Document:

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                                                                    Exhibit 10.1

                                 TERADYNE, INC.

                         1991 EMPLOYEE STOCK OPTION PLAN

                    (Amended and Restated as of May 23, 2002)

     1. Purpose. This 1991 Employee Stock Option Plan (the "Plan") is intended
to provide incentives (a) to the employees of Teradyne, Inc. (the "Company"),
its parent (if any) and any present or future subsidiaries of the Company
(collectively, "Related Corporations") by providing them with opportunities to
purchase stock in the Company pursuant to options which qualify as "incentive
stock options" under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), granted hereunder ("ISO" or "ISOs"); and (b) to directors,
employees and consultants of the Company and Related Corporations by providing
them with opportunities to purchase stock in the Company pursuant to
non-statutory stock options granted hereunder ("NSO" or "NSOs"). Both ISOs and
NSOs are referred to hereafter individually as an "Option" and collectively as
"Options." As used herein, the terms "parent" and "subsidiary" mean "parent
corporation" and "subsidiary corporation" as those terms are defined in Section
424 of the Code.

     2. Administration of the Plan.

          A. Board or Committee Administration. The Plan shall be administered
     by the Board of Directors of the Company (the "Board") or, subject to
     paragraph 2(B) (relating to compliance with Section 162(m) of the Code), by
     a committee appointed by the Board (the "Committee"); provided, that to the
     extent required by Rule 16b-3 of the Securities and Exchange Commission
     ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
     "1934 Act"), with respect to specific grants of Options, the Plan shall be
     administered by a disinterested administrator or administrators within the
     meaning of Rule 16b-3. Hereinafter all references in this Plan to the
     "Committee" shall mean the Board if no Committee has been appointed.
     Subject to ratification of the grant of each Option by the Board (if so
     required by applicable state law), and subject to the terms of the Plan,
     the Committee shall have the authority to (i) determine the employees of
     the Company and Related Corporations (from among the class of employees
     eligible under paragraph 3 to receive ISOs) to whom ISOs may be granted,
     and to determine the individuals and entities (from among the class of
     individuals and entities eligible under paragraph 3 to receive NSOs) to
     whom NSOs may be granted; (ii) determine the time or times at which Options
     may be granted; (iii) determine the option price of shares subject to each
     Option; (iv) determine whether each Option granted shall be an ISO or a
     NSO; (v) determine (subject to paragraph 7) the time or times when each
     Option shall become exercisable and the duration of the exercise period;
     (vi) determine whether restrictions such as repurchase options are to be
     imposed on shares subject to Options, and the nature of such restrictions
     if any, and (vii) interpret the Plan and prescribe and rescind rules and
     regulations relating to it. 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. The Committee may
     from time to time adopt such rules and regulations for carrying out the
     Plan as it may deem best. No member of the Board 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.

          B. Performance-Based Compensation. The Board, in its discretion, may
     take such action as may be necessary to ensure that Options granted under
     the Plan qualify as "qualified performance-based compensation" within the
     meaning of Section 162(m) of the Code and applicable regulations
     promulgated thereunder ("Performance-Based Compensation"). Such action may
     include, in the Board's discretion, some or all of the following (i) if the
     Board determines that Options granted under the Plan generally shall
     constitute Performance-Based

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                                       -2-

     Compensation, the Plan shall be administered, to the extent required for
     such Options to constitute Performance-Based Compensation, by a Committee
     consisting solely of two or more "outside directors" (as defined in
     applicable regulations promulgated under Section 162(m) of the Code,
     (ii) if any NSOs with an exercise price less than the fair market value per
     share of Common Stock are granted under the Plan and the Board determines
     that such Options should constitute Performance-Based Compensation, such
     Options shall be made exercisable only upon the attainment of a
     pre-established, objective performance goal established by the Committee,
     and such grant shall be submitted for, and shall be contingent upon
     shareholder approval and (iii) Options granted under the Plan may be
     subject to such other terms and conditions as are necessary for
     compensation recognized in connection with the exercise of such Option or
     the disposition of Common Stock (as defined herein) acquired pursuant to
     such Option, to constitute Performance-Based Compensation.

     3. Eligible Employees and Others. ISOs may be granted to any employee of
the Company or any Related Corporation. NSOs may be granted to any employee,
consultant or director of the Company or any Related Corporation; provided, that
no Option may be granted hereunder to any non-employee director. Granting of any
option to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of Options.

     4. Stock. The stock subject to Options shall be authorized but unissued
shares of Common Stock of the Company, par value $.125 per share (the "Common
Stock"), or shares of Common Stock reacquired by the Company in any manner. The
aggregate number of shares which may be issued pursuant to the Plan is
30,000,000, subject to adjustment as provided in paragraph 13. 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 for
grants of Options under the Plan.

     No employee of the Company or any Related Corporation may be granted
Options to acquire, in the aggregate, more than 300,000 shares of Common Stock
under the Plan during any fiscal year of the Company. 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 or shall be repurchased by the Company, the shares subject to such Option
shall be included in the determination of the aggregate number of shares of
Common Stock deemed to have been granted to such employee under the Plan.

     5. Granting of Options. Options may be granted under the Plan at any time
after March 13, 1991 and prior to March 13, 2011. The date of grant of an Option
under the Plan will be the date specified by the Committee at the time it grants
the Option; provided, however, that such date shall not be prior to the date on
which the Committee acts to approve the grant. The Committee shall have the
right, with the consent of the optionee, to convert an ISO granted under the
Plan to a NSO pursuant to paragraph 16.

