Exhibit 10.31
INVERNESS MEDICAL INNOVATIONS, INC.
2001 STOCK OPTION AND INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR U.S. EXECUTIVES

 

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NON-QUALIFIED STOCK OPTION AGREEMENT
FOR U.S. EMPLOYEES
UNDER THE
INVERNESS MEDICAL INNOVATIONS, INC.
2001 STOCK OPTION AND INCENTIVE PLAN

         
Name of Optionee:
       
Number of Option Shares:
 
 
   
 
       
Option Exercise Price Per Share:
       
 
       
Grant Date:
       
 
       
Expiration Date:
       
 
       

     Pursuant to the Inverness Medical Innovations, Inc. 2001 Stock Option and
Incentive Plan (the “Plan”) as amended through the date hereof, Inverness
Medical Innovations, Inc. (the “Company”) hereby grants to the Optionee named
above an option (the “Stock Option”) to purchase, on or prior to the Expiration
Date specified above, all or part of the number of Option Shares of Common
Stock, par value $0.001 per share (the “Stock”) of the Company specified above
at the Option Exercise Price per Share specified above subject to the terms and
conditions set forth herein (the “Agreement”) and in the Plan.
     1. Exercisability Schedule. No portion of this Stock Option may be
exercised until such portion shall have become exercisable. Except as set forth
below, and subject to the discretion of the Administrator (as defined in
Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this
Stock Option shall become exercisable with respect to the following number of
Option Shares on the dates indicated, so long as the Optionee remains in
employment with the Company or a Subsidiary (as defined in the Plan) on the
Exercisability Date:

              Number of   Total Number of Exercisability   Option Shares First  
Option Shares Date   Becoming Exercisable   Exercisable
                    
                       (25%)                        (25%)
                    
                       (25%)                        (50%)
                    
                       (25%)                        (75%)
                    
                       (25%)                        (100%)  

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     Once exercisable, this Stock Option shall continue to be exercisable at any
time or times prior to the close of business on the Expiration Date, subject to
the provisions of this Agreement and the Plan.
     2. Manner of Exercise
          (a) The Optionee may exercise this Stock Option only in the following
manners: from time to time, on or prior to the Expiration Date of this Stock
Option, the Optionee may give notice of his or her election to purchase some or
all of the Option Shares purchasable by means of (i) a written notice to the
Administrator or (ii) an electronic notice to the Administrator or other
authorized representative of the Company (including a third-party administrator
or broker designated by the Company). Whether written or electronic, such notice
shall specify the number of Option Shares to be purchased and shall be in a form
approved by the Administrator.
     Payment of the Option Exercise Price for the Option Shares may be made by
one or more of the following methods: (i) in cash, by certified or bank check or
other instrument acceptable to the Administrator; (ii) through the delivery (or
attestation to the ownership) of shares of Stock that have been purchased by the
Optionee on the open market or that have been “paid for” and beneficially owned
by the Optionee for at least six months and are not then subject to any
restrictions under any Company plan; (iii) by the Optionee delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the Option Exercise Price, provided
that in the event the Optionee chooses to pay the Option Exercise Price as so
provided, the Optionee and the broker shall comply with such procedures and
enter into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment procedure; or
(iv) a combination of (i), (ii), and (iii) above. Payment instruments will be
received subject to collection.
     The delivery of certificates representing the Option Shares will be
contingent upon the Company’s receipt from the Optionee of full payment for the
Option Shares, as set forth above and any agreement, statement or other evidence
that the Company may require to satisfy itself that the issuance of Stock to be
purchased pursuant to the exercise of Stock Options under the Plan and any
subsequent resale of the shares of Stock will be in compliance with applicable
laws and regulations. In the event the Optionee chooses to pay the Option
Exercise Price by previously-owned shares of Stock through the attestation
method, the number of shares of Stock transferred to the Optionee upon the
exercise of the Stock Option shall be net of the Shares attested to.
          (b) Certificates for shares of Stock purchased upon exercise of this
Stock Option shall be issued and delivered to the Optionee upon compliance to
the satisfaction of the Administrator with all requirements under applicable
laws or regulations in connection with such issuance and with the requirements
of this Agreement and of the Plan. The determination of the Administrator as to
such compliance shall be final and binding on the Optionee. The Optionee shall
not be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to this Stock Option unless and until
this Stock Option shall have been exercised pursuant to the terms of this
Agreement, the Company shall have issued and

