Document:

exv10w4

 

EXHIBIT 10.4

2000 EQUITY PARTICIPATION PLAN

STOCK OPTION AGREEMENT

          THIS AGREEMENT, dated the Grant Date set forth on Exhibit A hereto, (the terms of which are
hereby incorporated by reference and made a part of this Agreement) is made by and between
Gen-Probe Incorporated, a Delaware corporation, hereinafter referred to as the “Company,” and the
Non-Employee Director identified on Exhibit “A” and hereinafter referred to as “Optionee.”

          WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase shares of its
Common Stock, par value $0.0001 per share; and

          WHEREAS, the Company wishes to carry out The 2000 Equity Participation Plan of Gen-Probe
Incorporated (the “Plan”) (the terms of which are hereby incorporated by reference and made a part
of this Agreement); and

          WHEREAS, the Board has determined that it would be to the advantage and best interest of the
Company and its stockholders to grant the Stock Option (the “Option”) provided for herein to the
Optionee as an inducement to enter into or remain in the service of the Company and as an incentive
during such service, and has advised the Company thereof and instructed the undersigned officer to
issue said Option.

          NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties hereto do hereby
agree as follows:

ARTICLE I

DEFINITIONS

          1.1 General. Wherever the following terms are used in this Agreement they shall have
the meanings specified below, unless the context clearly indicates otherwise.

          1.2 Board. “Board” shall mean the Board of Directors of the Company.

          1.3 Cause. “Cause” shall mean (a) the commission by the Optionee of a felony or the
perpetration by the Optionee of an act of fraud, dishonesty, or misrepresentation against, or
breach of fiduciary duty toward, the Company or a Subsidiary or (b) any willful act or omission by
the Optionee which is injurious in any material respect to the financial condition or business
reputation of the Company or a Subsidiary.

          1.4 Code. “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time.

          1.5 Committee. “Committee” shall mean the Compensation Committee of the Board, or a
subcommittee of the Board, appointed as provided in Section 7.1 of the Plan.

          1.6 Common Stock. “Common Stock” shall mean the Common Stock of the Company, par
value $0.0001 per share.

 

 

          1.7 Company. “Company” shall mean Gen-Probe Incorporated, a Delaware corporation.

          1.8 Director. “Director” shall mean a member of the Board. “Director” shall include
both a member of the Board who is an Employee and a “Non-Employee Director” (as defined in the
Plan).

          1.9 Employee. “Employee” shall mean any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Company, or of any Subsidiary.

          1.10 Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.

     1.11 Fair Market Value. Fair Market Value. “Fair Market Value” shall mean, as of any
date, the value of the Common Stock determined as follows:

     (a) If the Common Stock is listed on any established stock exchange or a national market
system, the Fair Market Value of a share of Common Stock shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such exchange or system (or the
exchange or system with the greatest volume of trading in the Common Stock) for such date, or if no
bids or sales were reported for such date, then the closing sales price (or the closing bid, if no
sales were reported) on the trading date immediately prior to such date during which a bid or sale
occurred, in each case, as reported by The Nasdaq Stock Market or such other source as the Board
deems reliable.

     (b) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.

          1.12 Option. “Option” shall mean the Stock Option granted under this Agreement and
Article IV of the Plan.

          1.13 Optionee. “Optionee” shall mean the Non-Employee Director granted the Option
under this Agreement and the Plan.

          1.14 Plan. “Plan” shall mean The 2000 Equity Participation Plan of Gen-Probe
Incorporated.

          1.15 Retirement. “Retirement” shall mean the Optionee’s resignation after the
Optionee has attained age 60 and completed ten (10) or more years of employment with the Company
and the Subsidiaries.

          1.16 Secretary. “Secretary” shall mean the Secretary of the Company.

          1.17 Securities Act. “Securities Act” shall mean the Securities Act of 1933, as
amended from time to time.

          1.18 Subsidiary. “Subsidiary” shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last

 

 

corporation in the unbroken chain then 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.

          1.19 Termination of Directorship. “Termination of Directorship” shall mean the time
when the Optionee cases to be a Director for any reason, including, but not by way of limitation, a
termination by resignation, removal, failure to be reelected, death, disability or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship of the Optionee.

ARTICLE II

GRANT OF OPTION

          2.1 Grant of Option. In consideration of the Optionee’s agreement to remain in the
employ of the Company or its Subsidiaries and for other good and valuable consideration, effective
as of Date of Grant set forth on Exhibit A hereto, the Company irrevocably grants to the Optionee
the option to purchase any part or all of an aggregate of the number of shares of Common Stock set
forth on Exhibit “A”, upon the terms and conditions set forth in this Agreement.

          2.2 Purchase Price. The purchase price of the shares of Common Stock subject to the
Option per share shall be as set forth on Exhibit A hereto, without commission or other charge.

          2.3 Consideration to the Company. In consideration of the granting of the Option by
the Company, the Optionee agrees to render faithful and efficient services as a Director. Nothing
in the Plan or this Agreement shall confer upon the Optionee any right to continue as a Director.

ARTICLE III

PERIOD OF EXERCISABILITY

          3.1 Commencement of Exercisability.

          (a) Subject to Sections 3.3 and 5.11, the Option shall become exercisable in such amounts and
at such times as are set forth in Exhibit “A” hereto.

          (b) No portion of the Option which has not become exercisable at Termination of Directorship
shall thereafter become exercisable, except as may be otherwise provided by the Board.

          3.2 Duration of Exercisability. The installments provided for in Section 3.1(a) and
Exhibit “A” hereto are cumulative. Each such installment which becomes exercisable pursuant to
Section 3.1 shall remain exercisable until it becomes unexercisable under Section 3.3.

          3.3 Expiration of Option. The Option may not be exercised to any extent by anyone
after the first to occur of the following events:

 

 

          (a) The expiration of ten (10) years from the Date of Grant; or

          (b) The expiration of thirty (30) days following the date of the Optionee’s Termination of
Directorship, unless such Termination of Directorship occurs by reason of the Optionee’s discharge
for Cause, or by reason of the Optionee’s death, Retirement or disability (within the meaning of
Section 22(e)(3) of the Code); or

          (c) The expiration of one (1) day following the date of the Optionee’s Termination of
Directorship by reason of the Optionee’s discharge for Cause; or

          (d) The expiration of six (6) months following the date of the Optionee’s Termination of
Directorship by reason of the Optionee’s death or disability (within the meaning of Section
22(e)(3) of the Code); or

          (e) The expiration of one (1) year following the date of the Optionee’s Termination of
Directorship by reason of the Optionee’s Retirement.