     6. Minimum Option Price; ISO Limitations.

          A. Price for NSOs. The price per share specified in the agreement
     relating to each NSO granted under the Plan shall in no event be less than
     the minimum legal consideration therefor required under the laws of the
     Commonwealth of Massachusetts. No more than 200,000 NSOs may be granted
     under the Plan for less than "fair market value" (as hereinafter defined).

          B. Price for ISOs. The price per share specified in the agreement
     relating to each ISO granted under the Plan shall not be less than the fair
     market value per share of Common Stock on the date of such grant. In the
     case of an ISO to be granted to an employee owning stock

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                                       -3-

     possessing more than ten percent of the total combined voting power of all
     classes of stock of the Company or any Related Corporation, the price per
     share specified in the agreement relating to such ISO shall not be less
     than 110 percent of the fair market value of Common Stock on the date of
     grant.

          C. $100,000 Annual Limitation on ISOs. Each eligible employee may be
     granted ISOs only to the extent that, in the aggregate under this Plan and
     all incentive stock option plans of the Company and any Related
     Corporation, such ISOs do not become exercisable for the first time by such
     employee during any calendar year in a manner which would entitle the
     employee to purchase more than $100,000 in fair market value (determined at
     the time the ISOs were granted) of Common Stock in that year. Any options
     granted to an employee in excess of such amount will be granted as NSOs.

          D. Determination of Fair Market Value. 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 date such Option is
     granted and shall mean (i) the average (on that date) of the high, low and
     closing 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
     List, 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. However, if the Common Stock is not publicly
     traded at the time an Option is granted under the Plan, "fair market value"
     shall be deemed to be the fair 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.

     7. Option Duration. Subject to earlier termination as provided in
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than (i) ten years and one day from the date of grant in
the case of NSOs, (ii) ten years from the date of grant in the case of ISOs
generally, and (iii) five years from the date of grant in the case of ISOs
granted to an employee owning stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or any
Related Corporation. Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a NSO pursuant to paragraph 16.

     8. Exercise of Option. Subject to the provisions of paragraphs 9 through
12, each option granted under the Plan shall be exercisable as follows:

          A. Vesting. The Option shall either be fully exercisable on the date
     of grant or shall become exercisable thereafter in such installments as the
     Committee may specify.

          B. Full Vesting of Installments. Once an installment becomes
     exercisable it shall remain exercisable until expiration or termination of
     the Option, unless otherwise specified by the Committee.

          C. Partial Exercise. Each Option or installment may be exercised at
     any time or from time to time, in whole or in part, for up to the total
     number of shares with respect to which it is then exercisable.

          D. Acceleration of Vesting. The Committee shall have the right to
     accelerate the date of exercise of any installment of any Option; provided,
     that the Committee shall

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                                       -4-

     not, without the consent of the optionee, accelerate the exercise date of
     any installment of any Option granted to any employee as an ISO (and not
     previously converted into a NSO pursuant to paragraph 16) if such
     acceleration would violate the annual vesting limitation contained in
     Section 422 of the Code, as described in paragraph 6(C).

     9. Termination of Employment. If an optionee ceases to be employed by the
Company and all Related Corporations other than by reason of death or disability
as defined in paragraph 10, no further installments of his Options shall become
exercisable, and his Options shall terminate after the passage of 90 days from
the date of termination of his employment; provided, that the Committee may
specify that NSOs may remain exercisable for more than 90 days from the date of
termination of employment; provided, further, that in no event shall any Option
or part or installment thereof become or remain exercisable after its specified
expiration date. Employment shall be considered as continuing uninterrupted
during any bona fide leave of absence (such as those attributable to illness,
military obligations or governmental service) provided that the period of such
leave does not exceed 90-days or, if longer, any period during which such
optionee's right to reemployment is guaranteed by statute. A bona fide leave of
absence with the written approval of the Committee shall not be considered an
interruption of employment under the Plan, provided that such written approval
contractually obligates the Company or any Related Corporation to continue the
employment of the optionee after the approved period of absence. Options granted
under the Plan shall not be affected by any change of employment within or among
the Company and Related Corporations, so long as the optionee continues to be an
employee of the Company or any Related Corporation. Nothing in the Plan shall be
deemed to give any grantee of any Option the right to be retained in employment
or other service by the Company or any Related Corporation for any period of
time.

     Notwithstanding anything to the contrary contained above, in the case of an
optionee who ceases to be employed by the Company and all Related Corporations
by reason of Normal Retirement (as defined herein), NSOs granted to such
optionee shall continue to vest and shall remain exercisable until the date
which is the earlier of (i) the NSOs' specified expiration date, or (ii)
immediately upon the date upon which such optionee becomes Engaged by a
Competitor (as defined herein), to the extent of the number of shares which have
vested prior to and during such period. Normal Retirement shall mean such
optionee's retirement from the Company or a Related Corporation either (a) in
accordance with any combination of age and years of service or any other
standard as shall have been established by the Committee as a prerequisite to
being eligible to receive retirement benefits then in effect, or (b) as
determined by the Committee, in its sole discretion. An optionee shall be deemed
to be Engaged by a Competitor on the date such optionee directly or indirectly
accepts employment, a directorship or consulting position, or otherwise renders
services, within a country in which the optionee had been actively employed by
the Company or a Related Corporation at any time during the ten-year period
immediately prior to such optionee's Normal Retirement, with or without
compensation, by or for any person, firm, or organization engaged in the sale,
servicing, developing, manufacturing or merchandising of products or services in
competition with any product or service of the Company. The Committee shall have
the absolute discretion to determine whether and as of what date an optionee is
Engaged by a Competitor.

