INVERNESS MEDICAL INNOVATIONS, INC. 2001 STOCK OPTION AND INCENTIVE PLAN NON- QUALIFIED STOCK OPTION AGREEMENT FOR U.S. EXECUTIVES
Exhibit 10.31
INVERNESS MEDICAL INNOVATIONS, INC.
2001 STOCK OPTION AND INCENTIVE PLAN
2001 STOCK OPTION AND INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR U.S. EXECUTIVES
FOR U.S. EXECUTIVES
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR U.S. EMPLOYEES
FOR U.S. EMPLOYEES
UNDER THE
INVERNESS MEDICAL INNOVATIONS, INC.
2001 STOCK OPTION AND INCENTIVE PLAN
2001 STOCK OPTION AND INCENTIVE PLAN
Name of Optionee: |
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Number of Option Shares:
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Option Exercise Price Per Share: |
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Grant Date: |
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Expiration Date: |
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Pursuant to the Inverness Medical Innovations, Inc. 2001 Stock Option and Incentive Plan (the
“Plan”) as amended through the date hereof, Inverness Medical Innovations, Inc. (the “Company”)
hereby grants to the Optionee named above an option (the “Stock Option”) to purchase, on or prior
to the Expiration Date specified above, all or part of the number of Option Shares of Common Stock,
par value $0.001 per share (the “Stock”) of the Company specified above at the Option Exercise
Price per Share specified above subject to the terms and conditions set forth herein (the
“Agreement”) and in the Plan.
1. Exercisability Schedule. No portion of this Stock Option may be exercised until
such portion shall have become exercisable. Except as set forth below, and subject to the
discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the
exercisability schedule hereunder, this Stock Option shall become exercisable with respect to the
following number of Option Shares on the dates indicated, so long as the Optionee remains in
employment with the Company or a Subsidiary (as defined in the Plan) on the Exercisability Date:
| Number of | Total Number of | |||
| Exercisability | Option Shares First | Option Shares | ||
| Date | Becoming Exercisable | Exercisable | ||
| (25%) | (25%) | |||
| (25%) | (50%) | |||
| (25%) | (75%) | |||
| (25%) | (100%) |
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Once exercisable, this Stock Option shall continue to be exercisable at any time or times
prior to the close of business on the Expiration Date, subject to the provisions of this Agreement
and the Plan.
2. Manner of Exercise
(a) The Optionee may exercise this Stock Option only in the following manners: from time to
time, on or prior to the Expiration Date of this Stock Option, the Optionee may give notice of his
or her election to purchase some or all of the Option Shares purchasable by means of (i) a written
notice to the Administrator or (ii) an electronic notice to the Administrator or other authorized
representative of the Company (including a third-party administrator or broker designated by the
Company). Whether written or electronic, such notice shall specify the number of Option Shares to
be purchased and shall be in a form approved by the Administrator.
Payment of the Option Exercise Price for the Option Shares may be made by one or more of the
following methods: (i) in cash, by certified or bank check or other instrument acceptable to the
Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that
have been purchased by the Optionee on the open market or that have been “paid for” and
beneficially owned by the Optionee for at least six months and are not then subject to any
restrictions under any Company plan; (iii) by the Optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions to a broker to promptly deliver to
the Company cash or a check payable and acceptable to the Company to pay the Option Exercise Price,
provided that in the event the Optionee chooses to pay the Option Exercise Price as so provided,
the Optionee and the broker shall comply with such procedures and enter into such agreements of
indemnity and other agreements as the Administrator shall prescribe as a condition of such payment
procedure; or (iv) a combination of (i), (ii), and (iii) above. Payment instruments will be
received subject to collection.
