EXHIBIT 10.16

 

2006 EQUITY PARTICIPATION PLAN

OF

OSI SYSTEMS, INC.

 

STOCK OPTION AGREEMENT No.            

 

THIS STOCK OPTION AGREEMENT (Agreement) is made and entered into as of the
    th day of             ,             , by and between OSI SYSTEMS, INC. (the
Company), a California corporation, and              (Optionee).

 

Pursuant to the 2006 Equity Participation Plan (Plan) of the Company, the Board
of Directors of the Company or a committee to which administration of the Plan
is delegated by the Board of Directors (in either case, the “Administrator”) has
authorized the granting to Optionee of a non-qualified option to purchase the
number of shares of Common Stock of the Company specified in Paragraph 1 hereof,
at the price specified therein, such option to be for the term and upon the
terms and conditions hereafter stated.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the promises and of the undertakings of the
parties hereto contained herein, it is hereby agreed;

 

1. Number of Shares; Option Price.    Pursuant to said action of the
Administrator, the Company hereby grants to Optionee the option (Option) to
purchase, upon and subject to the terms and conditions of the Plan,             
shares of Common Stock of the Company (Shares) at the price of $             per
share.

 

2. Term.    This option shall expire on the day before the             
anniversary of the date hereof (Expiration Date) unless such Option shall have
been terminated prior to that date in accordance with the provisions of the Plan
or this Agreement. The term “Affiliate” as used herein shall have the meaning as
set forth in the Plan.

 

3. Shares Subject to Exercise.    Shares subject to exercise shall vest and
become exercisable in installments on             ,             ,             
and             , so long as Optionee has remained continuously employed or by
or as a consultant of the Company, or its Affiliate, or as a director of the
Company from the date hereof through such dates. All shares shall thereafter
remain subject to exercise for the term specified in Paragraph 2 hereof,
provided that Optionee is then and has continuously been in the employ of the
Company, or its Affiliate, or as a director of the Company, subject, however, to
the provisions of Paragraph 6 hereof.

 

4. Method and Time of Exercise.    The Option may be exercised by written notice
delivered to the Company at its principal executive office stating the number of
shares with respect to which the Option is being exercised, together with:

 

  (A)   a check or money order made payable to the Company in the amount of the
exercise price and any withholding tax, as provided under Paragraph 5 hereof; or

 

  (B)   if expressly authorized in writing by the Administrator, in its sole
discretion, at the time of the Option exercise, the tender to the Company of
shares of the Company’s Common Stock owned by Optionee having a fair market
value, as determined by the Administrator, not less than the exercise price,
plus the amount of applicable federal, state and local withholding taxes; or

 

  (C)   if expressly authorized in writing by the Administrator, in its sole
discretion, at the time of the Option exercise, the Optionee’s full recourse
promissory note in a form approved by the Company; or

 

  (D)   if any other method such as cashless exercise is expressly authorized in
writing by the Administrator, in its sole discretion, at the time of the Option
exercise, the tender of such consideration having a fair market value, as
determined by the Administrator, not less than the exercise price, plus the
amount of applicable federal, state and local withholding taxes.

--------------------------------------------------------------------------------

Not less than 100 shares may be purchased at any one time unless the number
purchased is the total number purchasable under such Option at the time. Only
whole shares may be purchased.

 

5. Tax Withholding.    As a condition to exercise of the Option, the Company may
require Optionee to pay over to the Company all applicable federal, state and
local taxes which the Company is required to withhold with respect to the award
or exercise of this Option. At the discretion of the Administrator and upon the
request of Optionee, the minimum statutory withholding tax requirements may be
satisfied by the withholding of shares of Common Stock of the Company otherwise
issuable to Optionee upon the exercise of this Option.

 

6. Exercise on Termination of Employment.    If for any reason other than death
or permanent and total disability, Optionee ceases to be employed by the Company
or any of its Affiliates (such event being called a “Termination”), this Option
(to the extent then exercisable) may be exercised in whole or in part at any
time within three months of the date of such Termination but in no event after
the Expiration Date; provided, however, that if such exercise of this Option
would result in liability for Optionee under Section 16(b) of the Securities
Exchange Act of 1934, then such three-month period automatically shall be
extended until the tenth day following the last date upon which Optionee has any
liability under Section 16(b), but in no event after the Expiration Date. If
Optionee dies or becomes permanently and totally disabled (as defined in the
Plan) while employed by the Company or an Affiliate or within the period that
this Option remains exercisable after Termination, this Option (to the extent
then exercisable) may be exercised, in whole or in part, by Optionee, by
Optionee’s personal representative or by the person to whom this Option is
transferred by devise or the laws of descent and distribution, at any time
within six months after the death or six months after the permanent and total
disability of Optionee, but in no event after the Expiration Date. For purposes
of this Paragraph 6, Optionee’s employment shall not be deemed to terminate by
reason of sick leave, military leave or other leave of absence approved by the
Administrator, if the period of any such leave does not exceed 90 days or, if
longer, if Optionee’s right to reemployment by the Company or any Affiliate is
guaranteed either contractually or by statute.