ARTICLE IV

EXERCISE OF OPTION

          4.1 Person Eligible to Exercise. Subject to Section 5.2, during the lifetime of the
Optionee, only the Optionee may exercise the Option or any portion thereof. After the death of the
Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by the Optionee’s personal representative or by any
person empowered to do so under the Optionee’s will or under the then applicable laws of descent
and distribution.

          4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior to the time when
the Option or portion thereof becomes unexercisable under Section 3.3; provided,
however, that each partial exercise shall be for not less than ten (10) shares and shall be
for whole shares only.

          4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or the Secretary’s office of all of the following
prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3:

          (a) An Exercise Notice in writing signed by the Optionee or the other person then entitled to
exercise the Option or portion thereof, stating that the Option or portion thereof is thereby
exercised, such notice complying with all applicable rules established by the Board. Such notice
shall be substantially in the form attached as Exhibit “B” (or such other form as is prescribed by
the Board); and

     (b) (i) Full payment (in cash or by check) for the shares with respect to which the
Option or portion thereof is exercised, to the extent permitted under applicable laws; or

 

 

          (ii) With the consent of the Board, such payment may be made, in whole or in part,
through the delivery of shares of Common Stock which have been owned by the Optionee for at
least six months, duly endorsed for transfer to the Company with a Fair Market Value on the
date of delivery equal to the aggregate exercise price of the Option or exercised portion
thereof; or

          (iii) To the extent permitted under applicable laws, through the delivery of a notice
that the Optionee has placed a market sell order with a broker with respect to shares of
Common Stock then issuable upon exercise of the Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price, provided, that payment of such proceeds
is then made to the Company upon settlement of such sale; or

          (iv) With the consent of the Board, any combination of the consideration provided in the
foregoing subparagraphs (i), (ii) and (iii); and

          (c) A bona fide written representation and agreement, in such form as is prescribed by the
Board, signed by the Optionee or other person then entitled to exercise such Option or portion
thereof, stating that the shares of Common Stock are being acquired for the Optionee’s own account,
for investment and without any present intention of distributing or reselling said shares or any of
them except as may be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to exercise such Option or portion
thereof will indemnify the Company against and hold it free and harmless from any loss, damage,
expense or liability resulting to the Company if any sale or distribution of the shares by such
person is contrary to the representation and agreement referred to above. The Board may, in its
absolute discretion, take whatever additional actions it deems appropriate to ensure the observance
and performance of such representation and agreement and to effect compliance with the Securities
Act and any other federal or state securities laws or regulations. Without limiting the generality
of the foregoing, the Board may require an opinion of counsel acceptable to it to the effect that
any subsequent transfer of shares acquired on an Option exercise does not violate the Securities
Act, and may issue stop-transfer orders covering such shares. Share certificates evidencing Common
Stock issued on exercise of the Option shall bear an appropriate legend referring to the provisions
of this subsection (c) and the agreements herein. The written representation and agreement
referred to in the first sentence of this subsection (c) shall, however, not be required if the
shares to be issued pursuant to such exercise have been registered under the Securities Act, and
such registration is then effective in respect of such shares; and

          (d) Full payment to the Company (or other employer corporation) of all amounts which, under
federal, state or local tax law, it is required to withhold upon exercise of the Option. With the
consent of the Board, (i) shares of Common Stock owned by the Optionee for at least six months duly
endorsed for transfer or (ii) shares of Common Stock issuable to the Optionee upon exercise of the
Option, having a Fair Market Value at the date of Option exercise equal to the statutory minimum
sums required to be withheld, may be used to make all or part of such payment; and

 

 

          (e) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by
any person or persons other than the Optionee, appropriate proof of the right of such person or
persons to exercise the Option.

          4.4 Conditions to Issuance of Stock Certificates. The shares of Common Stock
deliverable upon the exercise of the Option, or any portion thereof, may be either previously
authorized but unissued shares or issued shares which have then been reacquired by the Company.
Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of Common Stock purchased upon the exercise of
the Option or portion thereof prior to fulfillment of all of the following conditions:

          (a) The admission of such shares to listing on all stock exchanges on which such Common Stock
is then listed; and

          (b) The completion of any registration or other qualification of such shares under any state
or federal law or under rulings or regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Board shall, in its absolute discretion, deem
necessary or advisable; and

          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Board shall, in its absolute discretion, determine to be necessary or advisable;
and

          (d) The receipt by the Company of full payment for such shares, including payment of all
amounts which, under federal, state or local tax law, the Company (or other employer corporation)
is required to withhold upon exercise of the Option; and

          (e) The lapse of such reasonable period of time following the exercise of the Option as the
Board may from time to time establish for reasons of administrative convenience.

          4.5 Rights as Stockholder. The holder of the Option shall not be, nor have any of the
rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until certificates representing such shares shall
have been issued by the Company to such holder.

ARTICLE V

OTHER PROVISIONS

          5.1 Administration. The Board shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and application of the
Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions
taken and all interpretations and determinations made by the Board in good faith shall be final and
binding upon the Optionee, the Company and all other interested persons. No member of the Board
shall be personally liable for any action, determination or interpretation made in good faith with
respect to the Plan, this Agreement or the Option. In its absolute discretion, the Board

 

 

may at any time and from time to time exercise any and all rights and duties of the Board
under the Plan and this Agreement.

          5.2 Option Not Transferable.

          (a) The Option may not be sold, pledged, assigned or transferred in any manner other than by
will or the laws of descent and distribution or, subject to the consent of the Board, pursuant to a
“DRO” (as defined in the Plan), unless and until the Option has been exercised, or the shares
underlying such Option have been issued, and all restrictions applicable to such shares have
lapsed. Neither the Option nor any interest or right therein shall be liable for the debts,
contracts or engagements of the Optionee or his or her successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect, except to the extent
that such disposition is permitted by the preceding sentence.

          (b) During the lifetime of the Optionee, only the Optionee may exercise the Option (or any
portion thereof), unless it has been disposed of with the consent of the Board pursuant to a DRO.
After the death of the Optionee, any exercisable portion of an Option may, prior to the time when
such portion becomes unexercisable under the Plan or the Option Agreement, be exercised by the
Optionee’s personal representative or by any person empowered to do so under the deceased
Optionee’s will or under the then applicable laws of descent and distribution.

