Exhibit 10.2

IDEXX LABORATORIES, INC.

 

2008 INCENTIVE COMPENSATION PLAN

 

IDEXX Laboratories, Inc. (the “Company”), a Delaware corporation, hereby
establishes and adopts the following 2008 Incentive Compensation Plan (the
“Plan”) to provide incentive awards that are intended to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended.

 

1.

PURPOSES OF THE PLAN

 

The purposes of the Plan are to advance the interests of the Company and its
shareholders and assist the Company in attracting and retaining executive
officers of the Company and its Subsidiaries who, because of the extent of their
responsibilities can make significant contributions to the Company’s success by
their ability, industry, loyalty and exceptional services, by providing
incentives and financial rewards to such executive officers.

 

2.

DEFINITIONS

 

 

2.1.

“Award” shall mean the amount of the Incentive Award paid to a Participant
pursuant to the Plan.

 

2.2.

“Board” shall mean the board of directors of the Company.

2.3.       “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.

2.4.       “Committee” shall mean the Compensation Committee of the Board or any
subcommittee thereof formed by the Compensation Committee to act as the
Committee hereunder. For purposes of satisfying the requirements of Section
162(m) of the Code and the regulations thereunder, the Committee is intended to
consist solely of “outside directors” as such term is defined in Section 162(m)
of the Code.

2.5       “Disability” means any physical or mental condition of a Participant
that in the opinion of the Committee renders the Participant incapable of
continuing to be an employee of the Company and its Subsidiaries.

2.6.       “Incentive Award” shall mean an amount equal to 0.75%, in the case of
the Company’s Chief Executive Officer and 0.25%, in the case of each other
Participant, of the Company’s Operating Income for each full calendar year in
the Performance Period (proportionately adjusted for any portion of the
Performance Period that is less than a full calendar year).

2.7.       “Operating Income” shall mean the Company’s consolidated operating
income determined in accordance with generally accepted accounting principles in
the United States and as reported in the Company’s income statement included in
the Company’s Annual Report on Form 10-K filed with the U.S. Securities and
Exchange Commission covering the applicable Performance Period. Operating income
may be adjusted by the Committee to eliminate the effects of differences between
actual foreign currency exchange rates in the applicable Performance Period and
currency exchange rates budgeted for such period, and to eliminate the effects
of discrete items. Discrete items may include, without limitation, acquisition
integration expenses, restructuring charges, acquisition purchase accounting
adjustments, acquisition-related transaction costs, adjustments to finalized
pre-acquisition contingencies, litigation-related expenses and payments, gains
and losses on the disposition of assets, and non-cash write-downs.

2.8.       “Participant” shall mean the Company’s Chief Executive Officer and
each other executive officer of the Company selected by the Committee pursuant
to Section 4.1 to participate in this Plan.

2.9.       “Performance Period” shall mean the Company’s fiscal year or such
other period that the Committee, in its sole discretion, may establish, provided
no Performance Period shall be more than five years in length.

2.10.     “Subsidiary” shall mean any corporation, partnership or other
organization of which the Company owns or controls, directly or indirectly, not
less than 50% of the total combined voting power of all classes of stock or
other equity interests.

 

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3.

ELIGIBILITY AND ADMINISTRATION

 

3.1.       Eligibility. The individuals eligible to participate in the Plan
shall be the Company’s Chief Executive Officer and any other executive officer
of the Company or a Subsidiary selected by the Committee to participate in the
Plan (each, a “Participant”).

3.2.       Administration. (a) The Plan shall be administered by the Committee.
The Committee shall have full power and authority, subject to the provisions of
the Plan and subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board, to:
(i) select the Participants to whom Incentive Awards may from time to time be
granted hereunder; (ii) determine the terms and conditions, not inconsistent
with the provisions of the Plan, of each Incentive Award, including the length
of the Performance Period; (iii) certify the calculation of Operating Income and
the amount of the Incentive Award payable to each Participant in respect of each
Performance Period; (iv) determine the time when Incentive Awards will be paid;
(v) in connection with the determination of the amount of each Award, determine
whether and to what extent the Incentive Award shall be reduced based on such
factors as the Committee deems appropriate in its discretion; (vi) determine
whether payment of Awards may be deferred by Participants; (vii) interpret and
administer the Plan and any instrument or agreement entered into in connection
with the Plan; (viii) correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Incentive Award in the manner and to the extent
that the Committee shall deem desirable to carry it into effect; (ix) establish
such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; and (ix) make any other determination
and take any other action that the Committee deems necessary or desirable for
administration of the Plan.

(b)        Decisions of the Committee shall be final, conclusive and binding on
all persons or entities, including the Company, any Subsidiary, any Participant
and any person claiming any benefit or right under an Incentive Award or under
the Plan.

(c)        To the extent not inconsistent with applicable law or the rules and
regulations of the NASDAQ Stock Market (or such other principal securities
market on which the Company’s securities are listed or qualified for trading),
including the applicable provisions of Section 162(m) of the Code, the Committee
may delegate to one or more officers of the Company or a committee of officers
the authority to take actions on its behalf pursuant to the Plan.

 

4.

INCENTIVE AWARDS

 

4.1.       Performance Period; Participants. Not later than the earlier of (i)
90 days after the commencement of each fiscal year of the Company and (ii) the
expiration of 25% of the Performance Period, the Committee shall, in writing,
designate one or more Performance Periods, specify any adjustments to Operating
Income for the Performance Period, and determine the Participants for each
Performance Period.

4.2.       Certification. At such time as it shall determine appropriate
following the conclusion of each Performance Period, the Committee shall
certify, in writing, the amount of the Incentive Award for each Participant for
such Performance Period.