     10. Death; Disability.

          A. Death. If an optionee ceases to be employed by the Company and all
     Related Corporations by reason of his death, any Option of his may be
     exercised, to the extent of the number of shares with respect to which he
     has theretofore been granted Options (whether or not such Options have
     vested in accordance with their terms) by his estate, personal
     representative or beneficiary who has acquired the Option by will or by the
     laws of descent and distribution, (i) in the case of ISOs, at any time
     prior to the earlier of the ISOs' specified expiration date or 180 days
     from the date of the optionee's death or

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                                       -5-

     (ii) in the case of NSOs, at any time prior to the earlier of the NSOs'
     specified expiration date or one year from the date of the optionee's
     death.

          B. Disability. If an optionee ceases to be employed by the Company and
     all Related Corporations by reason of his disability, any Option
     theretofore granted to such optionee shall remain exercisable until the
     date which is (i) in the case of ISOs, the earlier of the ISOs, specified
     expiration date or 180 days from the date of the termination of the
     optionee's employment or (ii) in the case of NSOs, the earlier of the NSOs'
     specified expiration date or 33 months from the date of the termination of
     the optionee's employment, to the extent of the number of shares (a) which,
     in the case of ISOs, have vested prior to and during the period specified
     in clause (i) and (b) which, in the case of NSOs, have vested prior to and
     during the period which is 30 months from the date the optionee ceases to
     be employed by the Company. For the purposes of this Plan, the term
     "disability" shall mean "permanent and total disability" as defined in
     Section 22(e)(3) of the Code or any successor statute.

     11. Assignability. No Option shall be assignable or transferable by the
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the optionee each Option shall be exercisable only by him.

     12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments. The proper
officers of the Company are authorized and directed to take any and all action
necessary or advisable from time to time to carry out the terms of such
instruments.

     13. Adjustments. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to him hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such Option:

          A. Stock Dividends and Stock Splits. If the shares of Common Stock
     shall be subdivided 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. Consolidations or Mergers. If the Company is to be consolidated
     with or acquired by another entity in a merger, 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, as to
     outstanding Options, either (i) make appropriate provision for the
     continuation of such Options by substituting on an equitable basis for the
     shares then subject to such Options the consideration payable with respect
     to the outstanding shares of Common Stock in connection with the
     Acquisition; or (ii) upon written notice to the optionees, provide that all
     Options must be exercised, to the extent then exercisable, within a
     specified number of days of the date of such notice, at the end of which
     period the options

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                                       -6-

     shall terminate; or (iii) terminate all Options in exchange for a cash
     payment equal to the excess of the fair market value of the shares subject
     to such Options (to the extent then exercisable) over the exercise price
     thereof.

          C. Recapitalization or Reorganization. In the event of a
     recapitalization or reorganization of the Company (other than a transaction
     described in subparagraph B above) pursuant to which securities of the
     Company or of another corporation are issued with respect to the
     outstanding shares of Common Stock, an optionee upon exercising an Option
     shall be entitled to receive for the purchase price paid upon such exercise
     the securities he would have received if he had exercised his Option prior
     to such recapitalization or reorganization.

          D. Modification of ISOs. Notwithstanding the foregoing, any
     adjustments made pursuant to subparagraphs A, B or C with respect to ISOs
     shall be made only after the Committee, after consulting with counsel for
     the Company, determines whether such adjustments would constitute a
     "modification" of such ISOs (as that term is defined in Section 424 of the
     Code) or would cause any adverse tax consequences for the holders of such
     ISOs. If the Committee determines that such adjustments made with respect
     to ISOs would constitute a modification of such ISOs, it may refrain from
     making such adjustments.

          E. Dissolution or Liquidation. In the event of the proposed
     dissolution or liquidation of the Company, each Option will terminate
     immediately prior to the consummation of such proposed action or at such
     other time and subject to such other conditions as shall be determined by
     the Committee.

          F. 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.

          G. Fractional Shares. No fractional shares shall be issued under the
     Plan and the optionee shall receive from the Company cash in lieu of such
     fractional shares.

          H. Adjustments. Upon the happening of any of the events described in
     subparagraphs A, B or C above, the class and aggregate number of shares set
     forth in paragraph 4 hereof that are subject to Options which previously
     have been or subsequently may be granted under the Plan shall also be
     appropriately adjusted to reflect the events described in such
     subparagraphs. The Committee or the Successor Board shall determine the
     specific adjustments to be made under this paragraph 13 and, subject to
     paragraph 2, its determination shall be conclusive.

     If any person or entity owning restricted Common Stock obtained by exercise
of an Option receives shares or securities or cash in connection with a
corporate transaction described in subparagraphs A, B or C above as a result of
owning such restricted Common Stock, such shares or securities or cash shall be
subject to all of the conditions and restrictions applicable to the restricted
Common Stock with respect to which such shares or securities or cash were
issued, unless otherwise determined by the Committee or the Successor Board.