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delivered the shares to the Optionee, and the Optionee’s name shall have been
entered as the stockholder of record on the books of the Company. Thereupon, the
Optionee shall have full voting, dividend and other ownership rights with
respect to such shares of Stock.
          (c) The minimum number of shares with respect to which this Stock
Option may be exercised at any one time shall be 10 shares, unless the number of
shares with respect to which this Stock Option is being exercised is the total
number of shares subject to exercise under this Stock Option at the time.
          (d) Notwithstanding any other provision of this Agreement or of the
Plan, no portion of this Stock Option shall be exercisable after the Expiration
Date.
     3. Termination of Employment. If the Optionee’s employment by the Company
or a Subsidiary is terminated, no additional Option Shares shall become
exercisable following the date of termination and the period within which to
exercise the exercisable portion of the Stock Option may be subject to earlier
termination as set forth below.
          (a) Termination Due to Death. If the Optionee’s employment terminates
by reason of death, any Stock Option held by the Optionee shall become fully
exercisable and may thereafter be exercised by the Optionee’s legal
representative or legatee for a period of twelve months from the date of death
or until the Expiration Date, if earlier.
          (b) Termination Due to Disability. If the Optionee’s employment
terminates by reason of disability (as determined by the Administrator), any
Stock Option held by the Optionee shall become fully exercisable and may
thereafter be exercised by the Optionee for a period of twelve months from the
date of termination or until the Expiration Date, if earlier. The death of the
Optionee during the twelve-month period provided in this Section 3(b) shall
extend such period for another twelve months from the date of death or until the
Expiration Date, if earlier.
          (c) Termination for Cause. If the Optionee’s employment terminates for
Cause, any Stock Option held by the Optionee shall terminate immediately and be
of no further force and effect. For purposes of this Agreement, “Cause” shall
mean: (i) any material breach by the Optionee of any agreement between the
Optionee and the Company or a Subsidiary; (ii) the conviction of or a plea of
nolo contendere by the Optionee to a felony or a crime involving moral
turpitude; or (iii) any material misconduct or willful and deliberate
non-performance (other than by reason of disability) by the Optionee of the
Optionee’s duties to the Company or a Subsidiary. If it is discovered that an
Optionee’s employment could have been terminated for Cause but such information
was not known by the Company, the date of termination of employment shall be
deemed to be the date on which the act constituting Cause took place. In the
event that an Optionee has exercised a Stock Option after he or she has
committed an act constituting Cause, the Administrator may take action to
recover the Option Shares and any gains made by the Optionee in respect of such
Option Shares.
          (d) Other Termination. If the Optionee’s employment terminates for any
reason other than death, disability or Cause, and unless otherwise determined by
the Administrator, any Stock Option held by the Optionee may be exercised, to
the extent

