Exhibit 10.12

 

Description of OraSure Technologies, Inc.

Management Stock Option Award Guidelines

 

On February 4, 2003, the Company’s Board of Directors adopted Stock Option Award
Guidelines for the Company’s management (the “Option Guidelines”). The purpose
of the Option Guidelines is to establish a framework for granting stock options
in order to reward outstanding performance by the Company’s management team.
Employees covered by the Option Guidelines are at the director level and above,
and include all Company officers.

 

Awards under the Option Guidelines in any fiscal year will depend on an
employee’s achievement of individual performance objectives. Each employee’s
individual performance will be evaluated against his or her performance to
determine if that individual meets expectations, exceeds expectations or has
performed in an outstanding manner. Set forth below are annual award targets
assuming that the participating employees are evaluated as having met
expectations for the fiscal year in question:

 

Title

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

   Award Target
(No. of Shares)

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

Chief Executive Officer

   150,000

Executive Vice President

   60,000

Senior Vice President

   40,000

Vice President

   25,000

Director

   Up to 7,500

 

If an employee’s performance is evaluated to exceed expectations or to be
outstanding, the amount of that employee’s award could be up to 150% of the
applicable annual target set forth above. If an employee’s performance is
evaluated to be below expectations, his or her award could be 50-75% of the
applicable target set forth above. Any employee whose performance is evaluated
to be unsatisfactory would receive no stock option award.

 

Performance criteria for individual employees will be derived from the Company’s
corporate objectives for the applicable fiscal year, concerning financial
performance, strategic planning, research and development, business development,
regulatory affairs and quality control, manufacturing, engineering, information
systems, sales and marketing, human resources, investor relations matters and/or
such other objectives chosen by the Board or the Compensation Committee of the
Board in their sole discretion. Awards are expected to reflect a weighted
average measurement of an employee’s achievement of his or her individual
performance objectives.

 

Employees must be employed by the Company at the end of the fiscal year in
question and at the time of grant in order to receive a stock option award, and
awards will be adjusted on a pro rata basis to the extent any employee is
employed for only a portion of a year. The Chief Executive Officer will
recommend individual awards for all covered employees (other than the Chief
Executive Officer) to the Compensation Committee based on an assessment of each
individual’s performance against his or her applicable performance objectives.
The Compensation Committee may approve or disapprove any recommended option
award in whole or in part in its sole discretion. The Compensation Committee
will evaluate the performance of the Chief Executive Officer and determine an
appropriate option award in accordance with the Option Guidelines and such
evaluation.

 

The Compensation Committee shall have the right in its sole discretion to reject
any or all of the recommended bonus awards, even if any and all applicable
performance criteria have been satisfied, based on the business conditions of
the Company at or immediately after the end of the fiscal year in question.