Exhibit 10.31
(LOGO) [b68107imb6810702.gif]

         
Dated
    2007  

Rules of the Inverness Medical Innovations Inc.
HM Revenue and Customs Approved Share Option Plan (2007)
Approved by HM Revenue and Customs on [Date] under Reference: [Number]
Adopted by the Board on [Date] as authorised by the Inverness Medical
Innovations Inc. 2001 Stock Option and Incentive Plan

     
Eversheds LLP
  Tel 0845 497 9797
Cloth Hall Court
  Fax 0845 498 4994
Infirmary Street
  Int +44 20 7497 9797
Leeds
  DX 12027 Leeds — 27
LS1 2JB
  www.eversheds.com

 

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

 

CONTENTS

          Rule       Page
1
2
3
4
5
6
7
8
9
10
11
  DEFINITIONS AND INTERPRETATION
GRANT OF OPTIONS
OPTION PRICE
PLAN LIMIT
RIGHTS OF EXERCISE AND LAPSE OF OPTIONS
EXERCISE OF OPTIONS
ADJUSTMENT OF OPTIONS
EXCHANGE OF OPTIONS
ADMINISTRATION
AMENDING THE PLAN
GENERAL   3
6
7
8
9
11
13
13
14
15
15

 

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

 

RULES OF THE INVERNESS MEDICAL INNOVATIONS INC HM REVENUE AND
CUSTOMS APPROVED OPTION PLAN (2007)

1.   DEFINITIONS AND INTERPRETATION   1.1   Definitions       The words and
expressions used in this Plan which have capital letters have the meanings set
out in this rule 1.1.

         
 
  “Appropriate Period”   the meaning given by paragraph 26 (3) of Schedule 4;
 
       
 
  “Associated Company”   in relation to the Company:

  (a)   any company which has Control of the Company;     (b)   any company
(other than a Participating Company) which is under the Control of any company
referred to in (i) above;

         
 
  “Board”   the board of directors for the time being of the Company or a duly
authorised committee of it;
 
       
 
  “Cause”   means fraud, embezzlement, material dishonesty, conviction of a
felony or crime involving moral turpitude, or a material breach or a material
failure to perform or a material negligence in the performance of the duties of
employment;
 
       
 
  “Close Company”   the meaning given by section 414 (1) of the Taxes Act as
varied by paragraph 9 (4) of Schedule 4;
 
       
 
  “the Company”   Inverness Medical Innovations Inc (registered no. 3391092
8100);
 
       
 
  “Control”   means the power of a person to secure:

  (a)   by means of the holding of shares or the possession of voting power in
or in relation to that or any other body corporate; or     (b)   by virtue of
any power conferred by the articles of association or other document regulating
that or any other body corporate, that the affairs of the first mentioned body
corporate are conducted in accordance with the wishes of that person;

         
 
  “Date of Grant”   with respect to an Option the date on which the Grantor
grants it under Rule 2.4;
 
       
 
  “Discretionary Share Option Plan”   a share option plan, other than a
savings-related share option plan, in which participation is at the discretion
of the grantor of options under that plan;

 

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

 

         
 
  “Eligible Employee”   any person who at the Date of Grant:

  (a)   is an employee or director of a Participating Company on terms which, in
either case, require him to devote substantially the whole of his working time
to his duties as such and, in the case of a director, no less than 25 hours per
week (excluding meal breaks); and     (b)   is not precluded from participating
in the Plan by paragraph 9 of Schedule 4;

         
 
  “Employee Tax Liability”   an income tax and/or employee’s national insurance
contributions liability arising as a result of or in connection with the
exercise of an Option in respect of which a company in the Group (or any other
person who, at the relevant time, is the employer of the Eligible Employee) is
obliged to account for such income tax and/or employee’s national insurance
contributions to HMRC
 
       
 
  “Exercise Price”   the total amount payable on the exercise of an Option,
whether in whole or in part, being an amount equal to the relevant Option Price
multiplied by the number of Shares in respect of which the Option is exercised;
 
       
 
  “Grantor”   in relation to an Option, the Person who granted it;
 
       
 
  “Group”   the Company and all Participating Companies for the time being or
where the context so requires any one or more of them
 
       
 
  “HMRC”   HM Revenue and Customs
 
       
 
  “Incumbent Director”   any duly elected member of the Board on the date this
Plan was approved, as well as any subsequently elected member of the Board if
such person’s election was approved by or such person was nominated for election
by either (a) a vote of at least a majority of the Incumbent Directors or (b) a
vote of at least a majority of the Incumbent Directors who are members of a
nominating committee comprised, in the majority, of Incumbent Directors;
provided that any person who initially joins the Board in connection with an
actual or threatened election contest or proxy solicitation on behalf of a
person other than the Board shall not be considered an Incumbent Director.
 