4.3.       Payment of Incentive Awards. The amount of the Incentive Award
actually paid to a Participant shall be determined by the Committee in its sole
discretion based on such factors as it deems appropriate, provided that the
actual Award shall not exceed the Incentive Award with respect to such
Participant. The Award amount determined by the Committee for a Performance
Period shall be paid in cash or, to the extent provided in such plan,
share-based awards under a shareholder-approved stock plan of the Company.
Payment to each Participant shall be made no later than the fifteenth day of the
third month following the end of the fiscal year of the Company in which the
applicable Performance Period ends, unless payment is deferred pursuant to a
plan or arrangement satisfying the requirements of Section 409A of the Code.

4.4.       Commencement or Termination of Employment. Without intending to limit
the generality of Section 4.3 or the date for payment of Incentive Awards stated
therein, if a person becomes a Participant during a Performance Period (whether
through promotion or commencement of employment) or if a person who otherwise
would have been a Participant dies, retires or is Disabled, or if the person’s
employment is otherwise terminated, during a Performance Period (except for
cause, as determined by the Committee in its sole discretion), the Incentive
Award payable to such a Participant may, in the discretion of the Committee, be
reduced, including without limitation a proportionate reduction, based on the
period of actual employment during the applicable Performance Period.

 

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5.

MISCELLANEOUSS

 

5.1.       Amendment and Termination of the Plan. The Board may, from time to
time, alter, amend, suspend or terminate the Plan as it shall deem advisable,
subject to any requirement for shareholder approval imposed by applicable law,
including Section 162(m) of the Code, or by the NASDAQ Stock Market (or such
other principal securities market on which the Company’s securities are listed
or qualified for trading). No amendments to, or termination of, the Plan shall
in any way impair the rights of a Participant under any Incentive Award
previously granted without such Participant’s consent.

5.2.       Section 162(m) of the Code. Unless otherwise determined by the
Committee, the provisions of this Plan shall be administered and interpreted in
accordance with Section 162(m) of the Code to ensure the deductibility by the
Company of the payment of Incentive Awards.

5.3.       Tax Withholding. The Company or a Subsidiary shall have the right to
make all payments or distributions pursuant to the Plan to a Participant, net of
any applicable federal, state and local taxes required to be paid or withheld.
The Company or a Subsidiary shall have the right to withhold from wages, Awards
or other amounts otherwise payable to such Participant such withholding taxes as
may be required by law, or to otherwise require the Participant to pay such
withholding taxes. If the Participant shall fail to make such tax payments as
are required, the Company or a Subsidiary shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to such Participant or to take such other action as may be necessary to
satisfy such withholding obligations.

5.4.       Right of Discharge Reserved; Claims to Incentive Awards. Nothing in
this Plan shall provide any Participant a right to receive any Incentive Award
or payment under the Plan with respect to a Performance Period. Nothing in the
Plan nor the grant of an Incentive Award hereunder shall confer upon any
Participant the right to continue in the employment of the Company or a
Subsidiary or affect any right that the Company or a Subsidiary may have to
terminate the employment of (or to demote or to exclude from future Incentive
Awards under the Plan) any such Participant at any time for any reason. Except
as specifically provided by the Committee, the Company shall not be liable for
the loss of existing or potential profit from an Incentive Award granted in the
event of the termination of employment of any Participant. No Participant shall
have any claim to be granted any Incentive Award under the Plan, and there is no
obligation for uniformity of treatment of Participants under the Plan.

5.5.       Nature of Payments. All Incentive Awards made pursuant to the Plan
are in consideration of services performed or to be performed for the Company or
a Subsidiary, division or business unit of the Company. Any income or gain
realized pursuant to Incentive Awards under the Plan constitute a special
incentive payment to the Participant and shall not be taken into account, to the
extent permissible under applicable law, as compensation for purposes of any of
the employee benefit plans of the Company or a Subsidiary except as may be
determined by the Committee or by the Board or board of directors of the
applicable Subsidiary.

5.6.       Other Plans. Nothing contained in the Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.

5.7.       Severability. If any provision of the Plan shall be held unlawful or
otherwise invalid or unenforceable in whole or in part by a court of competent
jurisdiction, such provision shall (a) be deemed limited to the extent that such
court of competent jurisdiction deems it lawful, valid and/or enforceable and as
so limited shall remain in full force and effect, and (b) not affect any other
provision of the Plan or part thereof, each of which shall remain in full force
and effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or
unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit
from being made or provided under the Plan, and if the making of any payment in
full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the Plan.

5.8.       Construction. As used in the Plan, the words “include” and
“including,” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without
limitation.”

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5.9.       Unfunded Status of the Plan. The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments not yet
made to a Participant by the Company, nothing contained herein shall give any
such Participant any rights that are greater than those of a general creditor of
the Company.

5.10.     Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Delaware, without
reference to principles of conflict of laws that might result in the application
of the laws of another jurisdiction, and shall be construed accordingly.

5.11.     Effective Date of Plan. The Plan shall be effective on the date of the
approval of the Plan by the holders of the then outstanding securities of the
Company entitled to vote generally in the election of directors. The Plan shall
be null and void and of no effect if the foregoing condition is not fulfilled.

5.12.     Captions. The captions in the Plan are for convenience of reference
only, and are not intended to narrow, limit or affect the substance or
interpretation of the provisions contained herein.

 

Adopted by the Board of Directors on February 13, 2008, subject to stockholder
approval.

 

Approved by the stockholders on May 7, 2008.

 

 

 

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