Exhibit 10.2

 

BIOSITE INCORPORATED
AMENDED AND RESTATED
STOCK INCENTIVE PLAN

 

Effective June 23, 2006

 

ARTICLE 1                                   INTRODUCTION.

 

The Plan was adopted by the Board on December 5, 1996, and was approved by the
Company’s stockholders on December 6, 1996. The Plan is effective December 1,
1996. However, Articles 7, 8 and 9 shall not apply prior to the Company’s
initial public offering. On February 27, 1998, the Plan was amended by the Board
to increase the number of shares under the Plan. The Plan was amended again on
March 26, 1999, January 28, 2000, January 19, 2001, April 17, 2002, and March
28, 2003, to increase the number of shares available under the Plan, on
April 20, 1999, to remove provisions permitting the repricing of stock options
at lower exercise prices, on November 7, 2002, to revise provisions as to
limitations on payments under the Plan, and on October 23, 2002, to adopt
provisions applicable to stock options granted to recipients residing in
France.  On April 15, 2004, the Plan was amended by the Compensation Committee
to further increase the number of shares available under the Plan and to revise
certain provisions of the Plan applicable to stock options granted to employees
located in France.  On April 8, 2005, the Plan was subsequently amended by the
Board to increase the number of shares available in the Plan.  The amendment and
restatement of the Plan as set forth herein was approved by the Board on April
6, 2006 and by the Company’s stockholders on June 23, 2006.

 

The purpose of the Plan is to promote the long-term success of the Company and
the creation of stockholder value by (a) encouraging Key Employees to focus on
critical long-range objectives, (b) encouraging the attraction and retention of
Key Employees with exceptional qualifications and (c) linking Key Employees
directly to stockholder interests through increased stock ownership. The Plan
seeks to achieve this purpose by providing for Awards in the form of Restricted
Shares, Stock Units, Options (which may constitute incentive stock options or
nonstatutory stock options) or stock appreciation rights.

 

The Plan shall be governed by, and construed in accordance with, the laws of the
State of California.

 

ARTICLE 2                                   ADMINISTRATION.

 

2.1                                 Committee Composition.   Except as otherwise
specifically provided in this Plan, the Plan shall be administered by the
Committee. Except as provided below, the Committee shall consist exclusively of
directors of the Company, who shall be appointed by the Board. In addition, the
composition of the Committee shall satisfy:

 

(a)  Such requirements, if any, as the Securities and Exchange Commission may
establish for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and

 

(b)  Such requirements as the Internal Revenue Service may establish for outside
directors acting under plans intended to qualify for exemption under
section 162(m)(4)(C) of the Code.

 

The Board may act on its own behalf with respect to Outside Directors and may
also appoint one or more separate committees composed of one or more officers of
the Company who need not be directors of the Company and who need not satisfy
the foregoing requirements, who may administer the Plan with respect to Key
Employees who are not “covered employees” under section 162(m)(3) of the Code
and who are not required to report pursuant to § 16(a) of the Exchange Act.

 

2.2                                 Committee Responsibilities.   The Committee
shall (a) select the Key Employees who are to receive Awards under the Plan,
(b) determine the type, number, vesting requirements and other features and
conditions of such Awards, (c) interpret the Plan and (d) make all other
decisions relating to the operation of the Plan. The

 

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Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan. The Committee’s determinations under the Plan shall be final
and binding on all persons.

 

2.3                                 Cancellation and Re-Grant of Awards. 
Notwithstanding anything to the contrary in the Plan, neither the Board nor the
Committee shall have the authority to: (a) reprice any outstanding Awards under
the Plan, (b) cancel and re-grant any outstanding Awards under the Plan, or (c)
effect any other action that is treated as a repricing under generally accepted
accounting principles unless, in each case, the stockholders of the Company have
approved such an action within twelve (12) months prior to such an event.

 

ARTICLE 3                                   SHARES AVAILABLE FOR GRANTS.

 

3.1                                 Basic Limitation.    Common Shares issued
pursuant to the Plan may be authorized but unissued shares or treasury shares.
The aggregate number of Common Shares available for Restricted Shares, Stock
Units, Options and SARs awarded under the Plan shall not exceed Seven Million
(7,000,000).  Of the Common Shares available hereunder, no more than 20% in
aggregate shall be available with respect to Outside Directors. The limitation
of this Section 3.1 shall be subject to adjustment pursuant to Article 10. The
number of Common Shares available under this Plan shall be increased by
unexercised or forfeited Common Shares under the Company’s 1989 Stock Plan.

 

3.2                                 Additional Shares.    If Stock Units,
Options or SARs are forfeited or if Options or SARs terminate for any other
reason before being exercised, then the corresponding Common Shares shall again
become available for Awards under the Plan. If Restricted Shares are forfeited
before any dividends have been paid with respect to such Shares, then such
Shares shall again become available for Awards under the Plan. If Stock Units
are settled, then only the number of Common Shares (if any) actually issued in
settlement of such Stock Units shall reduce the number available under
Section 3.1 and the balance shall again become available for Awards under the
Plan. If SARs are exercised, then only the number of Common Shares (if any)
actually issued in settlement of such SARs shall reduce the number available
under Section 3.1 and the balance shall again become available for Awards under
the Plan.

 

3.3                                 Dividend Equivalents.    Any dividend
equivalents distributed under the Plan shall not be applied against the number
of Restricted Shares, Stock Units, Options or SARs available for Awards, whether
or not such dividend equivalents are converted into Stock Units.

 

ARTICLE 4                                   ELIGIBILITY.

 

4.1                                 General Rules.    Only Key Employees
(including, without limitation, independent contractors who are not members of
the Board) shall be eligible for designation as Participants by the Committee.

 

4.2                                 Outside Directors.    The Committee may
provide that the NSOs that otherwise would be granted to an Outside Director
under this Plan shall instead be granted to an affiliate of such Outside
Director. Such affiliate shall then be deemed to be an Outside Director for
purposes of the Plan, provided that the service-related vesting and termination
provisions pertaining to the NSOs shall be applied with regard to the service of
the Outside Director.

 

4.3                                 Incentive Stock Options.    Only Key
Employees who are common-law employees of the Company, a Parent or a Subsidiary
shall be eligible for the grant of ISOs. In addition, a Key Employee who owns
more than 10% of the total combined voting power of all classes of outstanding
stock of the Company or any of its Parents or Subsidiaries shall not be eligible
for the grant of an ISO unless the requirements set forth in section 422(c)(6)
of the Code are satisfied.

 

ARTICLE 5                                   OPTIONS.

