Document:

exv10w31

 

Exhibit 10.31

	 	 	 	 	 
	Dated

	 	 	2007	 

Rules of the Inverness Medical Innovations Inc.

HM Revenue and Customs Approved Share Option Plan (2007)

Approved by HM Revenue and Customs on [Date] under Reference: [Number]

Adopted by the Board on [Date] as authorised by the Inverness Medical
Innovations Inc. 2001 Stock Option and Incentive Plan

	 	 	 
	Eversheds LLP

	 	Tel 0845 497 9797
	Cloth Hall Court

	 	Fax 0845 498 4994
	Infirmary Street

	 	Int +44 20 7497 9797
	Leeds

	 	DX 12027 Leeds — 27
	LS1 2JB

	 	www.eversheds.com

 

 

CONTENTS

	 	 	 	 	 
	Rule	 	 	 	Page
	1

2

3

4

5

6

7

8

9

10

11

	 	DEFINITIONS AND INTERPRETATION

GRANT OF OPTIONS

OPTION PRICE

PLAN LIMIT

RIGHTS OF EXERCISE AND LAPSE OF OPTIONS

EXERCISE OF OPTIONS

ADJUSTMENT OF OPTIONS

EXCHANGE OF OPTIONS

ADMINISTRATION

AMENDING THE PLAN

GENERAL
	 	3

6

7

8

9

11

13

13

14

15

15

 

 

RULES OF THE INVERNESS MEDICAL INNOVATIONS INC HM REVENUE AND

CUSTOMS APPROVED OPTION PLAN (2007)

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

	 	 	 	 	 
	 

	 	“Appropriate Period”
	 	the meaning given by paragraph 26 (3) of Schedule 4;
	 
	 	 	 	 
	 

	 	“Associated Company”
	 	in relation to the Company:

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

	 	 	 	 	 
	 

	 	“Board”
	 	the board of directors for the time being of the Company or a
duly authorised committee of it;
	 
	 	 	 	 
	 

	 	“Cause”
	 	means fraud, embezzlement, material dishonesty, conviction of a
felony or crime involving moral turpitude, or a material breach
or a material failure to perform or a material negligence in
the performance of the duties of employment;
	 
	 	 	 	 
	 

	 	“Close Company”
	 	the meaning given by section 414 (1) of the Taxes Act as varied
by paragraph 9 (4) of Schedule 4;
	 
	 	 	 	 
	 

	 	“the Company”
	 	Inverness Medical Innovations Inc (registered no. 3391092 8100);
	 
	 	 	 	 
	 

	 	“Control”
	 	means the power of a person to secure:

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

	 	 	 	 	 
	 

	 	“Date of Grant”
	 	with respect to an Option the date on which the Grantor grants
it under Rule 2.4;
	 
	 	 	 	 
	 

	 	“Discretionary Share
Option Plan”
	 	a share option plan, other than a savings-related share option
plan, in which participation is at the discretion of the
grantor of options under that plan;

 

 

	 	 	 	 	 
	 

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

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

	 	 	 	 	 
	 

	 	“Employee Tax Liability”
	 	an income tax and/or employee’s national insurance
contributions liability arising as a result of or in connection
with the exercise of an Option in respect of which a company in
the Group (or any other person who, at the relevant time, is
the employer of the Eligible Employee) is obliged to account
for such income tax and/or employee’s national insurance
contributions to HMRC
	 
	 	 	 	 
	 

	 	“Exercise Price”
	 	the total amount payable on the exercise of an Option, whether
in whole or in part, being an amount equal to the relevant
Option Price multiplied by the number of Shares in respect of
which the Option is exercised;
	 
	 	 	 	 
	 

	 	“Grantor”
	 	in relation to an Option, the Person who granted it;
	 
	 	 	 	 
	 

	 	“Group”
	 	the Company and all Participating Companies for the time being
or where the context so requires any one or more of them
	 
	 	 	 	 
	 

	 	“HMRC”
	 	HM Revenue and Customs
	 
	 	 	 	 
	 

	 	“Incumbent Director”
	 	any duly elected member of the Board on the date this Plan was
approved, as well as any subsequently elected member of the
Board if such person’s election was approved by or such person
was nominated for election by either (a) a vote of at least a
majority of the Incumbent Directors or (b) a vote of at least a
majority of the Incumbent Directors who are members of a
nominating committee comprised, in the majority, of Incumbent
Directors; provided that any person who initially joins the
Board in connection with an actual or threatened election
contest or proxy solicitation on behalf of a person other than
the Board shall not be considered an Incumbent Director.
	 