     14. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address. Such notice shall identify the Option being exercised
and specify the number of shares as to which such Option is being exercised,
accompanied by full payment of the purchase price therefor either

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                                       -7-

(a) in United States dollars in cash or by check, or (b) at the discretion of
the Committee, through delivery of shares of Common Stock having fair market
value equal as of the date of the exercise to the cash exercise price of the
Option, or (c) at the discretion of the Committee in exceptional cases, by
delivery of the optionee's personal recourse note bearing interest payable not
less than annually at no less than 100% of the lowest applicable Federal rate,
as defined in Section 1274(d) of the Code, or (d) at the discretion of the
Committee, by any combination of (a), (b) and (c) above. If the Committee
exercises its discretion to permit payment of the exercise price of an ISO by
means of the methods set forth in clauses (b) or (c) of the preceding sentence,
such discretion shall be exercised in writing at the time of the grant of the
ISO in question. Alternatively, payment may be made 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),
or consistent with applicable law, through the delivery of an assignment to the
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. The holder of an Option shall
not have the rights of a shareholder with respect to the shares covered by his
option until the date of issuance of a stock certificate to him for such shares.
Except as expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.

     15. Term and Amendment of Plan. This Plan was adopted by the Board and
effective on March 13, 1991, and shall expire on the end of the day on the date
twenty years following the date of effectiveness (except as to Options
outstanding on that date). The Board may at any time terminate the Plan or make
such modification or amendment thereof as it deems advisable; provided, however,
that the Board may not, without approval by the affirmative vote of the holders
of a majority of the securities of the Company present, or represented, and
entitled to vote at a meeting duly held in accordance with the applicable laws
of the state in which the Company is incorporated, (i) materially increase the
benefits accruing to participants under the Plan; (ii) increase the number of
shares for which Options may be granted under the Plan; or (iii) materially
modify the requirements as to eligibility for participation in the Plan.
Termination or any modification or amendment of the Plan shall not, without
consent of a participant, affect his rights under an option previously granted
to him.

     16. Conversion of ISOs into NSOs; Termination of ISOs. The Committee, with
the written approval of any optionee, may in its discretion take such actions as
may be necessary to convert such optionee's ISOs (or any installments of
portions of installments thereof) that have not been exercised on the date of
conversion into NSOs at any time prior to the expiration of such ISOs,
regardless of whether the optionee is an employee of the Company or a Related
Corporation at the time of such conversion. Such actions may include, but not be
limited to, extending the exercise period or reducing the exercise price of the
appropriate installments of such Options. At the time of such conversion, the
Committee (with the consent of the optionee) may impose such conditions on the
exercise of the resulting NSOs as the Committee in its discretion may determine,
provided that such conditions shall not be inconsistent with this Plan. Nothing
in the Plan shall be deemed to give any optionee the right to have such
optionee's ISOs converted into NSOs, and no such conversion shall occur until
and unless the Committee takes appropriate action. The Committee, with the
consent of the optionee, may also terminate any portion of any ISO that has not
been exercised at the time of such termination.

     17. Application of Funds. The proceeds received by the Company from the
sale of shares pursuant to Options granted under the Plan shall be used for
general corporate purposes.

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                                       -8-

     18. Governmental Regulation. The Company's obligation to sell and deliver
shares of Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.

     19. Withholding of Additional Income Taxes. Upon the exercise of a NSO, the
making of a Disqualifying Disposition (as defined in paragraph 20) or the
vesting of restricted Common Stock acquired on the exercise of an Option, the
Company, in accordance with Section 3402(a) of the Code, may require the
optionee to pay additional withholding taxes in respect of the amount that is
considered compensation includible in such person's gross income. The Committee
in its discretion may condition (i) the exercise of an Option or (ii) the
vesting of restricted Common Stock acquired by exercising an Option, on the
optionee's payment of such additional withholding taxes.

     20. Notice to Company of Disqualifying Disposition. Each employee who
receives ISO shall agree to notify the Company in writing immediately after the
employee makes a disqualifying disposition of any Common Stock received pursuant
to the exercise of an ISO (a "Disqualifying Disposition"). Disqualifying
Disposition means any disposition (including any sale) of such stock before the
later of (a) two years after the employee was granted the ISO under which he
acquired such stock, or (b) one year after the employee acquired such stock by
exercising such ISO. If the employee has died before such stock is sold, these
holding period requirements do not apply and no Disqualifying Disposition will
thereafter occur.

     21. Governing Laws; Construction. The validity and construction of the Plan
and the instruments evidencing Options shall be governed by the laws of the
Commonwealth of Massachusetts. In construing this Plan, the singular shall
include the plural and the masculine gender shall include the feminine and
neuter, unless the context otherwise requires.<PAGE>

                                                                    Exhibit 10.2

                                 TERADYNE, INC.

                         1997 EMPLOYEE STOCK OPTION PLAN

                         (as amended as of May 23, 2002)

     1. Purpose. The purpose of the Teradyne, Inc. 1997 Employee Stock Option
Plan (the "Plan") is to encourage key employees of Teradyne, Inc. (the
"Company") and of any present or future parent or subsidiary of the Company
(collectively, "Related Corporations") and other individuals who render services
to the Company or a Related Corporation, by providing opportunities to
participate in the ownership of the Company and its future growth through
(a) the grant of options which qualify as "incentive stock options" ("ISOs")
under Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"); (b) the grant of options which do not qualify as ISOs ("Non-Qualified
Options"); (c) awards of stock in the Company ("Awards"); and (d) opportunities
to make direct purchases of stock in the Company ("Purchases"). Both ISOs and
Non-Qualified Options are referred to hereafter individually as an "Option" and
collectively as "Options." Options, Awards and authorizations to make Purchases
are referred to hereafter collectively as "Stock Rights." As used herein, the
terms "parent" and "subsidiary" mean "parent corporation" and "subsidiary
corporation," respectively, as those terms are defined in Section 424 of the
Code.