 

5.1                                 Stock Option Agreement.    Each grant of an
Option under the Plan shall be evidenced by a Stock Option Agreement between the
Optionee and the Company. Such Option shall be subject to all applicable terms
of the Plan (including any addendum hereto) and may be subject to any other
terms that are not inconsistent with the Plan. The

 

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Stock Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a cash payment
or in consideration of a reduction in the Optionee’s other compensation. A Stock
Option Agreement may provide that a new Option will be granted automatically to
the Optionee when he or she exercises a prior Option and pays the Exercise Price
in the form described in Section 6.2.

 

5.2                                 Number of Shares.    Each Stock Option
Agreement shall specify the number of Common Shares subject to the Option and
shall provide for the adjustment of such number in accordance with Article 10.
Options granted to any Optionee in a single calendar year shall in no event
cover more than 250,000 Common Shares, subject to adjustment in accordance with
Article 10.

 

5.3                                 Exercise Price.    Each Stock Option
Agreement shall specify the Exercise Price; provided that the Exercise Price
under an ISO shall in no event be less than 100% of the Fair Market Value of a
Common Share on the date of grant and the Exercise Price under an NSO shall in
no event be less than the par value of the Common Shares subject to such NSO. In
the case of an NSO, a Stock Option Agreement may specify an Exercise Price that
varies in accordance with a predetermined formula while the NSO is outstanding,
provided that prior to the Company’s initial public offering, the NSO Exercise
Price shall be at least 85% (110% for 10% shareholders) of the Fair Market Value
of a Common Share of Stock on the date of grant.

 

5.4                                 Exercisability and Term.    Each Stock
Option Agreement shall specify the date when all or any installment of the
Option is to become exercisable, provided that prior to the Company’s initial
public offering, Options shall become exercisable pursuant to a schedule
providing for at least 20% vesting per year over a five-year period (or, in the
case of performance options, to the extent permitted under applicable
regulations of the California Department of Corporations). The Stock Option
Agreement shall also specify the term of the Option, provided that the term of
an ISO shall in no event exceed 10 years from the date of grant. A Stock Option
Agreement may provide for accelerated exercisability in the event of the
Optionee’s death, disability or retirement or other events and may provide for
expiration prior to the end of its term in the event of the termination of the
Optionee’s service.  Except as explicitly provided otherwise in an Optionee’s
Stock Option Agreement, in the event that an Optionee’s service is terminated
for Cause, the Stock Option shall terminate upon the termination date of such
Optionee’s service, and the Optionee shall be prohibited from exercising his or
her Stock Option from and after the time of such termination of service.

 

Options may be awarded in combination with SARs, and such an Award may provide
that the Options will not be exercisable unless the related SARs are forfeited.
NSOs may also be awarded in combination with Restricted Shares or Stock Units,
and such an Award may provide that the NSOs will not be exercisable unless the
related Restricted Shares or Stock Units are forfeited.

 

Prior to the Company’s initial public offering, Options must be exercised within
30 days of the termination of employment (six months for termination on account
of death or disability).

 

5.5                                 Effect of Change in Control.    The
Committee may determine, at the time of granting an Option or thereafter, that
such Option shall become fully exercisable as to all Common Shares subject to
such Option in the event that a Change in Control occurs with respect to the
Company.

 

5.6                                 Modification or Assumption of
Options.    Within the limitations of the Plan (including, without limitation,
Section 2.3), the Committee may modify, extend or assume outstanding options or,
if in connection with a merger or similar corporate reorganization, may accept
the cancellation of outstanding options in return for the grant of new options;
provided, however, that with respect to the shares subject to the new Option,
there shall be no decrease in the aggregate exercise price of such shares,
determined on an adjusted basis. The foregoing notwithstanding, no modification
of an Option shall, without the consent of the Optionee, alter or impair his or
her rights or obligations under such Option.

 

5.7                                 Other Requirements Prior to Company’s
Initial Public Offering.    Prior to the Company’s initial public offering,
Optionees shall receive Company financial statements at least annually.

 

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ARTICLE 6                                   PAYMENT FOR OPTION SHARES.

 

6.1                                 General Rule.    The entire Exercise Price
of Common Shares issued upon exercise of Options shall be payable in cash at the
time when such Common Shares are purchased, except as follows:

 

(a)  In the case of an ISO granted under the Plan, payment shall be made only
pursuant to the express provisions of the applicable Stock Option Agreement. The
Stock Option Agreement may specify that payment may be made in any form(s)
described in this Article 6.

 

(b)  In the case of an NSO, the Committee may at any time accept payment in any
form(s) described in this Article 6.

 

6.2                                 Surrender of Stock.    To the extent that
this Section 6.2 is applicable, payment for all or any part of the Exercise
Price may be made with Common Shares which have already been owned by the
Optionee for more than six months. Such Common Shares shall be valued at their
Fair Market Value on the date when the new Common Shares are purchased under the
Plan.

 

6.3                                 Exercise/Sale.    To the extent that this
Section 6.3 is applicable, payment may be made by the delivery (on a form
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Common Shares and to deliver all or part of the
sales proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.

 

6.4                                 Exercise/Pledge.    To the extent that this
Section 6.4 is applicable, payment may be made by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge Common Shares
to a securities broker or lender approved by the Company, as security for a
loan, and to deliver all or part of the loan proceeds to the Company in payment
of all or part of the Exercise Price and any withholding taxes.

 

6.5                                 Promissory Note.    To the extent that this
Section 6.5 is applicable, payment may be made with a full-recourse promissory
note; provided that the par value of the Common Shares shall be paid in cash.

 

6.6                                 Other Forms of Payment.    To the extent
that this Section 6.6 is applicable, payment may be made in any other form that
is consistent with applicable laws, regulations and rules.

 

ARTICLE 7                                   STOCK APPRECIATION RIGHTS.

 

7.1                                 SAR Agreement.    Each grant of an SAR under
the Plan shall be evidenced by an SAR Agreement between the Optionee and the
Company. Such SAR shall be subject to all applicable terms of the Plan and may
be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various SAR Agreements entered into under the Plan need not be
identical. SARs may be granted in consideration of a reduction in the Optionee’s
other compensation.

 

7.2                                 Number of Shares.    Each SAR Agreement
shall specify the number of Common Shares to which the SAR pertains and shall
provide for the adjustment of such number in accordance with Article 10. SARs
granted to any Optionee in a single calendar year shall in no event pertain to
more than 250,000 Common Shares, subject to adjustment in accordance with
Article 10.

