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Exhibit (a)(1)(J)(vi)

RULES

OF

THE MERCURY INTERACTIVE CORPORATION 2001

INLAND REVENUE APPROVED SUB-PLAN FOR

UNITED KINGDOM EMPLOYEES

Adopted by the Company on:

Approved by the Inland Revenue on:

Inland Revenue reference no: X22075/PAM

PricewaterhouseCoopers
Harman House, 1 George Street,
Uxbridge, Middlesex UB8 1QQ

Tel: 01895 275061
Fax: 01895 274777
Ref: AM/CAM/5061


SCHEDULE

RULES OF THE MERCURY INTERACTIVE CORPORATION 2001
INLAND REVENUE APPROVED SUB-PLAN FOR
UNITED KINGDOM EMPLOYEES

1.     General

2.     Establishment of Sub-Plan

3.     Purpose of Sub-Plan

4.     Inland Revenue approval of Sub-Plan

5.     Rules of Sub-Plan

6.     Relationship of Sub-Plan to Plan

7.     Interpretation

Acquiring Company   a company which obtains Control of the Company in the circumstances referred to in rule 25;

Approval Date

 

the date on which the Sub-Plan is approved by the Inland Revenue under Schedule 9 to ICTA 1988;

Associated Company

 

the meaning given to that expression by section 187(2) of ICTA 1988;(2)
             

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Close Company

 

the meaning given to that expression by section 414(1) of, and paragraph 8 of Schedule 9 to, ICTA 1988;(3)

Consortium

 

the meaning given to that word by section 187(7) of ICTA 1988;(4)

Control

 

the meaning given to that word by section 840 of ICTA 1988 and "Controlled" shall be construed accordingly;(5)

Date of Grant

 

the date on which an Option is granted to an Eligible Employee determined in accordance with section 14 of the Plan;

Eligible Employee

 

an individual who falls within section 5(a) of the Plan and who is at the Date of Grant an employee of the Company or a company participating in the Sub-Plan and who, does not have at the Date of Grant of an Option, and has not had during the preceding twelve months, a Material Interest in a Close Company which is the Company or a company which has Control of the Company or a member of a Consortium which owns the Company;

ICTA 1988

 

the Income and Corporation Taxes Act 1988;

Inland Revenue

 

the UK Board of Inland Revenue;

Market Value

 

notwithstanding section 8(b) of the Plan,

 

 

(a)

 

in the case of an Option granted under the Sub Plan:

 

 

 

 

(i)

 

if at the relevant time the Shares are listed on the London or New York Stock Exchange(6) the closing price of a Share on the London or New York Stock Exchange as reported in the Financial Times or Wall Street Journal respectively for the Date of Grant of the Option;

 

 

 

 

(ii)

 

if paragraph (i) does not apply, the market value of a Share as determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992(7) and agreed in advance with the Inland Revenue Shares Valuation Division on the Date of Grant of the Option or such earlier date or dates (not being more than thirty days before the Date of Grant) as may be agreed with the Inland Revenue;

 

 

(b)

 

in the case of an option granted under any other share option scheme, the market value of an ordinary share in the capital of the Company determined under the rules of such scheme for the purpose of the grant of the option;

Material Interest

 

the meaning given to that expression by section 187(3) of ICTA 1988;(7)

New Option

 

an option granted by way of exchange under rule 25.1;
             

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New Shares

 

the shares subject to a New Option referred to in rule 25.1;

Option

 

a subsisting right to acquire Shares granted under the Sub-Plan;

Optionee

 

an individual who holds an Option or, where the context permits, his legal personal representatives; and

Ordinary Share Capital

 

the meaning given to that expression by section 832(1) of ICTA 1988.

 

 

In this schedule, unless the context otherwise requires:

 

 

 

 

where a term is defined in the Sub-Plan, the definition given in the Sub-Plan prevails over the definition given in the Plan;

 

 

 

 

words and expressions not defined above have the same meanings as are given to them in the Plan;

 

 

 

 

the rule headings are inserted for ease of reference only and do not affect their interpretation;

 

 

 

 

a reference to a rule is a reference to a rule in this schedule;

 

 

 

 

the singular includes the plural and vice-versa and the masculine includes the feminine; and

 

 

 

 

a reference to a statutory provision is a reference to a United Kingdom statutory provision and includes any statutory modification, amendment or re-enactment thereof.

