EXHIBIT 10.6

For Executive Management/Directors

2002 NONQUALIFIED STOCK INCENTIVE PLAN OF BIOSITE INCORPORATED

NONSTATUTORY STOCK OPTION AGREEMENT

FOR EXECUTIVE MANAGEMENT AND DIRECTORS

 

 

NONSTATUTORY STOCK OPTION

This option is not intended to be an incentive stock option under section 422 of
the Internal Revenue Code (the “Code”).

 

 

VESTING

Except as provided below, your right to exercise this option shall commence on
the Vesting Start Date, as shown on the cover sheet, subject to the following:
(i) with respect to each three-month period following your Vesting Start Date
during which you are regularly scheduled to provide Service for 40 or more hours
per week for the entire three-month period, then one-sixteenth (1/16) of the
shares subject to your option will vest and become exercisable at the end of
such period, (ii) with respect to each three-month period of Service following
your Vesting Start Date for which you are regularly scheduled to provide Service
30 or more hours per week, but less than 40 hours per week for all or any
portion of such period, then one thirty-second (1/32) of the shares subject to
your option will vest and become exercisable at the end of such period, and
(iii) notwithstanding (ii) above, with respect to each three-month period of
Service following your Vesting Start Date for which you are regularly scheduled
to provide Service for less then 30 hours per week for all or any portion of
such period, then none of the shares subject to your option will vest and become
exercisable at the end of such period.The Company, in its sole discretion, shall
make any determinations regarding the number of hours you are regularly
scheduled to provide Service per week.; provided, however, that the foregoing
Service crediting rules shall not apply to any options granted to the founders
of the Company, as determined by the Company in its sole discretion. The
Company, in its sole discretion, shall make any determinations regarding the
number of hours you are regularly scheduled to provide Service per week.

 

 

 

Notwithstanding the foregoing, no part of this option is exercisable until you
have completed six consecutive months of Service. “Service” means your service
as an employee, director, consultant or advisor of the Company or any affiliated
company.

 

 

 

No additional shares become exercisable after your Service has terminated for
any reason.

 

 

 

In determining the number of vested shares for issuance under the Plan, any
fractional shares shall be rounded to the nearest whole number.

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TERM

Your option will expire in any event at the close of business at Company
headquarters on the day before the 10th anniversary of the Date of Option Grant,
as shown on the cover sheet. (It will expire earlier if your Service terminates,
as described below.)

 

 

REGULAR TERMINATION

Except as provided in the “Extension of Exercise Period” section below, If your
Service terminates for any reason except death or total and permanent
disability, then your option will expire at the close of business at Company
headquarters on the 90th day after your termination date.

 

 

 

The Company determines when your service terminates for this purpose.

 

 

DEATH

Except as provided in the “Extension of Exercise Period” section below, If you
die while still in Service, then your option will expire at the close of
business at Company headquarters on the date 12 months after the date of death.
During that 12 month period, your estate, heirs or designated beneficiary may
exercise the vested portion of your option.

 

 

DISABILITY

Except as provided in the “Extension of Exercise Period” section below, If your
Service terminates because of your total and permanent disability, then your
option will expire at the close of business at Company headquarters on the date
12 months after your termination date. During that 12 month period, you may
exercise the vested portion of your option. “Total and permanent disability”
means that you are unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted, or can be expected to last, for
a continuous period of not less than one year.

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EXTENSION OF EXERCISE PERIOD

If the sale of shares issued upon exercise of your option following the
termination of your Service would violate the Company’s Insider Trading Policy,
your option shall not expire until the earlier of (i) the expiration of a period
equal to the post-termination exercise period described in the applicable
“Regular Termination”, “Death” or “Disability” section above after the
termination of your Service during which you can sell the shares issued upon
exercise of your option without violating the Company’s Insider Trading Policy,
(ii) the 15th day of the third month after the date on which your option would
cease to be exercisable but for this section, or such longer period as would not
cause your option to become subject to Section 409A(a)(1) of the Code or (iii)
the expiration of the term of your option as set forth herein. In addition, if
the exercise of your option following the termination of your Service would be
prohibited at any time solely because the issuance of shares would violate the
registration requirements under the Securities Act of 1933, as amended, then
your option shall terminate on the earlier of (i) the expiration of a period
equal to the post-termination exercise period described in the applicable
“Regular Termination”, “Death” or “Disability” section above after the
termination of your Service during which the exercise of your option would not
be in violation of such registration requirements or (ii) the expiration of the
term of your option as set forth herein.