 

7.3                                 Exercise Price.    Each SAR Agreement shall
specify the Exercise Price. An SAR Agreement may specify an Exercise Price that
varies in accordance with a predetermined formula while the SAR is outstanding.

 

7.4                                 Exercisability and Term.    Each SAR
Agreement shall specify the date when all or any installment of the SAR is to
become exercisable. The SAR Agreement shall also specify the term of the SAR. An
SAR Agreement may provide for accelerated exercisability in the event of the
Optionee’s death, disability or retirement or other events and may provide for
expiration prior to the end of its term in the event of the termination of the
Optionee’s

 

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service.  Except as explicitly provided otherwise in a SAR Agreement, in the
event that an Optionee’s service is terminated for Cause, the SAR shall
terminate upon the termination date of such Optionee’s service, and the Optionee
shall be prohibited from exercising his or her SAR from and after the time of
such termination of service

 

SARs may also be awarded in combination with Options, Restricted Shares or Stock
Units, and such an Award may provide that the SARs will not be exercisable
unless the related Options, Restricted Shares or Stock Units are forfeited. An
SAR may be included in an ISO only at the time of grant but may be included in
an NSO at the time of grant or thereafter. An SAR granted under the Plan may
provide that it will be exercisable only in the event of a Change in Control.

 

7.5                                 Effect of Change in Control.    The
Committee may determine, at the time of granting an SAR or thereafter, that such
SAR shall become fully exercisable as to all Common Shares subject to such SAR
in the event that a Change in Control occurs with respect to the Company.

 

7.6                                 Exercise of SARs.    The exercise of an SAR
shall be subject to the restrictions imposed by Rule 16b-3 (or its successor)
under the Exchange Act, if applicable. If, on the date when an SAR expires, the
Exercise Price under such SAR is less than the Fair Market Value on such date
but any portion of such SAR has not been exercised or surrendered, then such SAR
shall automatically be deemed to be exercised as of such date with respect to
such portion. Upon exercise of an SAR, the Optionee (or any person having the
right to exercise the SAR after his or her death) shall receive from the Company
(a) Common Shares, (b) cash or (c) a combination of Common Shares and cash, as
the Committee shall determine. The amount of cash and/or the Fair Market Value
of Common Shares received upon exercise of SARs shall, in the aggregate, be
equal to the amount by which the Fair Market Value (on the date of surrender) of
the Common Shares subject to the SARs exceeds the Exercise Price.

 

7.7                                 Modification or Assumption of
SARs.    Within the limitations of the Plan (including, without limitation,
Section 2.3), the Committee may modify, extend or assume outstanding SARs or, if
in connection with a merger or similar corporate reorganization, may accept the
cancellation of outstanding SARs in return for the grant of new SARs provided,
however, that with respect to the shares subject to the new SARs, there shall be
no decrease in the aggregate exercise price of such shares, determined on an
adjusted basis. The foregoing notwithstanding, no modification of an SAR shall,
without the consent of the Optionee, alter or impair his or her rights or
obligations under such SAR.

 

ARTICLE 8                                   RESTRICTED SHARES AND STOCK UNITS.

 

8.1                                 Time, Amount and Form of Awards.    Awards
under the Plan may be granted in the form of Restricted Shares, in the form of
Stock Units, or in any combination of both. Restricted Shares or Stock Units may
also be awarded in combination with NSOs or SARs, and such an Award may provide
that the Restricted Shares or Stock Units will be forfeited in the event that
the related NSOs or SARs are exercised.

 

8.2                                 Payment for Awards.    To the extent that an
Award is granted in the form of newly issued Restricted Shares, the Award
recipient, as a condition to the grant of such Award, shall be required to pay
the Company in cash an amount equal to the par value of such Restricted Shares.
To the extent that an Award is granted in the form of Restricted Shares from the
Company’s treasury or in the form of Stock Units, no cash consideration shall be
required of the Award recipients.

 

8.3                                 Vesting Conditions.    Each Award of
Restricted Shares or Stock Units shall become vested, in full or in
installments, upon satisfaction of the conditions specified in the Stock Award
Agreement. A Stock Award Agreement may provide for accelerated vesting in the
event of the Participant’s death, disability or retirement or other events. The
Committee may determine, at the time of making an Award or thereafter, that such
Award shall become fully vested in the event that a Change in Control occurs
with respect to the Company.

 

8.4                                 Performance Awards.    Awards of Restricted
Shares or Stock Units may be granted, may vest, or may be exercised based upon
the attainment during a Performance Period of certain Performance Goals (each, a
“Performance Award”).  A Performance Award may, but need not, require the
completion of a specified period of

 

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service. The length of any Performance Period, the Performance Goals to be
achieved during the Performance Period, and the measure of whether and to what
degree such Performance Goals have been attained shall be conclusively
determined by the Committee in its sole discretion.  The maximum number of
Common Shares that may be granted to any Participant in a calendar year
attributable to Stock Awards described in this Section 8.4 shall not exceed Two
Hundred Fifty Thousand (250,000) Common Shares, subject to adjustment in
accordance with Section 10.

 

8.5                                 Form and Time of Settlement of Stock
Units.    Settlement of vested Stock Units may be made in the form of (a) cash,
(b) Common Shares or (c) any combination of both, as determined by the
Committee. The actual number of Stock Units eligible for settlement may be
larger or smaller than the number included in the original Award, based on
predetermined performance factors. Methods of converting Stock Units into cash
may include (without limitation) a method based on the average Fair Market Value
of Common Shares over a series of trading days. Vested Stock Units may be
settled in a lump sum or in installments. The distribution may occur or commence
when all vesting conditions applicable to the Stock Units have been satisfied or
have lapsed, or it may be deferred to any later date. The amount of a deferred
distribution may be increased by an interest factor or by dividend equivalents.
Until an Award of Stock Units is settled, the number of such Stock Units shall
be subject to adjustment pursuant to Article 10.

 

8.6                                 Death of Recipient.    Any Stock Units Award
that becomes payable after the recipient’s death shall be distributed to the
recipient’s beneficiary or beneficiaries. Each recipient of a Stock Units Award
under the Plan shall designate one or more beneficiaries for this purpose by
filing the prescribed form with the Company. A beneficiary designation may be
changed by filing the prescribed form with the Company at any time before the
Award recipient’s death. If no beneficiary was designated or if no designated
beneficiary survives the Award recipient, then any Stock Units Award that
becomes payable after the recipient’s death shall be distributed to the
recipient’s estate.