     2. Administration of the Plan.

          A. Board or Committee Administration. The Plan shall be administered
     by the Board of Directors of the Company (the "Board") or, subject to
     paragraph 2(D) (relating to compliance with Section 162(m) of the Code), by
     a committee appointed by the Board (the "Committee"). Hereinafter, all
     references in this Plan to the "Committee" shall mean the Board if no
     Committee has been appointed. Subject to ratification of the grant or
     authorization of each Stock Right by the Board (if so required by
     applicable state law), and subject to the terms of the Plan, the Committee
     shall have the authority to (i) determine to whom (from among the class of
     employees eligible under paragraph 3 to receive ISOs) ISOs shall be
     granted, and to whom (from among the class of individuals and entities
     eligible under paragraph 3 to receive Non-Qualified Options and Awards and
     to make Purchases) Non-Qualified Options, Awards and authorizations to make
     Purchases may be granted; (ii) determine the time or times at which Options
     or Awards shall be granted or Purchases made; (iii) determine the purchase
     price of shares subject to each Option or Purchase, which prices shall not
     be less than the minimum price specified in paragraph 6; (iv) determine
     whether each Option granted shall be an ISO or a Non-Qualified Option;
     (v) determine (subject to paragraph 7) the time or times when each Option
     shall become exercisable and the duration of the exercise period;
     (vi) extend the period during which outstanding Options may be exercised;
     (vii) determine whether restrictions such as repurchase options are to be
     imposed on shares subject to

<PAGE>
                                       -2-

     Options, Awards and Purchases and the nature of such restrictions, if any,
     and (viii) interpret the Plan and prescribe and rescind rules and
     regulations relating to it. If the Committee determines to issue a
     Non-Qualified Option, it shall take whatever actions it deems necessary,
     under Section 422 of the Code and the regulations promulgated thereunder,
     to ensure that such Option is not treated as an ISO. The interpretation and
     construction by the Committee of any provisions of the Plan or of any Stock
     Right granted under it shall be final unless otherwise determined by the
     Board. The Committee may from time to time adopt such rules and regulations
     for carrying out the Plan as it may deem advisable. No member of the Board
     or the Committee shall be liable for any action or determination made in
     good faith with respect to the Plan or any Stock Right granted under it.

          B. Committee Actions. The Committee may select one of its members as
     its chairman, and shall hold meetings at such time and place as it may
     determine. A majority of the Committee shall constitute a quorum and acts
     of a majority of the members of the Committee at a meeting at which a
     quorum is present, or acts reduced to or approved in writing by all the
     members of the Committee (if consistent with applicable state law), shall
     be the valid acts of the Committee. From time to time the Board may
     increase the size of the Committee and appoint additional members thereof,
     remove members (with or without cause) and appoint new members in
     substitution therefor, fill vacancies however caused, or remove all members
     of the Committee and thereafter directly administer the Plan.

          C. Grant of Stock Rights to Board Members. Stock Rights may be granted
     to members of the Board. All grants of Stock Rights to members of the Board
     shall in all respects be made in accordance with the provisions of this
     Plan applicable to other eligible persons. Members of the Board who either
     (i) are eligible to receive grants of Stock Rights pursuant to the Plan or
     (ii) have been granted Stock Rights may vote on any matters affecting the
     administration of the Plan or the grant of any Stock Rights pursuant to the
     Plan, except that no such member shall act upon the granting to himself or
     herself of Stock Rights, but any such member may be counted in determining
     the existence of a quorum at any meeting of the Board during which action
     is taken with respect to the granting to such member of Stock Rights.

          D. Performance-Based Compensation. The Board, in its discretion, may
     take such action as may be necessary to ensure that Stock Rights granted
     under the Plan qualify as "qualified performance-based compensation" within
     the meaning of Section 162(m) of the Code and applicable regulations
     promulgated thereunder ("Performance-Based Compensation"). Such action may
     include, in the Board's discretion, some or all of the following (i) if the
     Board determines that Stock Rights granted under the Plan generally shall
     constitute Performance-Based Compensation, the Plan shall be administered,
     to the extent required for such Stock Rights to constitute
     Performance-Based Compensation, by a

<PAGE>
                                       -3-

     Committee consisting solely of two or more "outside directors" (as defined
     in applicable regulations promulgated under Section 162(m) of the Code),
     (ii) if any Non-Qualified Options with an exercise price less than the fair
     market value per share of Common Stock are granted under the Plan and the
     Board determines that such Options should constitute Performance-Based
     Compensation, such options shall be made exercisable only upon the
     attainment of a pre-established, objective performance goal established by
     the Committee, and such grant shall be submitted for, and shall be
     contingent upon shareholder approval and (iii) Stock Rights granted under
     the Plan may be subject to such other terms and conditions as are necessary
     for compensation recognized in connection with the exercise or disposition
     of such Stock Right or the disposition of Common Stock acquired pursuant to
     such Stock Right, to constitute Performance-Based Compensation.

     3. Eligible Employees and Others. ISOs may be granted only to employees of
the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases may be granted to any employee, consultant or
director of the Company or any Related Corporation; provided, however, that no
Option may be granted hereunder to any non-employee director. The Committee may
take into consideration a recipient's individual circumstances in determining
whether to grant a Stock Right. The granting of any Stock Right to any
individual or entity shall neither entitle that individual or entity to, nor
disqualify such individual or entity from, participation in any other grant of
Stock Rights.

     4. Stock. The stock subject to Stock Rights shall be authorized but
unissued shares of Common Stock of the Company, par value $.125 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued pursuant to the Plan
is 53,000,000, subject to adjustment as provided in paragraph 13. 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 or shall be repurchased by the Company, the unpurchased shares of
Common Stock subject to such Option shall again be available for grants of Stock
Rights under the Plan.