          (c) Notwithstanding the foregoing provisions of this Section 5.2 of the Plan, and subject to
the requirements of Section 260.140.41 of Title 10 of the California Code of Regulations (to the
extent applicable), if designated as a Non-Qualified Stock Option, the Option may be transferred by
the Optionee, in writing and with prior written notice to the Board, to any one or more Permitted
Transferees (as defined below), subject to the following terms and conditions: (i) the Option, as
transferred to a Permitted Transferee, shall not be assignable or transferable by the Permitted
Transferee other than by will or the laws of descent and distribution; (ii) the Option, as
transferred to a Permitted Transferee, shall continue to be subject to all the terms and conditions
of the Option as applicable to the Optionee (other than the ability to further transfer the
Option); and (iii) the Optionee and the Permitted Transferee shall execute any and all documents
requested by the Board, including, without limitation documents to (A) confirm the status of the
transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the
transfer under applicable federal and state securities laws and (C) evidence the transfer. For
purposes of this subsection (c), “Permitted Transferee” shall mean, with respect to the Optionee,
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the Optionee’s household (other
than a tenant or employee), a trust in which these persons (or the Optionee) control the management
of assets, and any other entity in which these persons (or the Optionee) own more than fifty
percent (50%) of the voting interests, or any other transferee specifically approved by the
Administrator after taking into account any state or federal tax or securities laws applicable to
transferable Non-Qualified Stock Options.

 

 

          5.3 Lock-Up Period. The Optionee hereby agrees that, if so requested by the Company
or any representative of the underwriters (the “Managing Underwriter”) in connection with any
registration of the offering of any securities of the Company under the Securities Act, the
Optionee shall not sell or otherwise transfer any shares of Common Stock or other securities of the
Company during such period as may be requested in writing by the Managing Underwriter and agreed to
in writing by the Company (which period shall not be longer than 180 days) (the “Market Standoff
Period”) following the effective date of a registration statement of the Company filed under the
Securities Act; provided, however, that such restriction shall apply only to the
first registration statement of the Company to become effective under the Securities  Act
that includes securities to be sold on behalf of the Company to the public in an underwritten
public offering under the Securities Act.

          5.4 Restrictive Legends and Stop-Transfer Orders.

          (a) The share certificate or certificates evidencing the shares of Common Stock purchased
hereunder shall be endorsed with any legends that may be required by state or federal securities
laws.

          (b) The Optionee agrees that, in order to ensure compliance with the restrictions referred to
herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.

          (c) The Company shall not be required: (i) to transfer on its books any shares of Common
Stock that have been sold or otherwise transferred in violation of any of the provisions of this
Agreement, or (ii) to treat as owner of such shares of Common Stock or to accord the right to vote
or pay dividends to any purchaser or other transferee to whom such shares shall have been so
transferred.

          5.5 Shares to Be Reserved. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will be sufficient to
satisfy the requirements of this Agreement.

          5.6 Notices. Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of the Secretary, and any notice to be given to the
Optionee shall be addressed to the Optionee at the address given beneath the Optionee’s signature
hereto. By a notice given pursuant to this Section 5.6, either party may hereafter designate a
different address for notices to be given to that party. Any notice which is required to be given
to the Optionee shall, if the Optionee is then deceased, be given to the Optionee’s personal
representative if such representative has previously informed the Company of such representative’s
status and address by written notice under this Section 5.6. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with
postage prepaid) in a post office or branch post office regularly maintained by the United States
Postal Service.

          5.7 Titles. Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

 

 

          5.8 Stockholder Approval. The Plan will be submitted for approval by the Company’s
stockholders within twelve (12) months after the date the Plan was initially adopted by the Board.
The Option may not be exercised to any extent by anyone prior to the time when the Plan is approved
by the stockholders, and if such approval has not been obtained by the end of said twelve month
period, the Option shall thereupon be canceled and become null and void.

          5.9 Notification of Disposition. If this Option is designated as an Incentive Stock
Option, the Optionee shall give prompt notice to the Company of any disposition or other transfer
of any shares of stock acquired under this Agreement if such disposition or transfer is made (a)
within two (2) years from the Date of Grant with respect to such shares or (b) within one (1) year
after the transfer of such shares to him. Such notice shall specify the date of such disposition
or other transfer and the amount realized, in cash, other property, assumption of indebtedness or
other consideration, by the Optionee in such disposition or other transfer.

          5.10 Construction. This Agreement shall be administered, interpreted and enforced
under the laws of the State of California without regard to conflicts of laws thereof.

          5.11 Conformity to Securities Laws. The Optionee acknowledges that the Plan is
intended to conform to the extent necessary with all provisions of the Securities Act and the
Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein
to the contrary, the Plan shall be administered, and the Option is granted and may be exercised,
only in such a manner as to conform to such laws, rules and regulations. To the extent permitted
by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

          5.12 Amendments. This Agreement may not be modified, amended or terminated except by
an instrument in writing, signed by the Optionee or such other person as may be permitted to
exercise the Option pursuant to Section 4.1 and by a duly authorized representative of the Company.

(signature page follows)

 

 

          IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.

	 	 	 	 	 
	 	 	GEN-PROBE INCORPORATED
	 
	 
	 

	 	BY:	 	 
	 

	 	 	 	 
	 

	 	 	 	Henry L. Nordhoff
	 

	 	 	 	President and Chief Executive Officer

	 	 	 
	OPTIONEE:

	 	 
	 
	 	 
	 
	 	 

 

 

EXHIBIT A

STOCK OPTION AGREEMENT

dated                     ,      ,

by and between

Gen-Probe Incorporated

and                                         

	 	 	 	 	 
	Optionee’s Name:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Optionee’s Address:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	Optionee’s Social Security Number:

	 	 	 	 
	 

	 	 	 	 

Type of Option (check one):

o   Incentive Stock Option

o   Non-Qualified Stock Option

	 	 	 	 	 
	Date of Grant:

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	Vesting Commencement Date:

	 	 	 	 
	 

	 	 	 	 

          1. Pursuant to Section 2.1 of the Agreement, the Company grants an option to purchase any part
or all of an aggregate of                     shares of Common Stock (“Option Shares”) at a price per
share of $                     upon the terms and conditions set forth in the Agreement.

          2. In accordance with Section 3.1(a) of the Agreement and subject to stockholder approval of
the Plan, the Option shall become exercisable in cumulative installments, rounded down to the
nearest whole number of shares, as follows:

     (a) One-fourth (1/4) of the Option Shares will vest one year after the Vesting
Commencement Date.

     (b) The remainder of the Option Shares will vest monthly thereafter over the following
three (3) years at a rate of 1/48th of the shares each month.