 

8.7                                 Creditors’ Rights.    A holder of Stock
Units shall have no rights other than those of a general creditor of the
Company. Stock Units represent an unfunded and unsecured obligation of the
Company, subject to the terms and conditions of the applicable Stock Award
Agreement.

 

ARTICLE 9                                   VOTING AND DIVIDEND RIGHTS.

 

9.1                                 Restricted Shares.    The holders of
Restricted Shares awarded under the Plan shall have the same voting, dividend
and other rights as the Company’s other stockholders. A Stock Award Agreement,
however, may require that the holders of Restricted Shares invest any cash
dividends received in additional Restricted Shares. Such additional Restricted
Shares shall be subject to the same conditions and restrictions as the Award
with respect to which the dividends were paid. Such additional Restricted Shares
shall not reduce the number of Common Shares available under Article 3.

 

9.2                                 Stock Units.    The holders of Stock Units
shall have no voting rights. Prior to settlement or forfeiture, any Stock Unit
awarded under the Plan may, at the Committee’s discretion, carry with it a right
to dividend equivalents. Such right entitles the holder to be credited with an
amount equal to all cash dividends paid on one Common Share while the Stock Unit
is outstanding. Dividend equivalents may be converted into additional Stock
Units. Settlement of dividend equivalents may be made in the form of cash, in
the form of Common Shares, or in a combination of both. Prior to distribution,
any dividend equivalents which are not paid shall be subject to the same
conditions and restrictions as the Stock Units to which they attach.

 

ARTICLE 10                             PROTECTION AGAINST DILUTION.

 

10.1                           Adjustments.    In the event of a subdivision of
the outstanding Common Shares, a declaration of a dividend payable in Common
Shares, a declaration of a dividend payable in a form other than Common Shares
in an amount that has a material effect on the price of Common Shares, a
combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise) into a lesser number of Common Shares, a
recapitalization, a spinoff or a similar occurrence, the Committee shall make
such adjustments as it, in its sole discretion, deems appropriate in one or more
of (a) the number of Options, SARs, Restricted Shares and Stock Units available
for

 

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future Awards under Article 3, (b) the limitations set forth in Sections 5.2,
7.2 and 8.4, (c) the number of NSOs to be granted to Outside Directors under
Section 4.2, (d) the number of Stock Units included in any prior Award which has
not yet been settled, (e) the number of Common Shares covered by each
outstanding Option and SAR or (f) the Exercise Price under each outstanding
Option and SAR. Except as provided in this Article 10, a Participant shall have
no rights by reason of any issue by the Company of stock of any class or
securities convertible into stock of any class, any subdivision or consolidation
of shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class.

 

10.2                           Reorganizations.    In the event that the Company
is a party to a merger or other reorganization, outstanding Options, SARs,
Restricted Shares and Stock Units shall be subject to the agreement of merger or
reorganization. Such agreement may provide, without limitation, for the
assumption of outstanding Awards by the surviving corporation or its parent, for
their continuation by the Company (if the Company is a surviving corporation),
for accelerated vesting and accelerated expiration (provided the Company has
previously had its initial public offering), or for settlement in cash.

 

ARTICLE 11                             AWARDS UNDER OTHER PLANS.

 

The Company may grant awards under other plans or programs. Such awards may be
settled in the form of Common Shares issued under this Plan. Such Common Shares
shall be treated for all purposes under the Plan like Common Shares issued in
settlement of Stock Units and shall, when issued, reduce the number of Common
Shares available under Article 3.

 

ARTICLE 12                             PAYMENT OF DIRECTOR’S FEES IN SECURITIES.

 

12.1                           Effective Date.    No provision of this
Article 12 shall be effective unless and until the Board has determined to
implement such provision.

 

12.2                           Elections to Receive NSOs, Restricted Shares or
Stock Units.    An Outside Director may elect to receive his or her annual
retainer payments and meeting fees from the Company in the form of cash, NSOs,
Restricted Shares, Stock Units, or a combination thereof, as determined by the
Board. Such NSOs, Restricted Shares and Stock Units shall be issued under the
Plan. An election under this Article 12 shall be filed with the Company on the
prescribed form.

 

12.3                           Number and Terms of NSOs, Restricted Shares or
Stock Units.    The number of NSOs, Restricted Shares or Stock Units to be
granted to Outside Directors in lieu of annual retainers and meeting fees that
would otherwise be paid in cash shall be calculated in a manner determined by
the Board. The terms of such NSOs, Restricted Shares or Stock Units shall also
be determined by the Board.

 

ARTICLE 13                             LIMITATION ON RIGHTS.

 

13.1                           Retention Rights.    Neither the Plan nor any
Award granted under the Plan shall be deemed to give any individual a right to
remain an employee, consultant or director of the Company, a Parent or a
Subsidiary. The Company and its Parents and Subsidiaries reserve the right to
terminate the service of any employee, consultant or director at any time, with
or without cause, subject to applicable laws, the Company’s certificate of
incorporation and by-laws and a written employment agreement (if any).

 

13.2                           Stockholders’ Rights.    A Participant shall have
no dividend rights, voting rights or other rights as a stockholder with respect
to any Common Shares covered by his or her Award prior to the issuance of a
stock certificate for such Common Shares. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date when
such certificate is issued, except as expressly provided in Articles 8, 9 and
10.

 

13.3                           Regulatory Requirements.    Any other provision
of the Plan notwithstanding, the obligation of the Company to issue Common
Shares under the Plan shall be subject to all applicable laws, rules and
regulations and

 

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such approval by any regulatory body as may be required. The Company reserves
the right to restrict, in whole or in part, the delivery of Common Shares
pursuant to any Award prior to the satisfaction of all legal requirements
relating to the issuance of such Common Shares, to their registration,
qualification or listing or to an exemption from registration, qualification or
listing.

 

ARTICLE 14                             LIMITATION ON PAYMENTS.

 

The following provisions in this Article 14 are effective for Awards granted on
or after November 7, 2002.

 

14.1                           Excise Tax.   If any acceleration of the vesting
of a Participant’s Awards under this Plan  (“Acceleration”) would (i) constitute
a “parachute payment” within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then such Acceleration shall be reduced to the Reduced Amount.  The
“Reduced Amount” shall be whichever of the following which would provide the
largest after-tax benefit to the Participant: (i) the largest portion of the
Acceleration that would result in no portion of the Acceleration being subject
to the Excise Tax or (ii) the largest portion, up to and including the total, of
the Acceleration, whichever amount, after taking into account all applicable
federal, state and local employment taxes, income taxes, and the Excise Tax (all
computed at the highest applicable marginal rate), results in Participant’s
receipt, on an after-tax basis, of the greater amount of the Acceleration
notwithstanding that all or some portion of the Payment may be subject to the
Excise Tax. In the event that the Acceleration is to be reduced, such
Acceleration shall be cancelled in the reverse order of the date of grant of the
Participant’s Awards unless the Participant elects in writing a different order
for cancellation.