       
 
  “Jointly Owned Company”   the meaning given by paragraph 34 Schedule 4
 
       
 
  “Market Value”   in relation to a Share on any day its market value,
determined in accordance with Part VIII of the Taxation of Chargeable Gains Act
1992 and agreed in advance with HMRC Shares and Assets Valuation;
 
       
 
  “Material Interest”   the meaning given by paragraph 10 Schedule 4;

 

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

 

         
 
  “Member of a Consortium”   the meaning given by paragraph 36(2) Schedule 4;
 
       
 
  “Option”   a right to acquire Shares under the Plan which is either subsisting
or is proposed to be granted;
 
       
 
  “Option Certificate”   a certificate issued pursuant to Rule 2.4
 
       
 
  “Option Exercise Date”   the date when the exercise of an Option is effective
because it complies with Rules 6.2 and 6.3;
 
       
 
  “Option Price”   the price per Share at which a Participant may acquire Shares
on the exercise of an Option determined under Rule 3;
 
       
 
  “Participant”   any Eligible Employee to whom an Option has been granted, or
(where the context requires) his personal representatives;
 
       
 
  “Participating Company”   (a)     the Company; or

  (b)   any other company which is under the Control of the Company; or     (c)
  any other company which is a Subsidiary of the Company; or     (d)   any other
company which is a Jointly Owned Company of a company within paragraphs (a),
(b) or (c) above; or     (e)   any other company which is a Subsidiary of a
company within paragraph (d) above

         
 
      and is for the time being designated by the Board as a Participating
Company;
 
       
 
  “Person”   any individual, corporation, partnership, limited liability
company, trust or other entity of whatever nature;
 
       
 
  “Plan”   the Inverness Medical Innovations Inc HM Revenue and Customs Approved
Share Option Plan (2007) in its present form or as from time to time amended in
accordance with the Rules;
 
       
 
  “Rules”   these rules as amended from time to time;
 
       
 
  “Schedule 4”   Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003;
 
       
 
  “Share”   a fully paid share of common stock in the capital of the Company
which satisfies paragraphs 16 to 20 of Schedule 4;
 
       
 
  “Specified Anniversary”   in respect of an Option or any part of it, the date
or dates, specified by the Company at the Date of Grant, on which the Option (or
part of it) shall first become exercisable;

 

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

 

         
 
  “Subsidiary”   a company is a subsidiary of another company if:

  (a)   that other company:

  (i)   is a member of it and controls the composition of its board of
directors; or     (ii)   holds more than half in nominal value of its equity
share capital; or     (iii)   the first mentioned company is a subsidiary of any
company which is that other’s subsidiary;

         
 
  “Taxes Act”   the Income and Corporation Taxes Act 1988; and
 
       
 
  “Variation”   in relation to the equity share capital of the Company a
capitalisation issue, an offer or invitation made by way of rights, a
subdivision, a consolidation or reduction, or any other variation.

1.2   Interpretation       The headings in the Rules are for convenience and
should be ignored when construing them. Unless the context otherwise requires,
words in the singular include the plural and vice versa and words importing
either gender include both genders.       Reference in the Rules to any
statutory provisions are to those provisions as amended, extended or re-enacted
from time to time, and include any regulations or other subordinate legislation
made under them.   2.   GRANT OF OPTIONS   2.1   Grant of Options       The
Grantor may at its discretion, grant to any Eligible Employee an Option or
Options at the Option Price over such whole number of Shares as it decides.  
2.2   Period for granting Options       Options may be granted at any time that
the Grantor thinks appropriate.   2.3   Conditions to be satisfied on the
exercise of Options       An Option may be granted subject to such conditions as
the Grantor may decide being met before it can be exercised. Such conditions:

  2.3.1   must be objective and stated in writing at the Date of Grant and
approved in advance by HMRC;     2.3.2   may not be waived or amended by the
Grantor unless:

 

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

 

  2.3.3   an event occurs which causes the Board reasonably to consider that a
waiver of or amendment to the conditions would be a fairer measure of
performance; and     2.3.4   the Board reasonably considers that a waiver of or
amendment to the conditions would not make the conditions more difficult to
satisfy.