          3. Capitalized terms not otherwise defined herein shall have the meanings assigned thereto in
the Agreement.

 

 

EXHIBIT B

FORM OF EXERCISE NOTICE

Gen-Probe Incorporated

10210 Genetic Center Drive

San Diego, California 92121-1589

Attention: Corporate Secretary

			
	          Re:  	 	Exercise of Stock Option

Ladies and Gentlemen:

     1. Exercise of Option. The undersigned Optionee,                                         , was granted an
option (the “Option”) to purchase shares of the Common Stock, par value $0.0001 per share (“Common
Stock”), of Gen-Probe Incorporated, a Delaware corporation (the “Company”), effective as of
                    , pursuant to the Stock Option Agreement, dated                      (the “Option
Agreement”). The undersigned hereby elects to exercise the Option as follows:

	 	(a)	 	The undersigned hereby elects to exercise the Option as to
                    shares of the Common Stock, in accordance with Section 3.1 of the
Option Agreement (the “Shares”).

          (b) This date of this exercise is                         ,     .

     2. Payment. The undersigned has enclosed herewith                      (representing full payment for
such Shares in accordance with Section 4.3 of the Option Agreement). The undersigned authorizes
payroll withholding and otherwise will make adequate provision for the tax withholding obligations
of the Company, if any, with respect to such exercise.

     3. Binding Effect. The undersigned agrees that the Shares are being acquired in accordance
with and subject to the terms, provisions and conditions of the Option Agreement set forth therein,
to all of which the undersigned hereby expressly assent. This Agreement shall inure to the benefit
of and be binding upon the heirs, executors, administrators, successors and assigns of the
undersigned.

          The undersigned understands that she is purchasing the Shares pursuant to the terms of the
Option Agreement, a copy of which the undersigned has received and carefully read and understands.

                                                            

Receipt of the above is hereby acknowledged

GEN-PROBE INCORPORATED,

a Delaware corporation

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

	 	 	 	 
	 

	 	 	 	 

Exhibit Bexv10w5

 

EXHIBIT 10.5

THE 2002 NEW-HIRE STOCK OPTION PLAN

OF

GEN-PROBE INCORPORATED

(Adopted by Board of Directors on November 11, 2003)

(Amendment and Restatement Adopted by Board of Directors on November 16, 2006)

     Gen-Probe Incorporated, a Delaware corporation, has adopted The 2002 New-Hire Stock
Option Plan of Gen-Probe Incorporated (the “Plan”), effective November 11, 2002, for the benefit of
its eligible newly hired Employees.

          The purposes of the Plan are as follows:

          (1) To provide an additional incentive for Employees (as such terms are defined below) to
further the growth, development and financial success of the Company by personally benefiting
through the ownership of Company stock and/or rights which recognize such growth, development and
financial success.

          (2) To enable the Company to obtain and retain the services of Employees considered essential
to the long range success of the Company by offering them an opportunity to own stock in the
Company and/or rights which will reflect the growth, development and financial success of the
Company.

ARTICLE I.

DEFINITIONS

          1.1. General. Whenever the following terms are used in the Plan they shall have the
meanings specified below, unless the context clearly indicates otherwise.

          1.2. Administrator. “Administrator” shall mean the Committee, except to the extent
the Board has assumed the authority for administration of the Plan as provided in Section 7.2.

          1.3. Board. “Board” shall mean the Board of Directors of the Company.

          1.4. Change in Control. “Change in Control” shall mean a change in ownership or
control of the Company effected through any of the following transactions:

          (a) any person or related group of persons (other than the Company or
a person that, prior to such transaction, directly or indirectly controls, is
controlled by, or is under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities pursuant to a tender or exchange offer for securities of the Company;
or

 

 

          (b) there is a change in the composition of the Board over a period of thirty-six (36)
consecutive months (or less) such that a majority of the Board members (rounded up to the
nearest whole number) ceases, by reason of one or more proxy contests for the election of
Board members, to be comprised of individuals who either (i) have been Board members
continuously since the beginning of such period or (ii) have been elected or nominated for
election as Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or nomination was
approved by the Board; or

          (c) a merger or consolidation of the Company with any other corporation (or other
entity), other than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity
or another entity) more than 66-2/3% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such merger or
consolidation; provided, however, that a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no person
acquires more than 25% of the combined voting power of the Company’s then outstanding voting
securities shall not constitute a Change in Control; or

          (d) a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets.

          1.5. Code. “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time.

          1.6. Committee. “Committee” shall mean the Compensation Committee of the Board, or
another committee or subcommittee of the Board, appointed as provided in Section 7.1.

          1.7. Common Stock. “Common Stock” shall mean the common stock of the Company, par
value $0.0001 per share.

          1.8. Company. “Company” shall mean Gen-Probe Incorporated, a Delaware corporation.

          1.9. Director. “Director” shall mean a member of the Board, whether such Director is
an Employee or a Non-Employee Director.

          1.10. DRO. “DRO” shall mean a domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder.

          1.11. Employee. “Employee” shall mean any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Company, or of any corporation which is a
Subsidiary.

          1.12 Equity Restructuring. “Equity Restructuring” shall mean a non-reciprocal

2

 

transaction between the Company and its stockholders, such as a stock dividend, stock split,
spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that
affects the shares of Common Stock (or other securities of the Company) or the share price of
Common Stock (or other securities) and causes a change in the per share value of the Common Stock
underlying outstanding Awards.

          1.13 Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended from time to time.

          1.14 Fair Market Value. “Fair Market Value” shall mean, as of any date, the
value of the Common Stock determined as follows:

          (a) If the Common Stock is listed on any established stock exchange or a national
market system, the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market system (or the exchange or market with the greatest volume of trading in
the Common Stock) for such date, or if no bids or sales were reported for such date, then
the closing sales price (or the closing bid, if no sales were reported) on trading date
immediately prior to such date during which a bid or sale occurred, in each case, as
reported by The Nasdaq Stock Market or such other source as the Board deems reliable.

          (b) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.

          1.15 Holder. “Holder” shall mean a person who has been granted an Option.

          1.16 Independent Director. “Independent Director” shall mean a member of the
Board who is a “non-employee director” for purposes of Rule 16b-3 and who is “independent” within
the meaning of NASD Rule 4200.

          1.17 Non-Qualified Stock Option. “Non-Qualified Stock Option” shall mean an
Option not intended to qualify as an incentive stock option within the meaning of Section 422 of
the Code and the regulations promulgated thereunder.

          1.18 Officer. “Officer” shall mean a President, Secretary, Treasurer, Chairman
of the Board, Vice President, Assistant Secretary or Assistant Treasurer of the Company, as such
positions are described in the Company’s Bylaws, any other person designated an “officer” of the
Company by the Board of Directors in accordance with the Company’s Bylaws or any person who is an
“officer” within the meaning of Rule 16a-1(f) under the Exchange Act or NASD Rule 4350(i)(1)(A).