     No employee of the Company or any Related Corporation may be granted
Options to acquire, in the aggregate, more than 4,000,000 shares of Common Stock
under the Plan during any fiscal year of the Company. 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 or shall be repurchased by the Company, the shares subject to such Option
shall be included in the determination of the aggregate number of shares of
Common Stock deemed to have been granted to such employee under the Plan.

     5. Granting of Stock Rights. Stock Rights may be granted under the Plan at
any time on or after January 28, 1997 and prior to January 25, 2007. The date of
grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant. The Committee shall have the right, with the consent of the optionee, to
convert an ISO granted under the Plan to a Non-Qualified Option pursuant to
paragraph 16.

<PAGE>
                                       -4-

     6. Minimum Option Price; ISO Limitations.

          A. Price for Non-Qualified Options, Awards and Purchases. Subject to
     paragraph 2(D) (relating to compliance with Section 162(m) of the Code),
     the exercise price per share specified in the agreement relating to each
     Non-Qualified Option granted, and the purchase price per share of stock
     granted in any Award or authorized as a Purchase, under the Plan may be
     less than the fair market value of the Common Stock of the Company on the
     date of grant; provided that, in no event shall such exercise price or such
     purchase price be less than the minimum legal consideration required
     therefor under the laws of any jurisdiction in which the Company or its
     successors in interest may be organized. No more than 400,000 Non-Qualified
     Options may be granted under the Plan for less than "fair market value" (as
     hereinafter defined).

          B. Price for ISOs. The exercise price per share specified in the
     agreement relating to each ISO granted under the Plan shall not be less
     than the fair market value per share of Common Stock on the date of such
     grant. In the case of an ISO to be granted to an employee owning stock
     possessing more than ten percent (10%) of the total combined voting power
     of all classes of stock of the Company or any Related Corporation, the
     price per share specified in the agreement relating to such ISO shall not
     be less than one hundred ten percent (110%) of the fair market value per
     share of Common Stock on the date of grant. For purposes of determining
     stock ownership under this paragraph, the rules of Section 424(d) of the
     Code shall apply.

          C. $100,000 Annual Limitation on ISO Vesting. Each eligible employee
     may be granted Options treated as ISOs only to the extent that, in the
     aggregate under this Plan and all incentive stock option plans of the
     Company and any Related Corporation, ISOs do not become exercisable for the
     first time by such employee during any calendar year with respect to stock
     having a fair market value (determined at the time the ISOs were granted)
     in excess of $100,000. Any Options granted to an employee in excess of such
     limitation will be granted as Non-Qualified Options, and the Company shall
     issue separate certificates to the optionee with respect to Options that
     are Non-Qualified Options and Options that are ISOs.

          D. Determination of Fair Market Value. 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 date of grant or, if the
     prices or quotes discussed in this sentence are unavailable for such date,
     the last business day for which such prices or quotes are available prior
     to the date of grant and shall mean (i) the average (on that date) of the
     high, low and closing 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

<PAGE>
                                       -5-

     (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. If the Common Stock is not publicly traded at the
     time an Option is granted under the Plan, "fair market value" shall mean
     the fair 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.

     7. Option Duration. Subject to earlier termination as provided in
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years and one day from the date of grant in the case of Non-Qualified Options,
(ii) ten years from the date of grant in the case of ISOs and (iii) five years
from the date of grant in the case of ISOs granted to an employee owning stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Related Corporation, as determined under
paragraph 6(B). Subject to earlier termination as provided in paragraphs 9 and
10, the term of each ISO shall be the term set forth in the original instrument
granting such ISO, except with respect to any part of such ISO that is converted
into a Non-Qualified Option pursuant to paragraph 16.

     8. Exercise of Option. Subject to the provisions of paragraphs 9 through
12, each Option granted under the Plan shall be exercisable as follows:

          A. Vesting. The Option shall either be fully exercisable on the date
     of grant or shall become exercisable thereafter in such installments as the
     Committee may specify.

          B. Full Vesting of Installments. Once an installment becomes
     exercisable, it shall remain exercisable until expiration or termination of
     the Option, unless otherwise specified by the Committee.

          C. Partial Exercise. Each Option or installment may be exercised at
     any time or from time to time, in whole or in part, for up to the total
     number of shares with respect to which it is then exercisable.

          D. Acceleration of Vesting. The Committee shall have the right to
     accelerate the date that any installment of any Option becomes exercisable;
     provided, that the Committee shall not, without the consent of an optionee,
     accelerate the permitted exercise date of any installment of any Option
     granted to any employee as an ISO (and not previously converted into a
     Non-Qualified Option pursuant to paragraph 16) if such acceleration would
     violate the annual vesting limitation contained in Section 422(d) of the
     Code, as described in paragraph 6(C).

<PAGE>
                                       -6-

     9. Termination of Employment. Unless otherwise specified in the agreement
relating to such ISO, if an optionee ceases to be employed by the Company and
all Related Corporations other than by reason of death or disability as defined
in paragraph 10, no further installments of his or her Options shall become
exercisable, and his or her Options shall terminate after the passage of 90 days
from the date of termination of his or her employment; provided, that the
Committee may specify that Non-Qualified Options may remain exercisable for more
than 90 days from the date of termination of employment; provided, further, that
in no event shall any Option or part or installment thereof become or remain
exercisable after its specified expiration date. Employment shall be considered
as continuing uninterrupted during any bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute. A
bona fide leave of absence with the written approval of the Committee shall not
be considered an interruption of employment under the Plan, provided that such
written approval contractually obligates the Company or any Related Corporation
to continue the employment of the optionee after the approved period of absence.
Options granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the right to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.