2.4   Manner of grant and payment for Options       An Option will be granted so
that it constitutes a binding contract between the Grantor and the Participant.
Each Participant will be given an Option Certificate as evidence of the grant of
an Option. There will be no payment for the grant of an Option.   2.5   An
Option is subject to the Rules but may be renounced       An Option is granted
incorporating and subject to the Rules. A Participant may renounce an Option, in
whole or in part, within 30 days following the Date of Grant and, to the extent
renounced, the Option will be treated as if it had never been granted.   2.6  
An Option may be granted so as to be exercisable in separate parts       An
Option may be granted so as to be first exercisable in stages, each of which
will occur on a different Specified Anniversary in respect of a specific number
of Shares. An Option granted under this Rule 2.6 shall be evidenced by a
separate Option Certificate for each stage, each such certificate shall state
the number of Shares which will become exercisable for that stage and the
Specified Anniversary on which they will normally become exercisable, unless
otherwise provided in the Rules. Where an Option has been granted in accordance
with this Rule 2.6, any reference in the Rules to the exercise, exercisability
or lapse of an Option will be read, where necessary, as relating to the exercise
or lapse of that Option in respect of the number of Shares and with the
Specified Anniversary referred to in each separate applicable Option
Certificate.   2.7   Options personal to Participants       An Option is
personal to the Participant to whom it is granted. It may not, nor may any
rights in respect of it, be transferred, assigned, charged or otherwise disposed
of to any Person other than, on the death of a Participant, when it may be
transmitted to his personal representatives.   3.   OPTION PRICE   3.1   The
Grantor’s decision       The Grantor will decide the Option Price of an Option
which will be stated at the Date of Grant.   3.2   Deciding the Option Price

 

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

 

    The Option Price cannot be less than the higher of:

  3.2.1   the Market Value of a Share as at the Date of Grant; and     3.2.2  
the nominal value of a Share, if the Shares are to be subscribed,

    but subject to any adjustment under Rule 7.   4.   PLAN LIMIT   4.1   Limit
imposed by HMRC       No option will be granted to an Eligible Employee if it
would, at the Date of Grant, result in:

  4.1.1   the total Market Value of the Shares (as calculated under Rule 3.2.1)
which the Eligible Employee could acquire on exercise of the Option; and    
4.1.2   the aggregate market values of the Shares which the Eligible Employee
could acquire on the exercise of any option(s) granted under the Plan and any
other Discretionary Share Option Plan approved by HMRC and established by the
Company or by an Associated Company, exceeding £30,000 or any other HMRC limit
applicable from time to time. In determining the limits in this Rule 4.1, no
account will be taken of any Shares where the right to acquire them was released
or has lapsed.

4.2   Time when Market Value is calculated       Under Rule 4.1, Market Value is
calculated as at the date when the Option is granted. 4.3 Grant of Options in
excess of limits       If an Option is granted on terms which do not comply with
Rule 4.1, the number of Shares over which that Option has been granted will be
reduced automatically to the largest lower number as would comply with the terms
of Rule 4.1.       An adjusted Option will take effect from the Date of Grant as
if it had been granted on the adjusted terms.   4.4   Adjustment to Shares to be
taken into account       Where Shares which have been issued under the Plan or
any other Discretionary Share Option Plan are to be taken into account for the
purposes of the limit in Rule 4.1 and a Variation has taken place between the
date of issue of those Shares and the date on which the limit is to be
calculated, then the number of Shares taken into account for the purposes of the
limit will be adjusted in the manner the Grantor considers appropriate to take
account of the Variation.

 

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

 

5.   RIGHTS OF EXERCISE AND LAPSE OF OPTIONS   5.1   General rules for exercise
      An Option may not be exercised at any time when a Participant has, or
within the preceding 12 months has had, a Material Interest in a Close Company
which is the Company, any company which has Control of the Company or a Member
of a Consortium which owns the Company.       An Option:

  5.1.1   cannot be exercised earlier than the Specified Anniversary of the Date
of Grant or any later date determined by the Grantor at the Date of Grant,
except as provided in Rule 5.2;     5.1.2   may only be exercised by a
Participant while he is a director or employee of a Participating Company or of
an Associated Company, except as provided in Rule 5.3;     5.1.3   may only be
exercised if any conditions imposed under Rule 2.3 and not waived have been
fulfilled to the satisfaction of the Grantor, other than following an exchange
of options under Rule 8.