 

The accounting firm engaged by the Company for general audit purposes as of the
day prior to the effective date of the transaction triggering the Acceleration
(“Triggering Transaction”) shall perform the foregoing calculations.  If the
accounting firm so engaged by the Company is serving as accountant or auditor
for the individual, entity or group effecting the Triggering Transaction, the
Company shall appoint a nationally recognized accounting firm to make the
determinations required hereunder.  The Company shall bear all expenses with
respect to the determinations by such accounting firm required to be made
hereunder.

 

14.2                           Calculations.  The accounting firm engaged to
make the determinations hereunder shall provide its calculations, together with
detailed supporting documentation, to the Corporation and Participant within
fifteen (15) calendar days after the date on which Participant’s right to
Acceleration arises (if requested at that time by the Company or Participant) or
at such other time as requested by the Company or Participant.  If the
accounting firm determines that no Excise Tax is payable with respect to an
Acceleration, either before or after the application of the Reduced Amount, it
shall furnish the Company and Participant with an opinion reasonably acceptable
to Participant that no Excise Tax will be imposed with respect to such
Acceleration.  Any good faith determination of the accounting firm made
hereunder shall be final, binding and conclusive upon the Company and
Participant.

 

14.3                           Related Corporations.  For purposes of this
Article 14, the term “Company” shall include affiliated corporations to the
extent determined by the accounting firm in accordance with section 280G(d)(5)
of the Code.

 

ARTICLE 15                             WITHHOLDING TAXES.

 

15.1                           General.    To the extent required by applicable
federal, state, local or foreign law, a Participant or his or her successor
shall make arrangements satisfactory to the Company for the satisfaction of any
withholding tax obligations that arise in connection with the Plan. The Company
shall not be required to issue any Common Shares or make any cash payment under
the Plan until such obligations are satisfied.

 

15.2                           Share Withholding.    The Committee may permit a
Participant to satisfy all or part of his or her withholding or income tax
obligations by having the Company withhold all or a portion of any Common Shares
that otherwise would be issued to him or her or by surrendering all or a portion
of any Common Shares that he or she previously acquired. Such Common Shares
shall be valued at their Fair Market Value on the date when taxes

 

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otherwise would be withheld in cash. Any payment of taxes by assigning Common
Shares to the Company may be subject to restrictions, including any restrictions
required by rules of the Securities and Exchange Commission.

 

ARTICLE 16                             ASSIGNMENT OR TRANSFER OF AWARDS.

 

16.1                           General.    An Award granted under the Plan shall
not be anticipated, assigned, attached, garnished, optioned, transferred or made
subject to any creditor’s process, whether voluntarily, involuntarily or by
operation of law, except as approved by the Company. Notwithstanding the
foregoing, ISOs and, prior to the Company’s initial public offering, NSOs may
not be transferable. However, this Article 16 shall not preclude a Participant
from designating a beneficiary who will receive any outstanding Awards in the
event of the Participant’s death, nor shall it preclude a transfer of Awards by
will or by the laws of descent and distribution.

 

16.2                           Trusts.    Neither this Article 16 nor any other
provision of the Plan shall preclude a Participant from transferring or
assigning Restricted Shares to (a) the trustee of a trust that is revocable by
such Participant alone, both at the time of the transfer or assignment and at
all times thereafter prior to such Participant’s death, or (b) the trustee of
any other trust to the extent approved in advance by the Company in writing. A
transfer or assignment of Restricted Shares from such trustee to any person
other than such Participant shall be permitted only to the extent approved in
advance by the Company in writing, and Restricted Shares held by such trustee
shall be subject to all of the conditions and restrictions set forth in the Plan
and in the applicable Stock Award Agreement, as if such trustee were a party to
such Agreement.

 

ARTICLE 17                             FUTURE OF THE PLAN.

 

17.1                           Term of the Plan.    The Plan, as set forth
herein, was adopted on December 5, 1996, and became effective December 1, 1996,
except that Articles 7, 8 and 9 shall not be effective prior to the date of the
Company’s initial public offering. The Plan shall remain in effect until it is
terminated under Section 17.2, except that no ISOs shall be granted after March
15, 2016.

 

17.2                           Amendment or Termination.    The Board may, at
any time and for any reason, amend or terminate the Plan. An amendment of the
Plan shall be subject to the approval of the Company’s stockholders only to the
extent required by applicable laws, regulations or rules. No Awards shall be
granted under the Plan after the termination thereof. The termination of the
Plan, or any amendment thereof, shall not affect any Award previously granted
under the Plan.

 

ARTICLE 18          DEFINITIONS.

 

18.1                           “Award” means any award of an Option, an SAR, a
Restricted Share or a Stock Unit under the Plan.

 

18.2                           “Board” means the Company’s Board of Directors,
as constituted from time to time.

 

18.3                           “Cause” means, with respect to a Participant, the
occurrence of any of the following events:

 

(a)  Such Participant’s conviction of, or plea of guilty or no contest with
respect to, (i) any crime involving fraud, dishonesty or moral turpitude, (ii)
any felony under the laws of the United States or any state thereof, or (iii)
any criminal law of a foreign jurisdiction which could result in imprisonment
for more than one year;

 

(b)  such Participant’s attempted commission of, or participation in, a fraud or
act of dishonesty against the Company that results in (or might reasonably
result in) material harm to the Company;

 

(c)  such Participant’s intentional and material violation of any statutory duty
owed to the Company;

 

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(d)  such Participant’s unauthorized use or disclosure of the Company’s material
confidential information, material trade secrets or material proprietary
information; or

 

(e)  such Participant’s gross misconduct, gross negligence, intentional
violation of a written policy of the Company or intentional violation of a
fiduciary duty to the Company.