     Notwithstanding anything to the contrary contained above, in the case of an
optionee who ceases to be employed by the Company and all Related Corporations
by reason of Normal Retirement (as defined herein), Non-Qualified Options
granted to such optionee shall continue to vest and shall remain exercisable
until the date which is the earlier of (i) the Non-Qualified Options' specified
expiration date, or (ii) immediately upon the date upon which such optionee
becomes Engaged by a Competitor (as defined herein), to the extent of the number
of shares which have vested prior to and during such period. Normal Retirement
shall mean such optionee's retirement from the Company or a Related Corporation
either (a) in accordance with any combination of age and years of service or any
other standard as shall have been established by the Committee as a prerequisite
to being eligible to receive retirement benefits then in effect, or (b) as
determined by the Committee, in its sole discretion. An optionee shall be deemed
to be Engaged by a Competitor on the date such optionee directly or indirectly
accepts employment, a directorship or consulting position, or otherwise renders
services, within a country in which the optionee had been actively employed by
the Company or a Related Corporation at any time during the ten-year period
immediately prior to such optionee's Normal Retirement, with or without
compensation, by or for any person, firm, or organization engaged in the sale,
servicing, developing, manufacturing or merchandising of products or services in
competition with any product or service of the Company. The Committee shall have
the absolute discretion to determine whether and as of what date an optionee is
Engaged by a Competitor.

<PAGE>
                                       -7-

     10. Death; Disability.

          A. Death. If an optionee ceases to be employed by the Company and all
     Related Corporations by reason of his or her death, any Option owned by
     such optionee may be exercised, to the extent of the number of shares with
     respect to which such optionee has theretofore been granted Options
     (whether or not such Options have vested in accordance with their terms),
     by the estate, personal representative or beneficiary who has acquired the
     Option by will or by the laws of descent and distribution, (i) in the case
     of ISOs, at any time prior to the earlier of the ISOs' specified expiration
     date or 180 days from the date of such optionee's death or (ii) in the case
     of Non-Qualified Options, at any time prior to the earlier of the
     Non-Qualified Options specified expiration date or one year from the date
     of such optionee's death.

          B. Disability. If an optionee ceases to be employed by the Company and
     all Related Corporations by reason of his or her disability, any Option
     theretofore granted to such optionee shall remain exercisable until the
     date which is (i) in the case of ISOs, the earlier of such ISOs' specified
     expiration date or 180 days from the date of the termination of such
     optionee's employment or (ii) in the case of Non-Qualified Options, the
     earlier of the Non-Qualified Options specified expiration date or 33 months
     from the date of the termination of the optionee's employment, to the
     extent of the number of shares (a) which, in the case of ISOs, have vested
     prior to and during the period specified in clause (i) and (b) which, in
     the case of Non-Qualified Options, have vested prior to and during the
     period which is 30 months from the date the optionee ceases to be employed
     by the Company. For the purposes of the Plan, the term "disability" shall
     mean "permanent and total disability" as defined in Section 22(e)(3) of the
     Code or any successor statute.

     11. Assignability. No Option shall be assignable or transferable by the
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the optionee shall be exercisable only by such optionee.

     12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may determine. The Committee may from time to time confer authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such instruments. The proper officers of
the Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.

<PAGE>
                                       -8-

     13. Adjustments. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:

          A. Stock Dividends and Stock Splits. If the shares of Common Stock
     shall be subdivided 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. Consolidations or Mergers. If the Company is to be consolidated
     with or acquired by another entity in a merger, sale of all or
     substantially all of the Company's assets or otherwise (each, an
     "Acquisition"), the Committee or the board of directors of any entity
     assuming the obligations of the Company hereunder (the "Successor Board"),
     shall, as to outstanding Options, make appropriate provision for the
     continuation of such Options by substituting on an equitable basis for the
     shares then subject to such Options the consideration payable with respect
     to the outstanding shares of Common Stock in connection with the
     Acquisition.

          C. Recapitalization or Reorganization. In the event of a
     recapitalization or reorganization of the Company pursuant to which
     securities of the Company or of another corporation are issued with respect
     to the outstanding shares of Common Stock, an optionee upon exercising an
     Option shall be entitled to receive for the purchase price paid upon such
     exercise the securities he or she would have received if he or she had
     exercised such Option prior to such recapitalization or reorganization.

          D. Modification of ISOs. Notwithstanding the foregoing, any
     adjustments made pursuant to subparagraphs A, B or C with respect to ISOs
     shall be made only after the Committee, after consulting with counsel for
     the Company, determines whether such adjustments would constitute a
     "modification" of such ISOs (as that term is defined in Section 424 of the
     Code) or would cause any adverse tax consequences for the holders of such
     ISOs. If the Committee determines that such adjustments made with respect
     to ISOs would constitute a modification of such ISOs or would cause adverse
     tax consequences to the holders, it may refrain from making such
     adjustments.

          E. Dissolution or Liquidation. In the event of the proposed
     dissolution or liquidation of the Company, each Option will terminate
     immediately prior to the consummation of such proposed action or at such
     other time and subject to such other conditions as shall be determined by
     the Committee.

<PAGE>
                                       -9-

          F. 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.

          G. Fractional Shares. No fractional shares shall be issued under the
     Plan and the optionee shall receive from the Company cash in lieu of such
     fractional shares.