8.     Companies participating in Sub-Plan

9.     Shares used in Sub-Plan

10.   Grant of Options

11.   Identification of Options

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12.   Contents of Option Agreement

13.   Earliest date for grant of Options

14.   Persons to whom Options may be granted

15.   Options non transferable

16.   Limit on number of Shares placed under Option under Sub-Plan

17.   Inland Revenue limit (£30,000)

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18.   Exercise price under Options

19.   Performance target or other condition imposed on exercise of an Option


20.   Latest date for exercise of Options

21.   Material Interest

22.   Manner of payment for Shares on exercise of Options

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23.   Issue or transfer of Shares on exercise of Options

24.   Death of Optionee

24.1
Notwithstanding Section 9(d) of the Plan, no Option may be exercised more than 12 months after the date of death of the Optionee.

25.   Change in Control of Company

25.1 Exchange of Options

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25.2 Period allowed for exchange of Options

25.3 Meaning of "equivalent"

25.4 Date of grant of New Option

25.5 Application of Sub-Plan to New Option

25.6 Disapplication of section 12(c) of the Plan

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26.   Rights attaching to Shares issued on exercise of Options

27.   Amendment of Sub-Plan

28.   Adjustment of Options

29.   Exercise of discretion by Administrator

30.   Disapplication of certain provisions of Plan

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Notes

(1)
The Company is the "grantor" as defined in paragraph 1 of Schedule 9 to ICTA 1988 because it has established the Sub-Plan. In most cases, it will also be the Company which grants options under the Sub-Plan, although this is not a requirement of UK tax legislation.

(2)
A company is treated as another's "associated company" at a given time if, at that time or at any other time within one year previously, one of the two has control of the other, or both are under the control of the same person or persons. A person is taken to have control of a company if he exercises, or is able to exercise or is entitled to acquire, direct or indirect control over the company's affairs and, in particular, if he possesses or is entitled to acquire the greater part of the company's issued share capital or the voting power in the company. UK tax legislation contains two definitions of control: the definition of control here is different from that in paragraph 5 below.

(3)
A close company is a company which is under the control (as defined in paragraph 1 above) of five or fewer participators (eg shareholders) or of any number of participators who are directors. There are attributed to a participator all the rights and powers (eg shares, voting power) of, inter alia, a company which he controls or of an "associate" (eg relative) of his. Ordinarily, a company is excluded from being a close company if it is non UK resident or 35% of the voting power in the company is held by the public and its shares have been listed, and the subject of dealings, on a recognised stock exchange within the preceding 12 months. However, for the purpose of the material interest test (see paragraph 8 below), this exclusion does not apply with the result that the normal definition of a "close company" is extended.

(4)
A company is a member of a consortium owning another company if it is one of a number of companies which between them beneficially own not less than three-quarters of the other company's ordinary share capital and each of which beneficially owns not less than one-twentieth of that capital.

(5)
Control means the power of a person to secure:

(a)
by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate; or

(b)
by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate
(6)
The expression "recognised stock exchange" is defined in section 841 of ICTA 1988. "Recognised stock exchange" means the London Stock Exchange Limited and any stock exchange outside the UK which has been designated by the Inland Revenue as a recognised stock exchange. This includes, inter alia, the New York Stock Exchange, NASDAQ and any exchange registered with the US Securities and Exchange Commission as a national securities exchange. However, clearance is required from the Shares Valuation Division before the NASDAQ price may be used to determine the market price of a NASDAQ listed share.

(7)
Market value in this context means the price which the shares used in the scheme might reasonably be expected to fetch on a sale in the open market (section 272 Taxation of Chargeable Gains Act 1992 ("TCGA 1992"). In making this determination, it is assumed that there is available to any prospective purchaser of the shares all the information which a

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(8)
A person has a material interest in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates:

(a)
is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 10 per cent of the ordinary share capital of the company; or

(b)
where the company is a close company, possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 10 per cent of the assets which would then be available for distribution among the participators.

(9)
The shares used in the scheme must be:

(a)
ordinary shares;

(b)
fully paid up;

(c)
not redeemable; and

(d)
save for certain limited exceptions, not subject to any restrictions which do not apply to all shares of the same class.

(10)
UK tax legislation imposes a limit (currently £30,000) on the "value" of the outstanding options which may be held by an individual participant in an Inland Revenue approved executive share option scheme. The £30,000 limit is calculated by reference to the market value of the shares at the date of grant of the relevant option and is not recalculated for any changes in the share value during the life of the option. When an option is exercised, the shares in respect of which the option is exercised drop out of the account for the purpose of the £30,000 limit, thus creating scope for the grant of an option over further shares to the same individual.

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