The delivery of certificates representing the Option Shares will be contingent upon the
Company’s receipt from the Optionee of full payment for the Option Shares, as set forth above and
any agreement, statement or other evidence that the Company may require to satisfy itself that the
issuance of Stock to be purchased pursuant to the exercise of Stock Options under the Plan and any
subsequent resale of the shares of Stock will be in compliance with applicable laws and
regulations. In the event the Optionee chooses to pay the Option Exercise Price by
previously-owned shares of Stock through the attestation method, the number of shares of Stock
transferred to the Optionee upon the exercise of the Stock Option shall be net of the Shares
attested to.
(b) Certificates for shares of Stock purchased upon exercise of this Stock Option shall be
issued and delivered to the Optionee upon compliance to the satisfaction of the Administrator with
all requirements under applicable laws or regulations in connection with such issuance and with the
requirements of this Agreement and of the Plan. The determination of the Administrator as to such
compliance shall be final and binding on the Optionee. The Optionee shall not be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to
this Stock Option unless and until this Stock Option shall have been exercised pursuant to the
terms of this Agreement, the Company shall have issued and
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delivered the shares to the Optionee, and the Optionee’s name shall have been entered as the
stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such shares of Stock.
(c) The minimum number of shares with respect to which this Stock Option may be exercised at
any one time shall be 10 shares, unless the number of shares with respect to which this Stock
Option is being exercised is the total number of shares subject to exercise under this Stock Option
at the time.
(d) Notwithstanding any other provision of this Agreement or of the Plan, no portion of this
Stock Option shall be exercisable after the Expiration Date.
3. Termination of Employment. If the Optionee’s employment by the Company or a
Subsidiary is terminated, no additional Option Shares shall become exercisable following the date
of termination and the period within which to exercise the exercisable portion of the Stock Option
may be subject to earlier termination as set forth below.
(a) Termination Due to Death. If the Optionee’s employment terminates by reason of
death, any Stock Option held by the Optionee shall become fully exercisable and may thereafter be
exercised by the Optionee’s legal representative or legatee for a period of twelve months from the
date of death or until the Expiration Date, if earlier.
(b) Termination Due to Disability. If the Optionee’s employment terminates by reason
of disability (as determined by the Administrator), any Stock Option held by the Optionee shall
become fully exercisable and may thereafter be exercised by the Optionee for a period of twelve
months from the date of termination or until the Expiration Date, if earlier. The death of the
Optionee during the twelve-month period provided in this Section 3(b) shall extend such period for
another twelve months from the date of death or until the Expiration Date, if earlier.
(c) Termination for Cause. If the Optionee’s employment terminates for Cause, any
Stock Option held by the Optionee shall terminate immediately and be of no further force and
effect. For purposes of this Agreement, “Cause” shall mean: (i) any material breach by the
Optionee of any agreement between the Optionee and the Company or a Subsidiary; (ii) the conviction
of or a plea of nolo contendere by the Optionee to a felony or a crime involving moral turpitude;
or (iii) any material misconduct or willful and deliberate non-performance (other than by reason of
disability) by the Optionee of the Optionee’s duties to the Company or a Subsidiary. If it is
discovered that an Optionee’s employment could have been terminated for Cause but such information
was not known by the Company, the date of termination of employment shall be deemed to be the date
on which the act constituting Cause took place. In the event that an Optionee has exercised a
Stock Option after he or she has committed an act constituting Cause, the Administrator may take
action to recover the Option Shares and any gains made by the Optionee in respect of such Option
Shares.
(d) Other Termination. If the Optionee’s employment terminates for any reason other
than death, disability or Cause, and unless otherwise determined by the Administrator, any Stock
Option held by the Optionee may be exercised, to the extent
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exercisable on the date of termination, for a period of three months from the date of
termination or until the Expiration Date, if earlier; provided that if the Optionee’s
employment terminates by reason of voluntary retirement (as determined by the Administrator) after
the age of 58 then Stock Options exercisable on the date of termination may be exercised for a
period of twelve months from the date of termination or until the Expiration Date, if earlier. Any
Stock Option that is not exercisable at such time shall terminate immediately and be of no further
force or effect.