          H. Adjustments. Upon the happening of any of the events described in
     subparagraphs A, B or C above, the class and aggregate number of shares set
     forth in paragraph 4 hereof that are subject to Stock Rights which
     previously have been or subsequently may be granted under the Plan shall
     also be appropriately adjusted to reflect the events described in such
     subparagraphs. The Committee or the Successor Board shall determine the
     specific adjustments to be made under this paragraph 13 and, subject to
     paragraph 2, its determination shall be conclusive.

     If any person or entity owning restricted Common Stock obtained by exercise
of an Option receives shares or securities or cash in connection with a
corporate transaction described in subparagraphs A, B or C above as a result of
owning such restricted Common Stock, such shares or securities or cash shall be
subject to all of the conditions and restrictions applicable to the restricted
Common Stock with respect to which such shares or securities or cash were
issued, unless otherwise determined by the Committee or the Successor Board.

     14. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address. Such notice shall identify the Option being exercised
and specify the number of shares as to which such Option is being exercised,
accompanied by full payment of the purchase price therefor either (a) in United
States dollars in cash or by check, (b) at the discretion of the Committee,
through delivery of shares of Common Stock having a fair market value equal as
of the date of the exercise to the cash exercise price of the Option, (c) at the
discretion of the Committee in exceptional cases, by delivery of the grantee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the lowest applicable Federal rate, as defined in Section
1274(d) of the Code, or (d) at the discretion of the Committee, by any
combination of (a), (b) and (c) above. If the Committee exercises its discretion
to permit payment of the exercise price of an ISO by means of the methods set
forth in clauses (b), (c) or (d) of the preceding sentence, such discretion
shall be exercised in writing at the time of the grant of the ISO in question.
Alternatively, payment may be made in whole or in part in shares of the Common

<PAGE>
                                       -10-

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), or
consistent with applicable law, through the delivery of an assignment to the
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, provided that the Committee
shall allow for such payment at the time of grant of the ISO. The holder of an
Option shall not have the rights of a shareholder with respect to the shares
covered by such Option until the date of issuance of a stock certificate to such
holder for such shares. Except as expressly provided above in paragraph 13 with
respect to changes in capitalization and stock dividends, no adjustment shall be
made for dividends or similar rights for which the record date is before the
date such stock certificate is issued.

     15. Term and Amendment of Plan. This Plan was adopted by the Board on
January 28, 1997, and shall expire at the end of the day on January 25, 2007
(except as to Options outstanding on that date). 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 by the affirmative vote of the holders of a majority of the
securities of the Company present, or represented, and entitled to vote at a
meeting duly held in accordance with the applicable laws of the state in which
the Company is incorporated, if (i) such approval would be necessary for Option
grants under the Plan to qualify for favorable treatment under Sections 162(m)
or 422 of the Code, or any successor provisions; or (ii) such approval is
otherwise required by law or the rules of any national securities exchange or
inter-dealer quotation system on which the Common Stock is then listed (in each
case, 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.

     16. Conversion of ISOs into Non-Qualified Options. The Committee, at the
written request or with the written consent of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but shall not be limited to, extending the exercise
period or reducing the exercise price of the appropriate installments of such
ISOs. At the time of such conversion, the Committee (with the consent of the
optionee) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Committee in its discretion may determine, provided
that such conditions shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have such optionee's ISOs
converted into Non-Qualified Options, and no such conversion shall occur until
and unless the Committee takes appropriate action. Upon the taking of such
action, the Company shall issue separate certificates to the optionee with
respect to Options that are Non-Qualified Options and Options that are ISOs.
The Committee, with the consent of the optionee, may also terminate any portion
of any ISO that has not been exercised at the time of such termination.

<PAGE>
                                       -11-

     17. Application Of Funds. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.

     18. Notice to Company of Disqualifying Disposition. Each employee who
receives an ISO shall agree to notify the Company in writing immediately after
such optionee makes a Disqualifying Disposition (as described in Sections 421,
422 and 424 of the Code and regulations thereunder) of any stock acquired
pursuant to the exercise of ISOs granted under the Plan. A Disqualifying
Disposition is generally any disposition occurring on or before the later of
(a) the date two years following the date the ISO was granted or (b) the date
one year following the date the ISO was exercised.

     19. Withholding of Additional Income Taxes. Upon the exercise of a
Non-Qualified Option, the transfer of a Non-Qualified Stock Option pursuant to
an arm's-length transaction, the grant of an Award, the making of a Purchase of
Common Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 18), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation includible in such Optionee's gross income. The Committee in its
discretion may condition (i) the exercise of an Option, (ii) the transfer of a
Non-Qualified Stock Option, (iii) the grant of an Award, (iv) the making of a
Purchase of Common Stock for less than its fair market value, or (v) the vesting
or transferability of restricted stock or securities acquired by exercising an
Option, on the grantee's making satisfactory arrangement for such withholding.
Such arrangement may include payment by the grantee in cash or by check of the
amount of the withholding taxes or, at the discretion of the Committee, by the
grantee's delivery of previously held shares of Common Stock or the withholding
from the shares of Common Stock otherwise deliverable upon exercise of a Option
shares having an aggregate fair market value equal to the amount of such
withholding taxes.

     20. Governmental Regulation. The Company's obligation to sell and deliver
shares of Common Stock under this 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
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.

     21. Governing Law. The validity and construction of the Plan and the
instruments evidencing Stock Rights shall be governed by the laws of The
Commonwealth of Massachusetts, or the laws of any jurisdiction in which the
Company or its successors in interest may be organized.

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