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


 

















 


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


 


8

















 


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;


 


9

















 


(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:


 


10

















 


(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


 


11

















 


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. 


 


12

















 


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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


13

















 


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,


 


14

















 


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

















 


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.


 


16

















 


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.


 


17