 

18.4                           “Change in Control” shall mean the occurrence of
any of the following events:

 

(a)  The consummation of a merger or consolidation of the Company with or into
another entity or any other corporate reorganization, if more than 50% of the
combined voting power of the continuing or surviving entity’s securities
outstanding immediately after such merger, consolidation or other reorganization
is owned by persons who were not stockholders of the Company immediately prior
to such merger, consolidation or other reorganization;

 

(b)  A change in the composition of the Board, as a result of which fewer than
one-half of the incumbent directors are directors who either:

 

(A)  Had been directors of the Company 24 months prior to such change; or

 

(B)  Were elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the directors who had been directors of the
Company 24 months prior to such change and who were still in office at the time
of the election or nomination; or

 

(c)  Any “person” (as such term is used in sections 13(d) and 14(d) of the
Exchange Act) by the acquisition or aggregation of securities is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the “Base
Capital Stock”); except that any change in the relative beneficial ownership of
the Company’s securities by any person resulting solely from a reduction in the
aggregate number of outstanding shares of Base Capital Stock, and any decrease
thereafter in such person’s ownership of securities, shall be disregarded until
such person increases in any manner, directly or indirectly, such person’s
beneficial ownership of any securities of the Company.

 

The term “Change in Control” shall not include the Company’s initial public
offering or a transaction, the sole purpose of which is to change the state of
the Company’s incorporation.

 

18.5                           “Code” means the Internal Revenue Code of 1986,
as amended.

 

18.6                           “Committee” means a committee of the Board, as
described in Article 2.

 

18.7                           “Common Share” means one share of the common
stock of the Company.

 

18.8                           “Company” means Biosite Incorporated, a Delaware
corporation.

 

18.9                           “Exchange Act” means the Securities Exchange Act
of 1934, as amended.

 

18.10                     “Exercise Price,” in the case of an Option, means the
amount for which one Common Share may be purchased upon exercise of such Option,
as specified in the applicable Stock Option Agreement. “Exercise Price,” in the
case of an SAR, means an amount, as specified in the applicable SAR Agreement,
which is subtracted from the Fair Market Value of one Common Share in
determining the amount payable upon exercise of such SAR.

 

18.11                     “Fair Market Value” means the market price of Common
Shares, determined by the Committee as follows:

 

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(a)  If the Common Shares were traded over-the-counter on the date in question
but was not traded on the Nasdaq Stock Market or the Nasdaq National Market,
then the Fair Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which the Common Shares are quoted
or, if the Common Shares are not quoted on any such system, by the “Pink Sheets”
published by the National Quotation Bureau, Inc.;

 

(b)  If the Common Shares were traded over-the-counter on the date in question
and were traded on the Nasdaq Stock Market or the Nasdaq National Market, then
the Fair Market Value shall be equal to the last-transaction price quoted for
such date by the Nasdaq Stock Market or the Nasdaq National Market;

 

(c)  If the Common Shares were traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite transactions report for such date; and

 

(d)  If none of the foregoing provisions is applicable, then the Fair Market
Value shall be determined by the Committee in good faith on such basis as it
deems appropriate.

 

Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of The Wall Street
Journal. Such determination shall be conclusive and binding on all persons.

 

18.12                     “ISO” means an incentive stock option described in
section 422(b) of the Code.

 

18.13                     “Key Employee” means (a) a common-law employee of the
Company, a Parent or a Subsidiary, (b) an Outside Director and (c) a consultant
or adviser who provides services to the Company, a Parent or a Subsidiary as an
independent contractor. Service as an Outside Director or as an independent
contractor shall be considered employment for all purposes of the Plan, except
as provided in Sections 4.2 and 4.3.

 

18.14                     “NSO” means a stock option not described in sections
422 or 423 of the Code.

 

18.15                     “Option” means an ISO or NSO granted under the Plan
and entitling the holder to purchase one Common Share.

 

18.16                     “Optionee” means an individual or estate who holds an
Option or SAR.

 

18.17                     “Outside Director” shall mean a member of the Board
who is not a common-law employee of the Company, a Parent or a Subsidiary.

 

18.18                     “Parent” means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company, if each
of the corporations other than the Company owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.

 

18.19                     “Participant” means an individual or estate who holds
an Award.

 

18.20                     “Performance Award” means an Award of Restricted
Shares or Stock Units granted under the terms and conditions of Section 8.4.

 

18.21                     “Performance Criteria” means the one or more criteria
that the Committee shall select for purposes of establishing the Performance
Goals for a Performance Period. The Performance Criteria that shall be used to
establish such Performance Goals may be based on any one of, or combination of,
the following: (a) earnings per

 

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share; (b) earnings before interest, taxes and depreciation; (c) earnings before
interest, taxes, depreciation and amortization; (d) total stockholder return;
(e) return on equity; (f) return on assets, investment, or capital employed; (g)
operating margin; (h) gross margin; (i) operating income; (j) net income (before
or after taxes); (k) net operating income; (l) net operating income after tax;
(m) pre-tax profit; (n) operating cash flow; (o) sales or revenue targets; (p)
increases in revenue or product revenue; (q) expenses and cost reduction goals;
(r) improvement in or attainment of working capital levels; (s) economic value
added (or an equivalent metric); (t) market share; (u) cash flow; (v) cash flow
per share; (w) share price performance; (x) debt reduction; (y) implementation
or completion of projects or processes; (z) customer satisfaction; (aa)
stockholders’ equity; (bb) achievements of product development milestones; (cc) 
regulatory achievements and/or approval of one or more products; (dd) progress
of internal research, clinical, educational or commercial programs; (ee)
progress of partnered programs; and (ff) to the extent that an Award is not
intended to comply with Section 162(m) of the Code, other measures of
performance selected by the Committee.  Partial achievement of the specified
criteria may result in the payment or vesting corresponding to the degree of
achievement as specified in the Stock Award Agreement.  The Committee shall, in
its sole discretion, define the manner of calculating the Performance Criteria
it selects to use for such Performance Period; for example, to the extent that
the Performance Criteria are determinable under generally accepted accounting
principles, the Committee may exclude items that would otherwise be included (or
include items that would otherwise be excluded) under generally accepted
accounting principles, provided that such exclusion (or inclusion) is provided
in writing at the time the Committee establishes the Performance Goals for a
Performance Period.

 

18.22                     “Performance Goals” means, for a Performance Period,
the one or more goals established by the Committee for the Performance Period
based upon the Performance Criteria.  Performance Goals may be based on a
Company-wide basis, with respect to one or more business units, divisions,
affiliates, or business segments, and in either absolute terms or relative to
the performance of one or more comparable companies or the performance of one or
more relevant indices.  At the time of the grant of any Award, the Committee is
authorized to determine whether, when calculating the attainment of Performance
Goals for a Performance Period: (a) to exclude restructuring and/or other
nonrecurring charges; (b) to exclude exchange rate effects, as applicable, for
non-U.S. dollar denominated net sales and operating earnings; (c) to exclude the
effects of changes to generally accepted accounting standards required by the
Financial Accounting Standards Board; (d) to exclude the effects of any
statutory adjustments to corporate tax rates; (e) to exclude the effects of any
“extraordinary items” as determined under generally accepted accounting
principles; and (f) to the extent than an Award is not intended to comply with
Section 162(m) of the Code, to exclude other items as determined by the
Committee.  In addition, to the extent provided in an Award Agreement, the
Committee may retain the discretion to reduce or eliminate the compensation or
economic benefit due upon attainment of Performance Goals.