	 	 	 	 
	 

	 	“Jointly Owned Company”
	 	the meaning given by paragraph 34 Schedule 4
	 
	 	 	 	 
	 

	 	“Market Value”
	 	in relation to a Share on any day its market value, determined
in accordance with Part VIII of the Taxation of Chargeable
Gains Act 1992 and agreed in advance with HMRC Shares and
Assets Valuation;
	 
	 	 	 	 
	 

	 	“Material Interest”
	 	the meaning given by paragraph 10 Schedule 4;

 

 

	 	 	 	 	 
	 

	 	“Member of a Consortium”
	 	the meaning given by paragraph 36(2) Schedule 4;
	 
	 	 	 	 
	 

	 	“Option”
	 	a right to acquire Shares under the Plan which is either
subsisting or is proposed to be granted;
	 
	 	 	 	 
	 

	 	“Option Certificate”
	 	a certificate issued pursuant to Rule 2.4
	 
	 	 	 	 
	 

	 	“Option Exercise Date”
	 	the date when the exercise of an Option is effective because it
complies with Rules 6.2 and 6.3;
	 
	 	 	 	 
	 

	 	“Option Price”
	 	the price per Share at which a Participant may acquire Shares
on the exercise of an Option determined under Rule 3;
	 
	 	 	 	 
	 

	 	“Participant”
	 	any Eligible Employee to whom an Option has been granted, or
(where the context requires) his personal representatives;
	 
	 	 	 	 
	 

	 	“Participating Company”
	 	(a)     the Company; or

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

	 	 	 	 	 
	 

	 	 	 	and is for the time being designated by the Board as a
Participating Company;
	 
	 	 	 	 
	 

	 	“Person”
	 	any individual, corporation, partnership, limited liability
company, trust or other entity of whatever nature;
	 
	 	 	 	 
	 

	 	“Plan”
	 	the Inverness Medical Innovations Inc HM Revenue and Customs
Approved Share Option Plan (2007) in its present form or as
from time to time amended in accordance with the Rules;
	 
	 	 	 	 
	 

	 	“Rules”
	 	these rules as amended from time to time;
	 
	 	 	 	 
	 

	 	“Schedule 4”
	 	Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003;
	 
	 	 	 	 
	 

	 	“Share”
	 	a fully paid share of common stock in the capital of the
Company which satisfies paragraphs 16 to 20 of Schedule 4;
	 
	 	 	 	 
	 

	 	“Specified Anniversary”
	 	in respect of an Option or any part of it, the date or dates,
specified by the Company at the Date of Grant, on which the
Option (or part of it) shall first become exercisable;

 

 

	 	 	 	 	 
	 

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

	 	(a)	 	that other company:

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

	 	 	 	 	 
	 

	 	“Taxes Act”
	 	the Income and Corporation Taxes Act 1988; and
	 
	 	 	 	 
	 

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

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

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

 

 

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

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

 

 

	 	 	The Option Price cannot be less than the higher of:

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

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

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

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

 

 

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

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

	5.2	 	Exercisability upon a change in Control of the Company

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

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

	 	5.2.2	 	For the purposes of Rule 5.2:

 

 

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

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

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

 

 

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

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

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

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

 

 

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

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

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

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

 

 

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

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

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

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

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

 

 

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

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

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

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

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

 

 

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

 

 

	 	 	A Participant waives all and any rights to compensation or damages for the termination of
his office or employment with a Participating Company or Associated Company for any reason
whatsoever insofar as those rights arise or may arise from his ceasing to have rights
under or to be entitled to exercise any Option under the Plan as a result of that
termination or from the loss or diminution in value of such rights or entitlements.
Nothing in the Plan or in any document executed under it will give any Person any right to
continue in employment or will affect the right of any Participating Company or any
Associated Company to terminate the employment of any Participant without liability at any
time, with or without Cause, or will impose any Participating Company, the Grantor or
their respective agents and employees any liability in connection with the loss of a
Participant’s benefits or rights on the exercise of a discretion under the Plan for any
reason as a result of the termination of his employment.
	 
	11.3	 	The Benefits of Rule 11.1 and 11.2
	 
	 	 	The benefit of Rules 11.1 and 11.2 is given for the Company, for itself and as trustee and
agent of all Participating Companies and Associated Companies. The Company will hold the
benefit of these Rules on trust and an agent for each of them and may assign the benefit
of this Rule 11.3 to any of them.
	 
	11.4	 	Constitutional documents
	 
	 	 	Any Shares acquired on the exercise of Options shall be subject to the constitutional
documents of the Company.
	 
	11.5	 	Severability
	 
	 	 	The invalidity or non-enforceability of one or more provisions of the Plan will not affect
the validity or enforceability of the other provisions of the Plan.
	 
	11.6	 	Governing law
	 
	 	 	These Rules will be governed by and construed in accordance with the law of the state of
Delaware.exv10w40

 

Exhibit 10.40

AMENDMENT NO. 6

TO

INVERNESS MEDICAL INNOVATIONS, INC.

2001 STOCK OPTION AND INCENTIVE PLAN

     The Inverness Medical Innovations, Inc. 2001 Stock Option and Incentive Plan (the “Plan”) is
hereby amended for the purpose of clarifying that the definition of “Subsidiary” included in
Section 1 of the Inverness Medical Innovations, Inc. 2001 Stock Option and Incentive Plan (the
“Option Plan” and the “Plan Amendment”) includes companies of which the Company owns 50% or more of
the voting stock, to amend the Option Plan, pursuant to the authority granted the Board under
Section 13 of the Option Plan, as follows:

     “Subsidiary” means a “subsidiary corporation” with respect to the Company, as defined in
Section 424(f) of the code.

     Except as herein amended, the provisions of the Plan shall remain in full force and effect.

AS APPROVED BY THE BOARD OF DIRECTORS: April 5, 2007

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]