LTX Corporation Nonstatutory Stock Option Agreement Granted Under 2004 Stock Plan
Exhibit 10.16
LTX Corporation
Nonstatutory Stock Option Agreement
Granted Under 2004 Stock Plan
1. Grant of Option.
This agreement evidences the grant by LTX Corporation, a Massachusetts corporation (the “Company”), on , 200 (the “Grant Date”) to , a director of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2004 Stock Plan (the “Plan”), a total of shares (the “Shares”) of common stock, $.05 par value per share, of the Company (“Common Stock”) at $ per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on (the “Final Exercise Date”).
It is intended that the option evidenced by this agreement shall not be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term “Participant”, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.
2. Vesting Schedule.
This option will become exercisable (“vest”) as follows:
| Date |
Percentage |
||||
| , 200 |
20 | % | |||
| , 200 |
35 | % | |||
| , 200 |
45 | % |
The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in writing, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share.
(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, director of, or consultant or advisor to, the Company or any other entity the directors, consultants, or advisors of which are eligible to receive option grants under the Plan (an “Eligible Participant”).
(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided below and in paragraph (d), the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing, (i) in the event that the Participant stands for re-election to the Board of Directors and is not re-elected at any meeting, this option shall become immediately vested and exercisable, and the right to exercise this option shall terminate one year after such meeting and (ii) upon the retirement of the Participant from the Board of Directors, this option shall become immediately vested and exercisable and the right to exercise this option shall terminate two years after such retirement.
(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant, this option shall become immediately vested and exercisable by the Participant (or in the case of death by an authorized transferee) and the right to exercise this option shall terminate two years following the date of death or disability of the Participant.
4. Withholding.
No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.
5. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.
6. Provisions of the Plan.
This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option.
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IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument.
| LTX Corporation | ||||
| Dated: | By: |
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| Name: |
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| Title: |
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PARTICIPANT’S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2004 Stock Plan.
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| Address: |
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