5.2   Exercisability upon a change in Control of the Company

  5.2.1   Subject to Rule 5.3 below, an Option shall become fully exercisable,
without regard to any Specified Anniversary, immediately following:

  5.2.1.1   shareholder approval of the dissolution or liquidation of the
Company;     5.2.1.2   a Person obtaining Control of the Company through
acquisition of shares or voting rights which result in that Person holding more
than 50 per cent of either the Company’s shares or the combined voting rights of
the Company’s shares;     5.2.1.3   the completion of a consolidation or merger
of the Company, or a sale or other disposition of all or substantially all the
assets of the Company, unless at least 80% of the voting shares of the successor
entity arising from the relevant transaction would, immediately following the
transaction, be held by or on behalf of the same shareholders and in the same
proportions as those of the Company immediately before the transaction;    
5.2.1.4   there ceasing to be a majority of the Incumbent Directors on the Board
for any reason.

  5.2.2   For the purposes of Rule 5.2:

 

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

 

  5.2.2.1   a person will be deemed to have obtained Control of the Company if
he and others acting in concert with him have together obtained Control of it  
  5.2.2.2   a change of Control will not be taken to have occurred by reason
only that the Company has acquired its own shares with the result that any
person becomes entitled to 50 per cent or more of the combined voting power of
all the company’s shares.

5.3   Lapsing of Options       Options that are not exercisable as of the date
of the cessation of employment with a Participating Company or an Associated
Company will lapse as of the date of cessation of such employment. Options that
are otherwise exercisable by their terms will lapse, to the extent not
exercised, on the earliest of:

  5.3.1   the tenth anniversary of the Date of Grant;     5.3.2   the first
anniversary of the date of cessation of employment due to the death of the
Participant;     5.3.3   the first anniversary of the date of cessation of
employment due to the disability of the Participant (as determined by the
Grantor) or the expiry of any period of exercise specified under Rule 5.4,
provided that the death of the Participant during the period provided in this
Rule 5.3.3 shall extend such period until the first anniversary of the date of
death of the Participant or the date described in Rule 5.3.1, if earlier;    
5.3.4   the expiry of ninety days following the date of cessation of employment
for any reason other than death, disability (as determined by the Grantor) or
Cause, unless Rule 5.4 applies, in which case the Option will lapse on the
expiry of the period of exercise specified under Rule 5.4;     5.3.5  
immediately upon the cessation of employment of the Participant due to
termination for Cause;     5.3.6   immediately as of the date the Participant is
deprived of the legal or beneficial ownership of the Option by operation of law,
or does or omits to do anything which causes him to be so deprived or being
declared bankrupt; and     5.3.7   immediately as of the date the Participant
attempts to breach Rule 2.7.

 

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

 

5.4   Extension of period for exercise       If a Participant ceases to hold
office or employment in the circumstances referred to in Rule 5.3.3 or 5.3.4,
the Grantor may extend the period of exercise so that, as to any Option
otherwise exercisable on the date the Participant no longer held office or
employment, the exercisable portion of the Option will remain exercisable from
the date the Participant ceases to hold office or employment until the later of:

  5.4.1   the third anniversary of the Date of Grant; and     5.4.2   the third
anniversary of the last occasion (if any) on which the Participant exercised an
option under a Discretionary Share Option Plan approved by HMRC while holding
office or employment with a Participating Company or an Associated Company in
circumstances which qualified for relief from income tax.

    Except that, no Option shall be exercisable as of the tenth anniversary of
the Date of Grant, or as of the first anniversary of the date of death of the
Participant.   5.5   Cessation following pregnancy       For the purposes of
Rule 5.3.4, a woman who leaves employment because of pregnancy will be regarded
as having left employment on the day on which she indicates either that she does
not intend to return to work or that she will not be returning to work. If she
gives no indication, she will be treated as having left employment on the day
after the day on which maternity pay under the Employment Rights Act 1996 ceases
to be payable or, if later, any other date specified in the terms of her
employment, without her returning to work.   6.   EXERCISE OF OPTIONS   6.1  
Exercise in whole or in part       An Option may be exercised in whole or in
part.   6.2   Manner of exercise       To exercise an Option, the Participant
must deliver at the address specified in the notice of exercise:

  6.2.1   the Option Certificate covering at least all the Shares over which the
Option is then to be exercised;     6.2.2   the notice of exercise in the
prescribed form properly completed and signed by the Participant (or by his duly
authorised agent); and

 

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

 

  6.2.3   evidence to the satisfaction of the Company that it has received or
will receive as soon as practicable payment in full of the Exercise Price for
the Shares over which the Option is exercised.