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exercisable on the date of termination, for a period of three months from the
date of termination or until the Expiration Date, if earlier; provided that if
the Optionee’s employment terminates by reason of voluntary retirement (as
determined by the Administrator) after the age of 58 then Stock Options
exercisable on the date of termination may be exercised for a period of twelve
months from the date of termination or until the Expiration Date, if earlier.
Any Stock Option that is not exercisable at such time shall terminate
immediately and be of no further force or effect.
     The Administrator’s determination of the reason for termination of the
Optionee’s employment shall be conclusive and binding on the Optionee and his or
her representatives or legatees.
     The applicable period of post-service exercisability in effect pursuant to
the foregoing provisions of this Section 3 shall automatically be extended by an
additional period of time equal in duration to any interval within such
post-service exercise period during which the exercise of this Stock Option
cannot be effected solely because of the condition set forth in Section 5 below,
but in no event shall such an extension result in the continuation of this Stock
Option beyond the Expiration Date.
     4. Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Stock Option shall be subject to and governed by all the terms and
conditions of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.
     5. Securities Law Compliance. Notwithstanding anything to the contrary
contained herein, the Stock Option may not be exercised unless the shares of
Stock issuable upon exercise of the Stock Option are then registered under the
United States Securities Act of 1933, as amended (the “Act”) or, if such shares
are not then registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Act.
     6. Transferability. This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution. This
Stock Option is exercisable, during the Optionee’s lifetime, only by the
Optionee, and thereafter, only by the Optionee’s legal representative or
legatee. Notwithstanding the foregoing, to the extent that any portion of this
Stock Option exceeds the $100,000 limitation described in Section 422(d) of the
Internal Revenue Code of 1986, as amended (the “Code”), such portion shall be
deemed a non-qualified Stock Option and may be transferred, upon approval of the
Administrator following submission of a petition for such transfer from the
Optionee to the Administrator and the written agreement of the proposed
transferee to be bound by the terms of the Plan and this Agreement, to the
Optionee’s spouse, children (natural or adopted) or stepchildren, a trust for
the sole benefit of one or more such family members of which the Optionee is the
settlor, or a family limited partnership or family limited liability company of
which the limited partners or members, as the case may be, consist solely of one
or more such family members.

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     7. Tax Withholding.
          (a) Regardless of any action the Company or the Optionee’s employer
(the “Employer”) takes with respect to any or all income tax (including federal,
state or local tax), social insurance contributions, payroll tax, payment on
account or other tax-related withholding (“Tax-Related Items”), the Optionee
acknowledges that the ultimate liability for all Tax-Related Items legally due
by him or her is and remains the Optionee’s responsibility and that the Company
and/or the Employer (1) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of the Stock
Option, including, but not limited to, the grant, vesting or exercise of the
Stock Option, the issuance of the shares of Stock subject to the Stock Option,
the subsequent sale of shares of Stock thus issued and the receipt of any
dividends; and (2) do not commit to and are under no obligation to structure the
terms of the grant or any aspect of the Stock Option to reduce or eliminate the
Optionee’s liability for Tax-Related Items. Further, if the Optionee has become
subject to tax in more than one jurisdiction between the date of grant and the
date of any relevant taxable event, the Optionee acknowledges that the Company
and/or the Employer (or former employer, as applicable) may be required to
withhold or account for Tax-Related Items in more than one jurisdiction.
          (b) The Optionee shall, not later than the date of the taxable event
under applicable law, pay to the Company or make arrangements satisfactory to
the Administrator to satisfy any Tax-Related Items on account of such taxable
event. The Optionee authorizes the Company and/or the Employer, at their
discretion, to satisfy the obligations with respect to all Tax-Related Items
legally payable by the Optionee by one or a combination of the following means:
(i) withholding from shares of Stock to be issued, provided that the Company
only withholds the number of shares of Stock necessary to satisfy the minimum
statutory withholding obligation, or such other amount as may be necessary to
avoid adverse accounting treatment; (ii) withholding from the Optionee’s wages
or other cash compensation paid to the Optionee by the Company and/or the
Employer; (iii) arranging for the sale of shares of Stock issued upon exercise
of the Stock Option (on the Optionee’s behalf and at the Optionee’s direction
pursuant to this authorization); or (iv) withholding from the proceeds of the
sale of shares of Stock issued upon exercise of the Stock Option. If the
obligation for Tax-Related Items is satisfied by withholding from shares of
Stock to be issued, the Optionee is deemed to have been issued the full number
of shares of Stock subject to the Stock Option, notwithstanding that a number of
the shares of Stock are held back solely to satisfy the Tax-Related Items due as
a result of any aspect of the Stock Option.
          (c) The Optionee shall pay to the Company or the Employer any amount
of Tax-Related Items that the Company or the Employer may be required to
withhold as a result of the Optionee’s participation in the Plan to the extent
that such amount cannot be satisfied by the means set forth above in subsection
(b). The Company may refuse to deliver the shares of Stock if Optionee fails to
comply with his or her obligations in connection with the Tax-Related Items.