 

18.23                     “Performance Period” means the period of time selected
by the Committee over which the attainment of one or more Performance Goals will
be measured for the purpose of determining a Participant’s right to and the
payment of a Performance Award.  Performance Periods may be of varying and
overlapping duration, at the sole discretion of the Committee.

 

18.24                     “Plan” means this 1996 Stock Incentive Plan of Biosite
Incorporated, as amended from time to time.

 

18.25                     “Restricted Share” means a Common Share awarded under
the Plan.

 

18.26                     “SAR” means a stock appreciation right granted under
the Plan.

 

18.27                     “SAR Agreement” means the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to his or her SAR.

 

18.28                     “Stock Award Agreement” means the agreement between
the Company and the recipient of a Restricted Share or Stock Unit which contains
the terms, conditions and restrictions pertaining to such Restricted Share or
Stock Unit.

 

18.29                     ”Stock Option Agreement” means the agreement between
the Company and an Optionee which contains the terms, conditions and
restrictions pertaining to his or her Option.

 

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18.30                     ”Stock Unit” means a bookkeeping entry representing
the equivalent of one Common Share, as awarded under the Plan.

 

18.31                     “Subsidiary” means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. A corporation
that attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.

 

ARTICLE 19                             EXECUTION.

 

To record the adoption of the Plan by the Board, the Company has caused its duly
authorized officer to affix the corporate name and seal hereto.

 

 

BIOSITE INCORPORATED

 

 

 

By

 

 

 

 

 

 

 

 

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Rules of the Biosite Incorporated
1996 Stock Incentive Plan for Employees in France

 

Introduction.

 

The Board of Directors (the “Board”) of Biosite Incorporated (the “Company”) has
established the Biosite Incorporated 1996 Stock Incentive Plan (the “U.S. Plan”)
for the benefit of certain employees of the Company, its parent and
subsidiaries, including its subsidiary(ies) in France of which the Company holds
directly or indirectly at least 10% of the share capital (the “French
Subsidiary”). The U.S. Plan specifically authorizes the committee established by
the Board to administer the U.S. Plan (the “Committee”) to adopt such rules or
guidelines relating to the U.S. Plan (including with respect to options granted
in France) as the Committee deems appropriate to implement the U.S. Plan. The
Committee has determined that it is appropriate and advisable to establish a
sub-plan for the purpose of permitting such options to qualify for French
favorable local tax and social security treatment. The Committee, therefore,
intends to establish a sub-plan of the U.S. Plan for the purpose of granting
options that qualify for the favorable tax and social security treatment in
France applicable to options granted under Sections L. 225-177 to L. 225-186 of
the French Commercial Code, as amended, to qualifying employees who are resident
in France for French tax purposes (the “French Optionees”). The terms of the
U.S. Plan, as set out in Appendix 1 hereto, shall, subject to the modifications
in the following rules, constitute the Rules of the Biosite Incorporated 1996
Stock Incentive Plan for Employees in France (the “French Plan”).

 

Under the French Plan, the French Optionees will be granted only Options as
defined in Section 2 hereunder. In no case will they will granted other awards,
e.g., stock appreciation rights, restricted shares, restricted stock units or
any other type of award, as described in the U.S. Plan.

 

Definitions.

 

Capitalized terms not otherwise defined herein shall have the same meanings as
set forth in the U.S. Plan. The terms set out below will have the following
meanings:

 

(a)          Option.    The term “Option” shall have the following meaning:

 

Purchase stock options that are rights to acquire Common Shares repurchased by
the Company prior to the vesting of the Options; or

 

Subscription stock options that are rights to subscribe for newly issued Common
Shares.

 

(b)   Closed Period.    The term “Closed Period” means specific periods as set
forth by Section L. 225-177 of the French Commercial Code, as amended, during
which French qualifying Options cannot be granted, so long as such Closed
Periods are applicable to Options, as described in Section 9 below.

 

(c)   Grant Date.    Notwithstanding any provisions in the U.S. Plan to the
contrary, the term “Grant Date” shall be the date on which both (a) the French
Optionee is designated, and (b) the terms and conditions of the Option including
the number of Common Shares and the method for determining the Exercise Price
are specified. In no event shall the Grant Date be during a Closed Period. In
such a case, the effective Grant Date for the French Optionee would be the date
described in Section 9 below.

 

(d)   Disability.    The term “Disability” is defined in accordance with
categories 2 and 3 under Section L. 341-4 of the French Social Security Code, as
amended.

 

Entitlement to Participate.

 

(a)   Subject to Section 3(b) below, any individual who, on the Grant Date, is
either bound to the French Subsidiary by an employment contract (“contrat de
travail”) or who is a corporate officer of the French Subsidiary,

 

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shall be eligible to receive Options under the French Plan provided that he or
she also satisfies the eligibility conditions of the U.S. Plan.

 

(b)   Notwithstanding any provision in the U.S. Plan to the contrary, Options
may not be issued under the French Plan to employees or corporate officers
owning more than ten percent (10%) of the Company’s capital shares or to
individuals other than employees and corporate officers of the French
Subsidiary. Options may not be issued to directors of the French Subsidiary,
other than managing directors (Président du Conseil d’Administration, Directeur
Général, Directeur Général Délégué, Membre du Directoire, Gérant de sociétés par
actions), unless they are employed by the French Subsidiary, as defined by
French law.

 

Non-Transferability of Option.

 

Notwithstanding any provision in the U.S. Plan to the contrary and, except in
the case of death, Options cannot be transferred to any third party. In
addition, the Options are only exercisable by the French Optionee during the
lifetime of the French Optionee.

 

Conditions of the Option/Exercise Price.

 

(a)   Notwithstanding any provision in the U.S. Plan to the contrary, the terms
and conditions of the Options shall not be modified after the Grant Date, except
that the Exercise Price and number of Common Shares subject to the Option may be
modified as provided under Section 7 below, or as otherwise in keeping with
French law.