6.3   Option Exercise Date       If any conditions must be fulfilled before an
Option may be exercised, the Option will not be validly exercised unless and
until the Grantor is satisfied that those conditions have been fulfilled.
Otherwise, the Option Exercise Date will be the date of receipt of the items
referred to in Rule 6.2.   6.4   Issue or transfer of Shares       Subject to
Rule 6.5, the Grantor will procure the delivery of any Shares to a Participant
(or his nominee) pursuant to the exercise of an Option within 30 days following
the Option Exercise Date.   6.5   Consents       The delivery of any Shares
under the Plan will be subject to obtaining any necessary approval or consent.  
6.6   Ranking of Shares       Shares acquired by a Participant under the Plan
will rank equally in all respects with the Shares then in issue, except that
they shall not rank for any right attaching to them by reference to a record
date preceding the Option Exercise Date.   6.7   If an Employee Tax Liability
arises on the exercise of an Option, then unless:

  6.7.1   the relevant Participant has indicated in the form of exercise that he
will make a payment to the Company of an amount equal to the Employee Tax
Liability; and     6.7.2   the Participant does, within 7 days of being notified
by the Company of the amount of the Employee Tax Liability, make such payment to
the Company;

    the Company may sell sufficient of the Shares resulting from the exercise of
the Option on behalf of the Participant and arrange payment to the member of the
Group (or other relevant person) on which the Employee Tax Liability falls of an
amount equal to the Employee Tax Liability out of the proceeds of sale by way of
reimbursement to the relevant member of the Group.   6.8   Unless determined
otherwise by the Grantor on or prior to the grant of an Option and specified as
such in the Option Certificate relating to such Option, it shall be a condition
of the exercise of an Option that the Participant is responsible for paying any
employer’s national insurance contributions payable as a result of or in
connection with the exercise of his Option and Rule 6.7 shall apply mutatis

 

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

 

    mutandis to such employer’s national insurance contributions as though the
references in that Rule to “Employee Tax Liability” were references to the
employer’s national insurance contributions due as a result of or in connection
with the exercise of the Option concerned.   7.   ADJUSTMENT OF OPTIONS   7.1  
Variation in equity share capital       If there is a Variation in the equity
share capital of the Company:

  7.1.1   the number and/or the nominal value of Shares over which an Option is
granted; and     7.1.2   the Option Price; and     7.1.3   where an Option has
been exercised but on the date of the Variation no Shares have been delivered
pursuant to that exercise, the number of Shares which may be delivered and the
price at which they may be acquired,

    will be adjusted in the manner the Grantor determines so that (as nearly as
may be without involving fractions of a Share or an Option Price calculated to
more than two decimal places) the Exercise Price will remain unchanged.   7.2  
Nominal value of Shares       Apart from under this Rule 7.2, no adjustment
under Rule 7.1 can reduce the Option Price to less than the nominal value of a
Share. Where an Option subsists over both issued and unissued Shares, an
adjustment may only be made if the reduction of the Option Price in respect of
both the issued and the unissued Shares can be made to the same extent. Any
adjustment made to the Option Price of Options over unissued Shares will only be
made if and to the extent that the Board is authorised to:

  7.2.1   capitalise from the reserves of the Company a sum equal to the amount
by which the nominal value of the Shares in respect of which the Option is
exercisable exceeds the adjusted Exercise Price; and     7.2.2   apply that sum
in paying up the Shares so that on exercise of the Option the Board will
capitalise that sum and apply it in paying up the Shares.

8.   EXCHANGE OF OPTIONS   8.1   The Acquiring Company       If any company
(“the Acquiring Company”):

 

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

 

  8.1.1   obtains Control of the Company as a result of making a general offer
to acquire:

  8.1.1.1   the whole of the issued ordinary share capital of the Company which
is made on condition such that if it is satisfied the Acquiring Company will
have Control of the Company; or     8.1.1.2   all the shares in the Company
which are of the same class as the Shares,

    in either case ignoring any shares which are already owned by it or a member
of the same group of companies; or

