state securities laws and subject to any restrictions imposed under Article 21 to ensure that tax withholding obligations are satisfied. THE
EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK. 
  
 Article 17 - Participating Subsidiaries. 
  
 The term
“participating subsidiary” shall mean any present or future subsidiary of the Company, as that term is defined in Section 424(f) of the Code, that is designated from time to time by the Board of Directors to participate in the Plan. The
Board of Directors shall have the power to make such designation before or after the Plan is approved by the shareholders. 
  

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 Article 18 - Optionees Not Shareholders. 
  
 Neither the granting of an option to an employee nor the deductions from his or her pay shall constitute such employee a stockholder of the
shares covered by an option until such shares have been actually purchased by the employee. 
  
 Article 19 - Application of Funds. 
  
 The proceeds received by the Company from the sale of Common Stock pursuant to options granted under the Plan will be used for general corporate purposes. 
  
 Article 20 - Notice to Company of Disqualifying Disposition. 
  
 By electing to participate in the Plan, each participant agrees to notify the Company in writing immediately after the participant transfers
Common Stock acquired under the Plan, if such transfer occurs within two years after the first business day of the Payment Period in which such Common Stock was acquired. Each participant further agrees to provide any information about such a
transfer as may be requested by the Company or any subsidiary corporation in order to assist it in complying with the tax laws. Such dispositions generally are treated as “disqualifying dispositions” under Sections 421 and 424 of the Code,
which have certain tax consequences to participants and to the Company and its participating subsidiaries. 
  
 Article 21 - Withholding of Additional Income Taxes. 
  
 By electing to participate in the Plan, each participant acknowledges that the Company and its participating subsidiaries are required to withhold taxes with respect to the amounts deducted from the participant’s
compensation and accumulated for the benefit of the participant under the Plan, and each participant agrees that the Company and its participating subsidiaries may deduct additional amounts from the participant’s compensation, when amounts are
added to the participant’s account, used to purchase Common Stock or refunded, in order to satisfy such withholding obligations. Each participant further acknowledges that when Common Stock is purchased under the Plan the Company and its
participating subsidiaries may be required to withhold taxes with respect to all or a portion of the difference between the fair market value of the Common Stock purchased and its purchase price, and each participant agrees that such taxes may be
withheld from compensation otherwise payable to such participant. It is intended that tax withholding will be accomplished in such a manner that the full amount of payroll deductions elected by the participant under Article 7 will be used to
purchase Common Stock. However, if amounts sufficient to satisfy applicable tax withholding obligations have not been withheld from compensation otherwise payable to any participant, then, notwithstanding any other provision of the Plan, the Company
may withhold such taxes from the participant’s accumulated payroll deductions and apply the net amount to the purchase of Common Stock, unless the participant pays to the Company, prior to the exercise date, an amount sufficient to satisfy such
withholding obligations. Each participant further acknowledges that the Company and its participating subsidiaries may be required to withhold taxes in connection with the disposition of stock acquired under the Plan and agrees that the Company or
any participating subsidiary may take whatever action it considers appropriate to satisfy such withholding requirements, including 
  

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 deducting from compensation otherwise payable to such participant an amount sufficient to satisfy such withholding
requirements or conditioning any disposition of Common Stock by the participant upon the payment to the Company or such subsidiary of an amount sufficient to satisfy such withholding requirements. 
  
 Article 22 - Governmental Regulations. 
  
 The Company’s obligation to sell and deliver shares of Common Stock under the Plan is
subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such shares. 
  
 Government regulations may impose reporting or other obligations on the Company with respect to the Plan. For example, the Company may be required to identify shares of
Common Stock issued under the Plan on its stock ownership records and send tax information statements to employees and former employees who transfer title to such shares. 
  
 Article 23 - Governing Law. 
  
 The validity and construction of the Plan shall be governed by the laws of Massachusetts, without giving effect to the principles of conflicts of law thereof. 

 
 Article 24 - Approval of Board of Directors and Stockholders of the Company.

  
 The Plan was adopted by the Board of Directors on March 19, 1996 and on
such date the Board of Directors resolved that the Plan was to be submitted to the shareholders of the Company for approval at the next meeting of shareholders. If the Plan does not receive such approval, all payroll deductions shall be returned
without interest and the Plan shall be terminated. 
  

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