 

(b)   The Options will vest and become exercisable pursuant to the terms and
conditions set forth in the U.S. Plan, this French Plan and the respective Stock
Option Agreement delivered to each French Optionee. Notwithstanding any
provision in the U.S. Plan to the contrary, the French Optionee will not be
permitted to sell Common Shares acquired upon exercise of an Option before the
expiration of the applicable holding period for French qualifying Options set
forth by Section 163 bis C of the French Tax Code, as amended, except as
provided in this French Plan or as otherwise in keeping with French law. To
prevent the French Optionee from selling the Common Shares subject to the Option
before the expiration of the applicable holding period, the Committee may, in
its discretion, restrict the vesting and/or exercisability of the Option and/or
the sale of Common Shares until the expiration of the applicable holding period,
as set forth in the Stock Option Agreement to be delivered to each French
Optionee. However, the French Optionee may be permitted to vest in or exercise
the Option or sell the Common Shares subject to the Option before the expiration
of the applicable holding period in the cases of dismissal, forced retirement,
Disability or death, as defined in Section 91 ter of Exhibit II to the French
Tax Code, as amended, and in applicable Circulars

 

(c)   The method for determining the Exercise Price payable pursuant to Options
issued hereunder shall be fixed by the Committee on the Grant Date, but in no
event shall the Exercise Price per Common Share be less than the greater of:

 

(1) With respect to purchase stock options, the higher of either 80% of the
average quotation price of Common Shares during the 20 days of quotation
immediately preceding the Grant Date or 80% of the average purchase price paid
for such Common Shares by the Company;

(2) With respect to subscription stock options, 80% of the average quotation
price of Common Shares during the 20 days of quotation immediately preceding the
Grant Date; and

(3) The minimum Exercise Price permitted under the U.S. Plan.

 

6.               Payment of Exercise Price and Withholding.

 

Notwithstanding any provisions in the U.S. Plan to the contrary, upon exercise
of an Option, the full Exercise Price and any required tax and/or social
security contributions to be withheld by the French Subsidiary on behalf of the
French Optionee will have to be paid either in cash, by check or by wire
transfer. Under a cashless exercise program, the French Optionee may also give
irrevocable instructions to a stockbroker to properly deliver the Exercise Price
to the Company. Notwithstanding any provisions in the U.S. Plan to the contrary,
no delivery of prior

 

15

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owned Common Shares having a Fair Market Value on the date of delivery equal to
the aggregate Exercise Price of the Common Shares may be used as consideration
for exercising an Option.

 

7.               Adjustments.

 

Notwithstanding any provisions of the U.S. Plan to the contrary, in compliance
with French law, adjustments to the Exercise Price and/or the number of Common
Shares subject to an Option issued hereunder shall be made to preclude the
dilution or enlargement of benefits under the Option only in the event of one or
more of the transactions listed below by the Company. Furthermore, even upon
occurrence of one or more of the transactions listed below, no adjustment to the
kind of securities to be granted shall be made (i.e., only Options to acquire
Common Shares, or the equivalent, that are neither convertible nor exchangeable
into other securities or into cash shall be granted to French Optionees). The
transactions are as follows:

 

• an issuance of new Common Shares for cash consideration reserved to the
Company’s existing shareholders;

• an issuance of convertible or exchangeable bonds reserved to the Company’s
existing shareholders;

• a capitalization of retained earnings, profits, or issuance premiums;

• a distribution of reserves by payment in cash or Common Shares;

• a cancellation of Common Shares in order to absorb losses; and

• a repurchase by the Company of its own Common Shares at a price higher than
their then current quotation price in the open market.

 

8.               Reorganization.

 

In the event that a significant decrease in the value of Options granted to
French Optionees occurs or is likely to occur as a result of a reorganization or
a Change in Control as described in the U.S. Plan, the Committee may, in its
sole discretion, but shall not be required to, authorize the immediate vesting
and exercise of Options and the sale of Common Shares before the date on which
any such reorganization or Change in Control becomes effective. If this occurs,
the Options may not receive favorable tax and social security treatment under
French law.

 

9.               Closed Periods.

 

Notwithstanding any provisions in the U.S. Plan to the contrary and since Common
Shares are traded on a regulated market, Options shall not be granted to French
Optionees during the Closed Periods defined by Section L. 225-177 of the French
Commercial Code, as amended, so long as such Closed Periods are applicable to
the Options. If the Grant Date were to occur during an applicable Closed Period,
the effective Grant Date for French Optionees shall be the first date following
the expiration of the Closed Period which would not be a prohibited Grant Date
under the U.S. Plan rules, as determined by the Committee.

 

10.         Termination of Employment/Service.

 

If a termination of employment is due to death, the Option shall be exercisable
as set forth in Section 11 below.

 

In the event of a termination of employment for reasons other than death, the
Option shall be exercisable as set forth in the Stock Option Agreement entered
into with the French Optionee.

 

11.         Death.

 

In the event of the death of a French Optionee, all unforfeited Options shall
become immediately vested and exercisable. The French Optionee’s heirs may
exercise the Options within six months following the death, but any outstanding
Option which remains unexercised shall expire six months following the date of
the French Optionee’s death. The six-month exercise period will apply without
regard to the term of the Option.

 

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12.         Term of the Option.

 

The term of the Option will be nine years and six months, unless otherwise
specified in the applicable Stock Option Agreement. This term can be extended
only in the event of the death of the French Optionee, and in no event will the
term exceed ten years.

 

13.         Interpretation.

 

In the event of any conflict between the provisions of the present French Plan
and the U.S. Plan, the provisions of the French Plan shall control for any
grants made thereunder to French Optionees.

 

It is intended that Options granted under the French Plan shall qualify, subject
to fulfillment of any applicable legal, tax and reporting obligations, for the
favorable tax and social security charges treatment applicable to stock options
granted under Sections L. 225-177 to L. 225-186 of the French Commercial Code,
as subsequently amended, and in accordance with the relevant provisions set
forth by French tax law and the French tax administration. The terms of the
French Plan shall be interpreted accordingly and in accordance with the relevant
provisions set forth by French tax and social security laws, as well as the
French tax and social security administrations.

 

14.         Employment Rights.

 

The adoption of this French Plan shall not confer upon the French Optionees, or
any employees of the French Subsidiary, any employment rights and shall not be
construed as part of the French Optionees’ employment contracts, if any.

 

15.         Amendments.

 

Subject to the terms of the U.S. Plan, the Committee reserves the right to amend
or terminate the French Plan at any time. Such amendments would only apply to
future grants and would not be retroactive.

 

16.         Effective Date.

 

This amended and restated French Plan is effective as of June 18, 2004.

 

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