 

7. Nontransferability.    This Option may not be assigned or transferred except
by will or by the laws of descent and distribution, and may be exercised only by
Optionee during his lifetime and after his death, by his personal representative
or by the person entitled thereto under his will or the laws of intestate
succession.

 

8. Optionee Not a Shareholder.    Optionee shall have no rights as a shareholder
with respect to the Common Stock of the Company covered by this Option until the
date of issuance of Shares to him upon exercise of this Option. No adjustment
will be made for dividends or other rights for which the record date is prior to
the date such Shares are issued.

 

9. No Right to Employment.    If Optionee is an employee or consultant of the
Company or any of its Affiliates, nothing in this agreement shall interfere with
or limit in any way the right of the Company or of any of its Affiliates to
terminate Optionee’s employment or consulting at any time, nor confer upon
Optionee any right to continue in the employ of, or consult with, the Company or
any of its Affiliates.

 

10. Modification and Termination.    The rights of Optionee are subject to
modification and termination in certain events as provided in Sections 6.1 and
6.2 of the Plan or as otherwise provided in the Plan.

 

11. Restrictions on Sale of Share.    Optionee represents and agrees that, upon
his exercise of this Option, in whole or in part, unless there is in effect at
that time under the Securities Act of 1933 a registration statement relating to
the Shares issued to him, he will acquire the Shares issuable upon exercise of
this Option for the purpose of investment and not with a view to their resale or
further distribution, and that upon each exercise thereof he shall furnish to
the Company a written statement to such effect, satisfactory to the Company in
form and substance. Optionee agrees that any certificates issued upon exercise
of this Option may bear a legend indicating that their transferability is
restricted in accordance with applicable state or federal securities law. Any
person or persons entitled to exercise this Option under the provisions of
Paragraphs 5 and 6 hereof shall, upon

 

2

--------------------------------------------------------------------------------

each exercise of this Option under circumstances in which Optionee would be
required to furnish such a written statement, also furnish to the Company a
written statement to the same effect, satisfactory to the Company in form and
substance.

 

12. Plan Governs.    This Agreement and the Option evidenced hereby are made and
granted pursuant to the Plan and are in all respects limited by and subject to
the express terms and provisions of the Plan, as it may be construed by the
Administrator. Optionee hereby acknowledges receipt of a copy of the Plan.

 

13. Notices.    All notices to the Company shall be addressed to the Chief
Financial Officer at the principal executive office of the Company at 12525
Chadron Avenue, Hawthorne, California 90250, and all notices to Optionee shall
be addressed to Optionee at the address of Optionee on file with the Company or
its Affiliate, or to such other address as either may designate to the other in
writing. A notice shall be deemed to be duly given if and when enclosed in a
properly addressed sealed envelope deposited, postage prepaid, with the United
States Postal Service. In lieu of giving notice by mail as aforesaid, written
notices under this Agreement may be given by personal delivery to Optionee or
the Chief Financial Officer (as the case may be).

 

14. Sale or Other Disposition.    Optionee hereby agrees that the Company may
request that before Optionee disposes (whether by sale, exchange, gift, or
otherwise) of any Shares acquired by exercise of this Option that Optionee
promptly notify the Company in writing of the date and terms of the proposed
disposition and shall provide such other information regarding the Option as the
Company may reasonably require immediately before such disposition. Said written
notice shall state the date of such proposed disposition, and the type and
amount of the consideration to be received for such Share or Shares by Optionee
in connection therewith. In the event of any such disposition, the Company shall
have the right to require Optionee to immediately pay the Company the amount of
taxes (if any) which the Company is required to withhold under federal and/or
state law as a result of the granting or exercise of the Option and the
disposition of the Shares.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.

 

OSI SYSTEMS, INC.

 

By

 

 

Name:

 

Title:

 

OPTIONEE

 

Name:

 

 

3