          1.19 Option. “Option” shall mean a Non-Qualified Stock Option granted under
Article IV of the Plan.

          1.20 Option Agreement. “Option Agreement” shall mean a written agreement
executed by an authorized officer of the Company and the Holder, which shall contain such

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terms and
conditions with respect to an Option, as the Administrator shall determine, consistent with the
Plan.

          1.21 Plan. “Plan” shall mean The 2002 New-Hire Stock Option Plan of Gen-Probe
Incorporated.

          1.22 Rule 16b-3. “Rule 16b-3” shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.

          1.23 Securities Act. “Securities Act” shall mean the Securities Act of 1933, as
amended.

          1.24 Subsidiary. “Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last corporation in the unbroken chain then
owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

          1.25 Termination of Employment. “Termination of Employment” shall mean the time
when the employee-employer relationship between a Holder and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement; but excluding (a)
terminations where there is a simultaneous reemployment or continuing employment of a Holder by the
Company or any Subsidiary or a parent corporation thereof (within the meaning of Section 422 of the
Code), (b) at the discretion of the Administrator, terminations which result in a temporary
severance of the employee-employer relationship, and (c) at the discretion of the Administrator,
terminations which are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions relating to Termination of
Employment, including, but not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge for cause, and all questions of whether a particular leave of
absence constitutes a Termination of Employment.

ARTICLE II.

SHARES SUBJECT TO PLAN

          2.1. Shares Subject to Plan. The shares of stock subject to Options shall be Common
Stock, subject to Section 8.3 of the Plan. The aggregate number of such shares which may be issued
upon exercise of such Options shall not exceed Four Hundred Thousand (400,000)1. The
shares of Common Stock issuable upon exercise of such Options may be either previously authorized
but unissued shares or treasury shares.

          2.2. Add-Back of Options. If any Option expires or is canceled without having been
fully exercised, the number of shares of Common Stock subject to such Option but as to

 

			
	1	 	Adjusted from 200,000 to to 400,000 to
reflect the two-for-one stock split implemented as a 100% stock dividend,
effective September 2003.

4

 

which such
Option was not exercised prior to its expiration or cancellation may again be optioned hereunder,
subject to the limitations of Section 2.1. Furthermore, any shares subject to Options which are
adjusted pursuant to Section 8.3 and become exercisable with respect to shares of stock of another
corporation shall be considered cancelled and may again be optioned hereunder, subject to the
limitations of Section 2.1. Shares of Common Stock which are delivered by the Holder or withheld
by the Company upon the exercise of any Option under the Plan, in payment of the
exercise price thereof or tax withholding thereon, may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 2.1.

ARTICLE III.

GRANTING OF OPTIONS

          3.1. Option Agreement. Each Option shall be evidenced by an Option Agreement.

          3.2. Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Option granted to any individual who is then subject to
Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule
16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To
the extent permitted by applicable law, the Plan and the Options granted hereunder shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.

          3.3. At-Will Employment. Nothing in the Plan or in any Option Agreement hereunder
shall confer upon any Holder any right to continue in the employ of the Company or any Subsidiary
or shall interfere with or restrict in any way the rights of the Company and any Subsidiary to
discharge any Holder at any time for any reason whatsoever, with or without cause, except to the
extent expressly provided otherwise in a written employment agreement between the Holder and the
Company and any Subsidiary.

ARTICLE IV.

GRANTING OF OPTIONS TO EMPLOYEES

          4.1. Eligibility. Notwithstanding anything herein to the contrary, only newly hired
Employees (including Employees who will become Officers or Directors of the Company) who have not
previously been employed by the Company and with respect to whom Options are to be granted as an
inducement material to such Employees’ entering into employment with the Company shall be eligible
to receive grants of Options under this Plan. All grants shall be made at the discretion of the
Committee or a majority of the Company’s Independent Directors, and no person shall be entitled to
a grant of an Option as a matter of right.

          4.2. Granting of Options to Employees.

          (a) The Committee shall from time to time, in its absolute discretion,
and subject to applicable limitations of the Plan:

5

 

          (i) Select from among the newly hired Employees such of them as in its
opinion should be granted Options;

          (ii) determine the number of shares of Common Stock to be subject to
such Options granted to the selected Employees;

          (iii) Determine the terms and conditions of such Options, consistent
with the Plan.

          (b) Upon the selection of an Employee to be granted an Option, the Committee shall
instruct the Secretary of the Company to issue the Option and may impose such conditions on
the grant of the Option as it deems appropriate, and the Committee shall authorize one or
more of the officers of the Company to prepare, execute and deliver the Option Agreement
with respect to such Option.

          4.3. Options in Lieu of Cash Compensation. Options may be granted under the Plan to
Employees in lieu of cash bonuses which would otherwise be payable to such Employees pursuant to
such policies which may be adopted by the Administrator from time to time.

ARTICLE V.

TERMS OF OPTIONS

          5.1. Option Price. The price per share of the shares of Common Stock subject to each
Option granted to Employees shall be set by the Committee; provided, however, that
such price shall be no less than 100% of the Fair Market Value of a share of Common Stock on the
date the Option is granted.

          5.2. Option Term. The term of an Option granted to an Employee shall be set by the
Committee in its absolute discretion; provided, however, that the term shall not be
more than ten (10) years from the date the Option is granted. The Committee may extend the term of
any outstanding Option in connection with any Termination of Employment of the Holder, or amend any
other term or condition of such Option relating to such a termination.

          5.3. Option Vesting

          (a) The period during which the right to exercise, in whole or in part, an Option
granted to an Employee vests in the Holder shall be set by the Committee, and the Committee
may determine that an Option may not be exercised in whole or in part for a specified period
after it is granted. At any time after grant of an Option, the Committee may, in its
absolute discretion and subject to whatever terms and conditions it selects, accelerate the
period during which an Option granted to an Employee vests and becomes
exercisable.

          (b) No portion of an Option granted to an Employee which is unexercisable at
Termination of Employment shall thereafter become exercisable, except as may be otherwise
provided by the Committee either in the Option Agreement or by action of the Committee
following the grant of the Option.