  8.1.2   obtains Control of the Company in pursuance of a compromise or
arrangement sanctioned by the court under section 425 of the Companies Act 1985;
or     8.1.3   becomes entitled to acquire shares under sections 428 to 430F of
that Act,

    any Participant may, at any time within the Appropriate Period, by
arrangement with the Acquiring Company, release any Option which has not lapsed
(“the Old Option”) in consideration of the grant to him of an Option (“the New
Option”) which (for the purposes of paragraph 26 of Schedule 4) is equivalent to
the Old Option but relates to shares in a different company (whether the
Acquiring Company itself or some other company falling within paragraph 16 of
Schedule 4).   8.2   The New Option       The New Option will not be regarded as
equivalent to the Old Option unless the conditions set out in paragraph 27 of
Schedule 4 are satisfied, but so that the provisions of the Plan will for this
purpose be construed as if the New Option were an option granted under the Plan
at the same time as the Old Option except for the purpose of the definition of
“Participating Company” in Rule 1.1, and as if the reference to Inverness
Medical Innovations Inc in the definition of the “Company” in Rule 1.1 were a
reference to the different company mentioned in Rule 8.1.   8.3   Exchange in
similar circumstances       The exchange of Options as permitted under this
Rule 8 may also apply on the occurrence of an event similar to any of those
described in Rules 8.1.1, 8.1.2 or 8.1.3 above, provided that HMRC shall have
first agreed to this.   9.   ADMINISTRATION   9.1   Administration of the Plan

 

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

 

    The Plan will be administered by the Grantor. The Grantor has full
authority, consistent with the Plan, to administer the Plan, including authority
to interpret and construe any provision of the Plan and to adopt any regulations
for administering the Plan and any documents it thinks necessary or appropriate.
The Grantor’s decision on any matter concerning the Plan will be final and
binding.   9.2   Costs of introducing and administering the Plan       The costs
of introducing and administering the Plan will be borne by the Company. However,
the Company may require any Participating Company to enter into an agreement
which obliges that Participating Company to reimburse the Company for any costs
borne by the Company, directly or indirectly, in respect of the Participating
Company’s officers or employees. The Company may also enter into a similar
agreement with any Associated Company.   10.   AMENDING THE PLAN   10.1   The
Board’s power to amend the Plan       Subject to the provisions of Rule 10, the
Board can at any time amend any of the provisions of the Plan in any respect.  
10.2   Participants’ approval       No amendment will be made under Rule 10.1
which would abrogate or adversely affect the subsisting rights of a Participant
unless it is made with the Participant’s consent.   10.3   HMRC approval      
While the Plan is to remain approved by HMRC, no amendment made after it has
been approved by HMRC will have effect until the amendment has been approved by
HMRC.   11.   GENERAL   11.1   Rights of Participants and Eligible Employees    
  Nothing in the Plan will give any officer or employee of any Participating
Company or Associated Company any right to participate in the Plan. The rights
and obligations of any individual under the terms of his office or employment
with a Participating Company or Associated Company will not be affected by his
participation in the Plan nor any right which he may have to participate under
it. A Participant holding an Option will not have any rights of a shareholder of
the Company with respect to that Option or the Shares subject to it.   11.2   No
rights to compensation or damages

 

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

 

    A Participant waives all and any rights to compensation or damages for the
termination of his office or employment with a Participating Company or
Associated Company for any reason whatsoever insofar as those rights arise or
may arise from his ceasing to have rights under or to be entitled to exercise
any Option under the Plan as a result of that termination or from the loss or
diminution in value of such rights or entitlements. Nothing in the Plan or in
any document executed under it will give any Person any right to continue in
employment or will affect the right of any Participating Company or any
Associated Company to terminate the employment of any Participant without
liability at any time, with or without Cause, or will impose any Participating
Company, the Grantor or their respective agents and employees any liability in
connection with the loss of a Participant’s benefits or rights on the exercise
of a discretion under the Plan for any reason as a result of the termination of
his employment.   11.3   The Benefits of Rule 11.1 and 11.2       The benefit of
Rules 11.1 and 11.2 is given for the Company, for itself and as trustee and
agent of all Participating Companies and Associated Companies. The Company will
hold the benefit of these Rules on trust and an agent for each of them and may
assign the benefit of this Rule 11.3 to any of them.   11.4   Constitutional
documents       Any Shares acquired on the exercise of Options shall be subject
to the constitutional documents of the Company.   11.5   Severability       The
invalidity or non-enforceability of one or more provisions of the Plan will not
affect the validity or enforceability of the other provisions of the Plan.  
11.6   Governing law       These Rules will be governed by and construed in
accordance with the law of the state of Delaware.