NOTICE OF OPTION GRANT
In recognition of your contributions to Teradyne, you have been granted an option to purchase XX shares of Teradyne common stock at the price of $XX per share. This grant, XX, was approved effective XXX and expires XXX. This grant is a non-qualified option under the Internal Revenue Code.
This option is subject to the Stock Option Terms printed on the reverse side and the terms of the 1997 Employee Stock Option Plan, as amended. The option becomes exercisable over time as described in the Stock Option Terms.
In granting stock options, Teradyne seeks to provide employees with incentive to help drive the companys future success and to share in the economic benefits of that success. We all look forward to your contributions to that effort.
This option has been duly authorized as of XXX.
/s/ Eileen Casal
V.P., General Counsel and Clerk
STOCK OPTION TERMS
1. Option Exercise and Vesting
(a) These options vest yearly on the grant date. An employee with more than one year of service on the Effective Date of this grant may exercise up to 20% of the total grant during the first year and up to an additional 20% of the total grant each year thereafter until the total grant is fully exercisable. An employee with less than one year of service on the Effective Date may not exercise this option during the first year of the grant, but may exercise up to 25% of the total grant during each succeeding year until the total grant is fully exercisable.
(b) After options become exercisable, they can be exercised at any time prior to the Expiration Date. The minimum exercise amount is 10 shares, adjusted for stock splits, etc.
(c) Separate rules apply for exercising options after termination, death or disability of the optionee, as set forth in Sections 9 and 10 of the Plan. The optionee or his legal representative is encouraged to consult with the Company in that event.
(d) This option is not assignable or transferable (except by will or the laws of descent and distribution), and can be exercised only by the optionee during his lifetime.
2. Procedure for Exercising Options
Options are exercised by giving written notice to the Company and paying the full option price plus any required Government tax payment. The Company will pay any transfer or issue tax and deliver a certificate for the shares purchased. Payment can be made by a combination of cash, certified or bank check, personal check, or delivery of shares of Teradyne common stock. The optionees rights as a shareholder begin on the date the certificate is issued.
3. Capital Changes and Business Succession
Section 13 of the Plan contains provision for adjusting the number of shares exercisable under this option if a recapitalization, stock split, merger, etc. occurs. In that event, the optionee will be notified of the adjustment, if any.
Granting this option does not imply any right of continued employment by the Company or any subsidiary, and does not affect the right of the employee or the Company (or a subsidiary) to terminate employment at any time.
5. Stock Registration
Shares to be issued upon exercise of this option are currently registered under the Securities Act of 1933, as amended. If such registration is not in effect at the time of exercise, the optionee will be required to represent to the Company that he is acquiring such shares as an investment and not with a view to the sale of those shares.