6

 

          5.4. Restrictions on Common Stock. The Administrator may, in its sole discretion,
provide under the terms of an Option that shares of Common Stock purchased upon exercise of such
Option shall be subject to repurchase from the Holder by the Company, or shall be subject to such
restrictions as the Administrator shall provide, which restrictions may include, without
limitation, restrictions concerning voting rights and transferability and restrictions based on
duration of employment with the Company and the Subsidiaries, Company performance and individual
performance; provided, however, that, by action taken after the Common Stock is
purchased upon exercise of the Option, the Administrator may, on such terms and conditions as it
may determine to be appropriate, terminate the Company’s repurchase right or remove any or all of
the restrictions imposed by the terms of the Option Agreement. The Company’s right to repurchase
the Common Stock from the Holder then subject to the right shall provide that immediately upon a
Termination of Employment and for such period as the Administrator shall determine, the Company
shall have the right to purchase the Common Stock at a price per share equal to the price paid by
the Holder for such Common Stock, or such other price as is determined by the Administrator;
provided, however, that, in the event of a Change in Control, such right of
repurchase shall terminate immediately prior to the effective date of such Change in Control.
Shares of Common Stock purchased upon the exercise of an Option may not be sold, transferred or
encumbered until any repurchase right and any and all restrictions are terminated or expire. The
Secretary of the Company or such other escrow holder as the Administrator may appoint shall retain
physical custody of each certificate representing such shares of Common Stock until the repurchase
right and any and all of the restrictions imposed under the Option Agreement with respect to the
shares evidenced by such certificate terminate, expire or shall have been removed. In order to
enforce the restrictions imposed upon shares of Common Stock hereunder, the Administrator shall
cause a legend or legends to be placed on certificates representing all shares of Common Stock that
are still subject to any repurchase right or restrictions under Option Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby. If a Holder makes an
election under Section 83(b) of the Code, or any successor section thereto, to be taxed with
respect to the Common Stock as of the date of transfer of the Common Stock rather than as of the
date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the
Holder shall deliver a copy of such election to the Company immediately after filing such election
with the Internal Revenue Service.

ARTICLE VI.

EXERCISE OF OPTIONS

          6.1. Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be
exercisable with respect to fractional shares and the Administrator may require that, by the terms
of the Option, a partial exercise be with respect to a minimum number of shares.

          6.2. Manner of Exercise. All or a portion of an exercisable Option shall be deemed
exercised upon delivery of all of the following to the Secretary of the Company or his office:

7

 

          (a) A written notice complying with the applicable rules established by the
Administrator stating that the Option, or a portion thereof, is exercised. The notice shall
be signed by the Holder or other person then entitled to exercise the Option or such portion
of the Option;

          (b) Such representations and documents as the Administrator, in its absolute
discretion, deems necessary or advisable to effect compliance with all applicable provisions
of the Securities Act and any other federal or state securities laws or regulations. The
Administrator may, in its absolute discretion, also take whatever additional actions it
deems appropriate to effect such compliance including, without limitation, placing legends
on share certificates and issuing stop-transfer notices to agents and registrars;

          (c) In the event that the Option shall be exercised pursuant to Section 8.1 by any
person or persons other than the Holder, appropriate proof of the right of such person or
persons to exercise the Option; and

          (d) Full cash payment to the Secretary of the Company for the shares with respect to
which the Option, or portion thereof, is exercised. However, the Administrator, may in its
sole and absolute discretion (i) allow a delay in payment up to thirty (30) days from the
date the Option, or portion thereof, is exercised; (ii) allow payment, in whole or in part,
through the delivery of shares of Common Stock which have been owned by the Holder for at
least six months, duly endorsed for transfer to the Company with a Fair Market Value on the
date of delivery equal to the aggregate exercise price of the Option or exercised portion
thereof; (iii) allow payment, in whole or in part, through the surrender of shares of Common
Stock then issuable upon exercise of the Option having a Fair Market Value on the date of
Option exercise equal to the aggregate exercise price of the Option or exercised portion
thereof; (iv) allow payment, in whole or in part, through the delivery of a notice that the
Holder has placed a market sell order with a broker with respect to shares of Common Stock
then issuable upon exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in satisfaction of the
Option exercise price; provided that payment of such proceeds is then made to the
Company upon settlement of such sale; or (v) allow payment through any combination of the
consideration provided in the foregoing subparagraphs (ii), (iii) and (iv).

          6.3. Conditions to Issuance of Stock Certificates. The Company shall not be required to issue or deliver any certificate
or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof prior to fulfillment
of all of the following conditions:

          (a) The admission of such shares to listing on all stock exchanges on which such class
of stock is then listed;

          (b) The completion of any registration or other qualification of such shares under any
state or federal law, or under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body which the Administrator shall, in its
absolute discretion, deem necessary or advisable;

8

 

          (c) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its absolute discretion, determine to
be necessary or advisable;

          (d) The lapse of such reasonable period of time following the exercise of the Option as
the Administrator may establish from time to time for reasons of administrative convenience;
and

          (e) The receipt by the Company of full payment for such shares, including payment of
any applicable withholding tax, which in the discretion of the Administrator may be in the
form of consideration used by the Holder to pay for such shares under Section 6.2(d).

          6.4. Rights as Stockholders. Holders shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect of any shares purchasable upon the exercise
of any part of an Option unless and until certificates representing such shares have been issued by
the Company to such Holders.

          6.5. Ownership and Transfer Restrictions. The Administrator, in its absolute
discretion, may impose such restrictions on the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate. Any such restriction shall be
set forth in the respective Option Agreement and may be referred to on the certificates evidencing
such shares.

          6.6. Additional Limitations on Exercise of Options. Holders may be required to comply
with any timing or other restrictions with respect to the settlement or exercise of an Option,
including a window-period limitation, as may be imposed in the discretion of the Administrator.

ARTICLE VII.

ADMINISTRATION

          7.1. Committee. The Committee shall be the Compensation Committee of the Board (or
another committee or a subcommittee of the Board assuming the functions of the Committee under the
Plan), and the Compensation Committee (or other committee or subcommittee) shall consist solely of
two or more Non-Employee Directors appointed by and holding office at the pleasure of the Board.
Appointment of Committee members shall be effective upon acceptance of appointment. Committee
members may resign at any time by delivering written notice to the Board. Vacancies in the
Committee may be filled by the Board.

          7.2. Duties and Powers of Committee. It shall be the duty of the Committee to conduct
the general administration of the Plan in accordance with its provisions. The Committee shall have
the power to interpret the Plan and the Option Agreements, and to adopt such rules for the
administration, interpretation, and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules and to amend any Option Agreement provided that the
rights or obligations of the Holder of the Option that is the subject of any such Option Agreement
are not affected adversely. In its absolute discretion, the Board may at any time and

9

 

from time to
time assume any and all rights and duties of the Committee under the Plan; provided that grants of
Options may be made only by the Committee or by a majority of the Company’s Independent Directors.

          7.3. Majority Rule; Unanimous Written Consent. The Committee shall act by a majority
of its members in attendance at a meeting at which a quorum is present or by a memorandum or other
written instrument signed by all members of the Committee.