The Administrator’s determination of the reason for termination of the Optionee’s employment
shall be conclusive and binding on the Optionee and his or her representatives or legatees.
The applicable period of post-service exercisability in effect pursuant to the foregoing
provisions of this Section 3 shall automatically be extended by an additional period of time equal
in duration to any interval within such post-service exercise period during which the exercise of
this Stock Option cannot be effected solely because of the condition set forth in Section 5 below,
but in no event shall such an extension result in the continuation of this Stock Option beyond the
Expiration Date.
4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Stock
Option shall be subject to and governed by all the terms and conditions of the Plan. Capitalized
terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is
specified herein.
5. Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, the Stock Option may not be exercised unless the shares of Stock issuable upon exercise of
the Stock Option are then registered under the United States Securities Act of 1933, as amended
(the “Act”) or, if such shares are not then registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the Act.
6. Transferability. This Agreement is personal to the Optionee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution. This Stock Option is exercisable, during the Optionee’s lifetime,
only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.
Notwithstanding the foregoing, to the extent that any portion of this Stock Option exceeds the
$100,000 limitation described in Section 422(d) of the Internal Revenue Code of 1986, as amended
(the “Code”), such portion shall be deemed a non-qualified Stock Option and may be transferred,
upon approval of the Administrator following submission of a petition for such transfer from the
Optionee to the Administrator and the written agreement of the proposed transferee to be bound by
the terms of the Plan and this Agreement, to the Optionee’s spouse, children (natural or adopted)
or stepchildren, a trust for the sole benefit of one or more such family members of which the
Optionee is the settlor, or a family limited partnership or family limited liability company of
which the limited partners or members, as the case may be, consist solely of one or more such
family members.
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7. Tax Withholding.
(a) Regardless of any action the Company or the Optionee’s employer (the “Employer”) takes
with respect to any or all income tax (including federal, state or local tax), social insurance
contributions, payroll tax, payment on account or other tax-related withholding (“Tax-Related
Items”), the Optionee acknowledges that the ultimate liability for all Tax-Related Items legally
due by him or her is and remains the Optionee’s responsibility and that the Company and/or the
Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of the Stock Option, including, but not limited to, the grant,
vesting or exercise of the Stock Option, the issuance of the shares of Stock subject to the Stock
Option, the subsequent sale of shares of Stock thus issued and the receipt of any dividends; and
(2) do not commit to and are under no obligation to structure the terms of the grant or any aspect
of the Stock Option to reduce or eliminate the Optionee’s liability for Tax-Related Items.
Further, if the Optionee has become subject to tax in more than one jurisdiction between the date
of grant and the date of any relevant taxable event, the Optionee acknowledges that the Company
and/or the Employer (or former employer, as applicable) may be required to withhold or account for
Tax-Related Items in more than one jurisdiction.
(b) The Optionee shall, not later than the date of the taxable event under applicable law, pay
to the Company or make arrangements satisfactory to the Administrator to satisfy any Tax-Related
Items on account of such taxable event. The Optionee authorizes the Company and/or the Employer,
at their discretion, to satisfy the obligations with respect to all Tax-Related Items legally
payable by the Optionee by one or a combination of the following means: (i) withholding from shares
of Stock to be issued, provided that the Company only withholds the number of shares of Stock
necessary to satisfy the minimum statutory withholding obligation, or such other amount as may be
necessary to avoid adverse accounting treatment; (ii) withholding from the Optionee’s wages or
other cash compensation paid to the Optionee by the Company and/or the Employer; (iii) arranging
for the sale of shares of Stock issued upon exercise of the Stock Option (on the Optionee’s behalf
and at the Optionee’s direction pursuant to this authorization); or (iv) withholding from the
proceeds of the sale of shares of Stock issued upon exercise of the Stock Option. If the
obligation for Tax-Related Items is satisfied by withholding from shares of Stock to be issued, the
Optionee is deemed to have been issued the full number of shares of Stock subject to the Stock
Option, notwithstanding that a number of the shares of Stock are held back solely to satisfy the
Tax-Related Items due as a result of any aspect of the Stock Option.