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     8. Miscellaneous.
          (a) Notice hereunder shall be given to the Company at its principal
place of business, and shall be given to the Optionee at the address set forth
below, or in either case at such other address as one party may subsequently
furnish to the other party in writing.
          (b) This Stock Option and the Optionee’s participation in the Plan do
not confer upon the Optionee any rights with respect to continuance of
employment by the Employer, the Company or any Subsidiary, and shall not
interfere with the ability of the Employer to terminate the Optionee’s
employment relationship at any time.
          (c) This Stock Option is not intended to be an incentive stock option
as defined in Section 422 of Code.
     9. Code Section 409A. It is the intent that the grant, vesting and exercise
of this Stock Option shall be exempt from the requirements of Section 409A of
the Code, and any ambiguities herein will be interpreted to so comply. The
Company reserves the right, to the extent the Company deems necessary or
advisable in its sole discretion, to unilaterally amend or modify this Agreement
as may be necessary to ensure that this Stock Option qualifies for the exemption
from, or complies with the requirements of, Section 409A of the Code; provided,
however, that the Company makes no representation that this Stock Option will be
exempt from or will comply with Section 409A of the Code, and makes no
undertaking to preclude Section 409A of the Code from applying to this Stock
Option or to ensure that it complies with Section 409A of the Code.
     10. No Advice Regarding Grant. The Company is not providing any tax, legal
or financial advice, nor is the Company making any recommendations regarding the
Optionee’s participation in the Plan, or the acquisition or sale of the
underlying shares of Stock. The Optionee is hereby advised to consult with his
or her own personal tax, legal and financial advisors regarding his or her
participation in the Plan before taking any action related to the Plan.
     11. Electronic Delivery and Acceptance. The Company may, in its sole
discretion, decide to deliver any documents related to the Stock Option or
future options granted under the Plan by electronic means or request the
Optionee’s consent to participate in the Plan by electronic means. The Optionee
hereby consents to receive such documents by electronic delivery and agrees to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or a third party designated by the Company.
     12. Severability. The provisions of this Agreement are severable and if any
one or more provisions are determined to be illegal or otherwise unenforceable,
in whole or in part, the remaining provisions shall nevertheless be binding and
enforceable.
     13. Imposition of Other Requirements. The Company reserves the right to
impose other requirements on the Stock Option and any shares of Stock acquired
under the Plan, to the extent the Company determines it is necessary or
advisable in order to comply with local law or facilitate the administration of
the Plan, and to require the Optionee to sign any additional agreements or
undertakings that may be necessary to accomplish the foregoing.

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     14. Governing Law and Venue.
          (a) The Stock Option granted hereunder and the provisions of this
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware, applied without regard to conflict of law principles, as
provided in Section 18 of the Plan.
          (b) For purposes of litigating any dispute that may arise from the
Stock Option granted hereunder or this Agreement, the parties hereby submit and
consent to the jurisdiction of the Commonwealth of Massachusetts, and agree that
any such litigation shall be conducted only in the courts of Middlesex County,
Massachusetts, or the federal courts for the United States for the District of
Massachusetts, where this Agreement is made and/or to be performed.

             
 
  For:   INVERNESS MEDICAL
INNOVATIONS, INC.    
 
           
 
  By:        
 
     
 
Title: Treasurer    

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

         
 
 
 
Optionee’s Signature    
 
       
 
  Optionee’s name and address:    
 
       
 
       
 
       
 
       
 
       
 
       

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