          7.4. Compensation; Professional Assistance; Good Faith Actions. Members of the
Committee shall receive such compensation, if any, for their services as members as may be
determined by the Board. All expenses and liabilities which members of the Committee incur in
connection with the administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants, appraisers, brokers, or
other persons. The Committee, the Company and the Company’s officers and directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken
and all interpretations and determinations made by the Committee or the Board in good faith shall
be final and binding upon all Holders, the Company and all other interested persons. No members of
the Committee or Board shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Plan or Options, and all members of the Committee and the
Board shall be fully protected by the Company in respect of any such action, determination or
interpretation.

ARTICLE VIII.

MISCELLANEOUS PROVISIONS

          8.1. Not Transferable. No Option under the Plan may be sold, pledged, assigned or
transferred in any manner other than by will or the laws of descent and distribution or, subject to
the consent of the Administrator, pursuant to a DRO, unless and until such Option has been
exercised, or the shares underlying such Option have been issued, and all restrictions applicable
to such shares have lapsed. No Option or interest or right therein shall be liable for the debts,
contracts or engagements of the Holder or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect, except to the extent
that such disposition is permitted by the preceding sentence.

          During the lifetime of the Holder, only he may exercise an Option (or any portion thereof)
granted to him under the Plan, unless it has been disposed of with the consent of the Administrator
pursuant to a DRO. After the death of the Holder, any exercisable portion of an Option may, prior
to the time when such portion becomes unexercisable under the Plan or the applicable Option
Agreement, be exercised by his personal representative or by any person empowered to do so under
the deceased Holder’s will or under the then applicable laws of descent and distribution.

10

 

          Notwithstanding the foregoing provisions of this Section 8.1, the Administrator, in its sole
discretion, may determine to grant a Non-Qualified Stock Option which, by its terms as set forth in
the applicable Option Agreement, may be transferred by the Holder, in writing and with prior
written notice to the Administrator, to any one or more Permitted Transferees (as defined below),
subject to the following terms and conditions: (a) a Non-Qualified Stock Option transferred to a
Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than
by will or the laws of descent and distribution; (b) any Non-Qualified Stock Option which is
transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions
of the Non-Qualified Stock Option as applicable to the original Holder (other than the ability to
further transfer the Non-Qualified Stock Option); and (c) the Holder and the Permitted Transferee
shall execute any and all documents requested by the Administrator, including, without limitation,
documents to: (i) confirm the status of the transferee as a Permitted Transferee, (ii) satisfy any
requirements for an exemption for the transfer under applicable federal and state securities laws
and (iii) evidence the transfer. For purposes of this Section, “Permitted Transferee” shall mean,
with respect to a Holder, any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Holder’s
household (other than a tenant or employee), a trust in which these persons (or the Holder) control
the management of assets, and any other entity in which these persons (or the Holder) owns more
than fifty percent (50%) of the voting interests, or any other transferee specifically approved by
the Administrator after taking
into account any state or federal tax or securities laws applicable to transferable
Non-Qualified Stock Options.

          8.2. Amendment, Suspension or Termination of the Plan. Except as otherwise provided
in this Section 8.2, the Plan may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Board. No amendment, suspension or
termination of the Plan shall, without the consent of the Holder alter or impair any rights or
obligations under any Option theretofore granted or awarded, unless the Option itself otherwise
expressly so provides. No Options may be granted or awarded during any period of suspension or
after termination of the Plan, and in no event may any Option be granted under the Plan after the
expiration of ten years from the date the Plan is adopted by the Board.

          8.3. Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the
Company and Other Corporate Events.

          (a) Subject to Section 8.3(e), in the event that the Administrator determines that
other than an Equity Restructuring any dividend or other distribution (whether in the form
of cash, Common Stock, other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer,
exchange or other disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of warrants or other
rights to purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event, in the Administrator’s sole discretion, affects the Common
Stock such that an adjustment is determined by the Administrator to be appropriate in order
to prevent dilution or enlargement of the benefits or potential

11

 

benefits intended to be made
available under the Plan or with respect to an Option, then the Administrator shall, in such
manner as it may deem equitable, adjust any or all of:

          (i) the number and kind of shares of Common Stock (or other securities
or property) with respect to which Options may be granted (including, but
not limited to, adjustments of the limitations in Section 2.1 on the maximum
number and kind of shares which may be issued),

          (ii) the number and kind of shares of Common Stock (or other securities
or property) subject to outstanding Options, and

          (iii) the exercise price with respect to any Option.

          (b) Subject to Sections 8.3(d) and 8.4, in the event of any transaction or event
described in Section 8.3(a), any Equity Restructuring or any unusual or nonrecurring
transactions or events affecting the Company, any affiliate of the Company, or the financial
statements of the Company or any affiliate, or of changes in applicable laws, regulations,
or accounting principles, the Administrator, in its sole and absolute discretion, and on
such terms and conditions as it deems appropriate, either by the terms
of the Option or by action taken prior to the occurrence of such transaction or event
(any such action applied to Employees and former Employees to be applied uniformly) and
either automatically or upon the Holder’s request, is hereby authorized to take any one or
more of the following actions whenever the Administrator determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with respect to any Option under
the Plan, to facilitate such transactions or events or to give effect to such changes in
laws, regulations or principles:

          (i) to provide for either the cancellation of any such Option for an
amount of cash equal to the amount that could have been attained upon the
exercise of such Option or realization of the Holder’s rights had such
Option been currently exercisable or fully vested, or the replacement of
such Option with other rights or property selected by the Administrator in
its sole discretion;

          (ii) to provide that the Option cannot vest or be exercised after such
event;

          (iii) to provide that such Option shall be exercisable as to all shares
covered thereby, notwithstanding anything to the contrary in Section 5.3 or
the provisions of such Option;

          (iv) to provide that such Option be assumed by the successor or
survivor corporation, or a parent or subsidiary thereof, or shall be
substituted for by similar options, rights or awards covering the stock of
the successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices;

12

 

          (v) to make adjustments in the number and type of shares of Common
Stock (or other securities or property) subject to outstanding Options
and/or in the terms and conditions of (including the exercise price), and
the criteria included in, outstanding Options and Options which may be
granted in the future; and

          (vi) to provide that, for a specified period of time prior to such
event, the restrictions imposed under an Option Agreement upon some or all shares of Common Stock may be terminated and some or all shares of such
Common Stock may cease to be subject to repurchase after such event.

          (c) In connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in Section 10.3(a) and 10.3(b):

          (i) The number and type of securities subject to each outstanding Award and the
exercise price or grant price thereof, if applicable, will be proportionately
adjusted. The adjustments provided under this Section
10.3(c)(i) shall be nondiscretionary and shall be final and binding on the
affected Holder and the Company.