(c) The Optionee shall pay to the Company or the Employer any amount of Tax-Related Items that
the Company or the Employer may be required to withhold as a result of the Optionee’s participation
in the Plan to the extent that such amount cannot be satisfied by the means set forth above in
subsection (b). The Company may refuse to deliver the shares of Stock if Optionee fails to comply
with his or her obligations in connection with the Tax-Related Items.
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8. Miscellaneous.
(a) Notice hereunder shall be given to the Company at its principal place of business, and
shall be given to the Optionee at the address set forth below, or in either case at such other
address as one party may subsequently furnish to the other party in writing.
(b) This Stock Option and the Optionee’s participation in the Plan do not confer upon the
Optionee any rights with respect to continuance of employment by the Employer, the Company or any
Subsidiary, and shall not interfere with the ability of the Employer to terminate the Optionee’s
employment relationship at any time.
(c) This Stock Option is not intended to be an incentive stock option as defined in Section
422 of Code.
9. Code Section 409A. It is the intent that the grant, vesting and exercise of this
Stock Option shall be exempt from the requirements of Section 409A of the Code, and any ambiguities
herein will be interpreted to so comply. The Company reserves the right, to the extent the Company
deems necessary or advisable in its sole discretion, to unilaterally amend or modify this Agreement
as may be necessary to ensure that this Stock Option qualifies for the exemption from, or complies
with the requirements of, Section 409A of the Code; provided, however, that the Company makes no
representation that this Stock Option will be exempt from or will comply with Section 409A of the
Code, and makes no undertaking to preclude Section 409A of the Code from applying to this Stock
Option or to ensure that it complies with Section 409A of the Code.
10. No Advice Regarding Grant. The Company is not providing any tax, legal or
financial advice, nor is the Company making any recommendations regarding the Optionee’s
participation in the Plan, or the acquisition or sale of the underlying shares of Stock. The
Optionee is hereby advised to consult with his or her own personal tax, legal and financial
advisors regarding his or her participation in the Plan before taking any action related to the
Plan.
11. Electronic Delivery and Acceptance. The Company may, in its sole discretion,
decide to deliver any documents related to the Stock Option or future options granted under the
Plan by electronic means or request the Optionee’s consent to participate in the Plan by electronic
means. The Optionee hereby consents to receive such documents by electronic delivery and agrees to
participate in the Plan through an on-line or electronic system established and maintained by the
Company or a third party designated by the Company.
12. Severability. The provisions of this Agreement are severable and if any one or
more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the
remaining provisions shall nevertheless be binding and enforceable.
13. Imposition of Other Requirements. The Company reserves the right to impose other
requirements on the Stock Option and any shares of Stock acquired under the Plan, to the extent the
Company determines it is necessary or advisable in order to comply with local law or facilitate the
administration of the Plan, and to require the Optionee to sign any additional agreements or
undertakings that may be necessary to accomplish the foregoing.
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14. Governing Law and Venue.
(a) The Stock Option granted hereunder and the provisions of this Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware, applied without regard to
conflict of law principles, as provided in Section 18 of the Plan.
(b) For purposes of litigating any dispute that may arise from the Stock Option granted
hereunder or this Agreement, the parties hereby submit and consent to the jurisdiction of the
Commonwealth of Massachusetts, and agree that any such litigation shall be conducted only in the
courts of Middlesex County, Massachusetts, or the federal courts for the United States for the
District of Massachusetts, where this Agreement is made and/or to be performed.
| For: | INVERNESS MEDICAL INNOVATIONS, INC. |
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| By: | ||||||
The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by
the undersigned.
| Optionee’s name and address: | ||||
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