 

 

LEAVES OF ABSENCE

For purposes of this option, Service does not terminate when you go on a
military leave, a sick leave or another bona fide leave of absence, if the leave
was approved by the Company in writing. Service terminates immediately in any
event when the approved leave ends, unless you immediately return to Service.

 

 

 

For purposes of vesting during your leave of absence, (i) you shall be credited
with up to ninety (90) days of Service or as otherwise may be provided under the
law; and (ii) you shall not receive any credit and your Service shall be
considered suspended for days exceeding such 90-day period or other period
provided under the law.

 

 

RESTRICTIONS ON EXERCISE

The Company will not permit you to exercise this option if the issuance of
shares at that time would violate any law or regulation.

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NOTICE OF EXERCISE

When you wish to exercise this option, you must notify the Company by filing the
proper “Notice of Exercise” form at the address given on the form. Your notice
must specify how many shares you wish to purchase. Your notice must also specify
how your shares should be registered (in your name only or in your and your
spouse’s names as community property or as joint tenants with right of
survivorship). The notice will be effective when it is received by the Company.

 

 

 

If someone else wants to exercise this option after your death, that person must
prove to the Company’s satisfaction that he or she is entitled to do so.

 

 

FORM OF PAYMENT

When you submit your notice of exercise, you must include payment of the option
price for the shares you are purchasing. Payment may be made in one (or a
combination of two or more) of the following forms:

 

 

 

·  Your personal check, a cashier’s check or a money order.

 

 

 

·  Certificates for Company stock that you have owned for at least six months,
along with any forms needed to effect a transfer of the shares to the Company.
The value of the shares, determined as of the effective date of the option
exercise, will be applied to the option price.

 

 

 

·  Irrevocable directions to a securities broker approved by the Company to sell
your option shares and to deliver all or a portion of the sale proceeds to the
Company in payment of the option price. (The balance of the sale proceeds, if
any, will be delivered to you.) The directions must be given by signing a
special “Notice of Exercise” form provided by the Company.

 

 

WITHHOLDING TAXES

You will not be allowed to exercise this option unless you make acceptable
arrangements to pay any withholding taxes that may be due as a result of the
option exercise.

 

 

RESTRICTIONS ON RESALE

By signing this Agreement, you agree not to sell any option shares at a time
when applicable laws or Company policies prohibit a sale. This restriction will
apply as long as you are in the Service of the Company (or a subsidiary).

 

 

TRANSFER OF OPTION

Prior to your death, only you may exercise this option. You cannot transfer or
assign this option. For instance, you may not sell this option or use it as
security for a loan. If you attempt to do any of these things, this option will
immediately become invalid. You may, however, dispose of this option in your
will.

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RETENTION RIGHTS

Your option or this Agreement do not give you the right to be retained by the
Company (or any subsidiaries) in any capacity. The Company (and any
subsidiaries) reserve the right to terminate your service at any time, with or
without cause.

 

 

ADJUSTMENTS

In the event of a stock split, a stock dividend or a similar change in Company
stock, the number of shares covered by this option and the exercise price per
share may be adjusted pursuant to the Plan.

 

 

APPLICABLE LAW

This Agreement will be interpreted and enforced under the laws of the State of
California.

 

 

THE PLAN AND OTHER AGREEMENTS

The text of the Plan is incorporated in this Agreement by reference. This
Agreement and the Plan constitute the entire understanding between you and the
Company regarding this option. Any prior agreements, commitments or negotiations
concerning this option are superseded.

 

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

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