          (ii) The Administrator shall make such proportionate adjustments, if any, as
the Administrator in its discretion may deem appropriate to reflect such Equity
Restructuring with respect to the aggregate number and kind of shares that may be
issued under the Plan (including, but not limited to, adjustments of the limitations
in Section 2 and the Award Limit).

          (iii) Notwithstanding anything in this Section 10.3(c) to the contrary, this
Section 10.3(c) shall not apply to, and instead Section 10.3(a) of the Plan shall
apply to, any Award to which the application of this Section 10.3(c) would (A)
result in a penalty tax under Section 409A of the Code and the Department of
Treasury proposed and final regulations and guidance thereunder or (B) cause any
Incentive Stock Option to fail to qualify as an “incentive stock option” under
Section 422 of the Code.

          (d) Subject to Sections 8.3(e), 3.2 and 3.3, the Administrator may, in its
discretion, include such further provisions and limitations in any Option, Option Agreement
or certificate, as it may deem equitable and in the best interests of the Company.

          (e) No adjustment or action described in this Section 8.3 or in any other provision
of the Plan shall be authorized to the extent such adjustment or action would result in
short-swing profits liability under Section 16 or violate the exemptive conditions of Rule
16b-3 unless the Administrator determines that the Option is not to comply with such
exemptive conditions. The number of shares of Common Stock subject to any Option shall
always be rounded to the next whole number.

13

 

          (f) The existence of the Plan, the Option Agreement and the Options granted
hereunder shall not affect or restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its business, any
merger or consolidation of the Company, any issue of stock or of options, warrants or rights
to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights
are superior to or affect the Common Stock or the rights thereof or which are convertible
into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.

          8.4. Change in Control. Notwithstanding any other provision of the Plan, in the event of a
Change in Control, each outstanding Option shall, immediately prior to the effective date of the
Change in Control, automatically become fully exercisable for all of the shares of Common Stock at
the time subject
to such Option and may be exercised for any or all of those shares as fully-vested shares of Common
Stock.

          8.5. Tax Withholding. The Company shall be entitled to require payment in cash or
deduction from other compensation payable to each Holder of any sums required by federal, state or
local tax law to be withheld with respect to the issuance, vesting, exercise or payment of any
Option. The Administrator may in its discretion and in satisfaction of the foregoing requirement
allow such Holder to elect to have the Company withhold shares of Common Stock otherwise issuable
under such Option (or allow the return of shares of Common Stock) having a Fair Market Value equal
to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number
of shares of Common Stock which may be withheld with respect to the issuance, vesting, exercise or
payment of any Option (or which may be repurchased from the Holder of such Option within six months
after such shares of Common Stock were acquired by the Holder from the Company) in order to satisfy
the Holder’s federal and state income and payroll tax liabilities with respect to the issuance,
vesting, exercise or payment of the Option shall be limited to the number of shares which have a
Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal and state tax income and
payroll tax purposes that are applicable to such supplemental taxable income.

          8.6. Forfeiture Provisions. Subject to the limitations of applicable law, pursuant to
its general authority to determine the terms and conditions applicable to Options under the Plan,
the Administrator shall have the right to provide, in the terms of Options made under the Plan, or
to require a Holder to agree by separate written instrument, that if (a)(i) the Holder at any time,
or during a specified time period, engages in any activity in competition with the Company, or
which is inimical, contrary or harmful to the interests of the Company, as further defined by the
Administrator or (ii) the Holder incurs a Termination of Employment for cause, then (b) (i) any
proceeds, gains or other economic benefit actually or constructively received by the Holder upon
any exercise of the Option, or upon the receipt or resale of any Common Stock underlying the
Option, must be paid to the Company, and (ii) the Option shall terminate and any unexercised
portion of the Option (whether or not vested) shall be forfeited.

14

 

          8.7. Effect of Plan upon Options and Compensation Plans. The adoption of the Plan
shall not affect any other compensation or incentive plans in effect for the Company or any
Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company (a) to
establish any other forms of incentives or compensation for Employees of the Company or any
Subsidiary or (b) to grant or assume options or other rights or awards otherwise than under the
Plan in connection with any proper corporate purpose including but not by way of limitation, the
grant or assumption of options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company, firm or association.

          8.8. Compliance with Laws. The Plan, the granting and vesting of Options under the Plan and the issuance and delivery of
shares of Common Stock and the payment of money under the Plan or under Options granted hereunder
are subject to compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal margin requirements) and
to such approvals by any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith. Any securities
delivered under the Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and representations to the
Company as the Company may deem necessary or desirable to assure compliance with all applicable
legal requirements. To the extent permitted by applicable law, the Plan and Options granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.

          8.9. Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of share of Common Stock hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such shares of Common Stock as
to which such requisite authority shall not have been obtained.

          8.10. Reservation of Shares. The Company, during the term of this Plan, shall at all
times reserve and keep available such number of shares of Common Stock as shall be sufficient to
satisfy the requirements of the Plan.

          8.11. Investment Intent. The Company may require a Holder or other person purchasing
shares of Common Stock, as a condition of exercising or acquiring Common Stock under any Option, to
give written assurances satisfactory to the Company as to the Holder’s or other person’s knowledge
and experience in financial and business matters and/or to employ a representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial and business matters
and that such Holder or person is capable of evaluating, alone or together with the representative,
the merits and risks of exercising the Option; and to give written assurances satisfactory to the
Company stating that the person is acquiring the stock subject to the Option for such Holder or
person’s own account and not with any present intention of selling or otherwise distributing the
Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements,
shall be inoperative if the issuance of the shares upon the exercise or acquisition of Common Stock
under the applicable Option has been registered under a then currently effective registration
statement under the Securities Act, or as to any particular requirement, a determination is made by
counsel for the Company that such requirement need

15

 

not be met in the circumstances under the then
applicable securities laws. The Company may, upon advice of counsel to the Company, place legends
on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order
to comply with applicable securities laws, including, but not limited to, legends restricting the
transfer of the stock.

          8.12. Titles. Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan.

          8.13. Governing Law. The Plan and any agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of California without regard to
conflicts of laws thereof.

          8.14. Compliance with NASD Rules. The Plan has been designed to permit grants of
Options to newly hired Employees without shareholder approval in accordance with the express
exceptions to NASD Rule 4350(i) and shall be interpreted and administered in a manner consistent
with such intent.

* * *

          I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of
Gen-Probe Incorporated on November 11, 2002 and adopted as amended and restated herein on November
16, 2006.

          Executed on this 28th day of November 2006.

	 	 	 	 	 
	 	 	 
	 	                                                     /s/ R. William Bowen
 	 
	 	R. William Bowen 	 
	 	Secretary 	 
	 

16

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