Document:

exv10w6

 

Exhibit 10.6

2002 NEW HIRE OPTION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

(Effective November 16, 2006)

     THIS AGREEMENT, dated the Grant Date set forth on Exhibit “A” attached 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 Employee of the Company, or a Subsidiary of the Company, 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 2002 New-Hire Stock Option 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 Committee appointed to administer the Plan has determined that it would be to the
advantage and best interest of the Company and its stockholders to grant the Non-Qualified Stock
Option (the “Option”) provided for herein to the Optionee as an inducement to enter into or remain
in the service of the Company or its Subsidiaries and as an incentive for increased efforts 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 Optionee’s failure or refusal to perform
specific and lawful directions with respect to the Optionee’s employment with the Company or a
Subsidiary, (b) 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 (c) 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 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.

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

          1.10 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.

          1.11 Option. “Option” shall mean the Non-Qualified Stock Option granted under this
Agreement and Article IV of the Plan.

          1.12 Optionee. “Optionee” shall mean the Employee granted the Option under this
Agreement and the Plan.

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

          1.14 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.

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

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

          1.17 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.

          1.18 Termination of Employment. “Termination of Employment” shall mean the time when
the employee-employer relationship between the Optionee 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) a
termination where there is a simultaneous reemployment or continuing employment of the Optionee 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 Committee, a termination which results in a temporary
severance of the employee-employer relationship, and (c) at the discretion of the Committee, a
termination which is followed by the simultaneous establishment of a consulting relationship by the
Company or a Subsidiary with the former employee. The Committee, 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 particular leaves of absence constitute
Terminations of Employment. Notwithstanding any other provision of the Plan or this Agreement, the
Company or any Subsidiary has an absolute and unrestricted right to terminate an Optionee’s
employment at any time for any reason whatsoever, with or without Cause, except to the extent
expressly provided otherwise in writing.

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 the Date of Grant set forth on Exhibit “A,” 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 shall be the price per share set forth on Exhibit “A” 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 to the Company or any
Subsidiary, with such duties and responsibilities as the Company shall from time to time prescribe.
Nothing in the Plan or this Agreement shall confer upon the Optionee 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 its Subsidiaries, which are hereby expressly

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reserved, to discharge the Optionee at any time for any reason whatsoever, with or without
Cause.

ARTICLE III.

PERIOD OF EXERCISABILITY

          3.1 Commencement of Exercisability.

          (a) Subject to Section 3.3, the Option shall vest and 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 vested and exercisable at Termination of
Employment shall thereafter become vested and exercisable, except as may be otherwise provided by
the Committee.

          3.2 Duration of Exercisability. The installments provided for in Section 3.1(a) and
Exhibit “A” hereto are cumulative. Each such installment which vests and becomes exercisable
pursuant to Section 3.1 shall remain vested and 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
Employment, unless such Termination of Employment 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
Employment 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
Employment 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
Employment by reason of the Optionee’s Retirement.

ARTICLE IV.

EXERCISE OF OPTION

          4.1 Person Eligible to Exercise. Subject to Section 5.2(c) 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

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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 (or the minimum installment set forth
in Exhibit “A” hereto, if a lesser number of 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 Committee. Such
notice shall be substantially in the form attached hereto as Exhibit “B” (or in such other form as
is prescribed by the Committee); and

          (b) With respect to the shares of Common Stock for which the Option is then being exercised,
to the extent permitted under applicable laws, the Optionee may pay for such Shares as follows:

     (A) Full payment (in cash or by check) for the shares with respect to which the
Option or portion thereof is exercised; or

     (B) With the consent of the Committee, 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

     (C) 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

     (D) With the consent of the Committee, any combination of the consideration
provided in the foregoing clauses (A), (B) and (C); and

          (c) A bona fide written representation and agreement, in such form as is prescribed by the
Committee, 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

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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 Committee 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 Committee 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 Committee, (i) shares of the Company’s Common Stock owned by the Optionee for at
least six months duly endorsed for transfer, or (ii) shares of the Company’s 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 Committee shall, in its absolute discretion, deem
necessary or advisable; and

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          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Committee 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
Committee 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 Committee 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 Committee in good faith shall be final
and binding upon the Optionee, the Company and all other interested persons. No member of the
Committee 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 Committee
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 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 pursuant to a DRO. After the death of the
Optionee, any exercisable portion of an Option may, prior to the time when such

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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), the Option may be transferred by the Optionee, in writing and with prior
written notice to the Committee, 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 Committee, 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 Committee 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

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

          5.9 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.

          5.10 Amendments, etc. 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)

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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

	 	  	 	 
	 
	 	 	 	 
	  

	 	 	 	 
	 
	 	 	 	 
	 

Address

	 	  	 	 
	 
	 	 	 	 
	Optionee’s Social Security Number:
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 

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EXHIBIT A

NON-QUALIFIED STOCK OPTION AGREEMENT

	 	 	 	 	 
	Optionee’s Name:

	 	 	 	 
	 

	 	 	 	 
	Optionee’s Address:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	Optionee’s Social Security Number:

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	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, the Option Shares shall vest and 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.

In accordance with Section 3.1(b) of the Agreement, no portion of the Option which has not become
vested and exercisable at Termination of Employment shall thereafter become vested and exercisable,
except as may be otherwise provided by the Committee.

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

Exhibit A

 

 

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 Non-Qualified Stock Option Agreement, dated ______(the
“Option Agreement”). The undersigned hereby elects to exercise the Option as follows:

     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”).

     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 he/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.

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature
	 
	 	 	 	 
	Receipt of the above is hereby acknowledged	 	 
	 
	 	 	 	 
	GEN-PROBE INCORPORATED,

a Delaware corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

Exhibit Bexv10w7

 

EXHIBIT 10.7

THE 2003 INCENTIVE AWARD PLAN

OF

GEN-PROBE INCORPORATED

Originally Adopted by the Board of Directors on March 3, 2003

Amendment Adopted by Board of Directors on May 13, 2003

Originally Approved by the Stockholders on May 29, 2003

Amendment and Restatement Adopted by Board of Directors on February 9, 2006

Amendment and Restatement Approved by the Stockholders on May 17, 2006

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

Third Amendment and Restatement Adopted by Board of Directors on February 8, 2007

     Gen-Probe Incorporated, a Delaware corporation, has adopted The 2003 Incentive Award Plan of
Gen-Probe Incorporated (the “Plan”) for the benefit of its eligible Employees, Consultants and
Directors.

     The purposes of the Plan are as follows:

     (1) To provide an additional incentive for Directors, Employees and Consultants (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 Directors, Employees and
Consultants 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 entity that conducts the general
administration of the Plan as provided herein. With reference to the administration of the Plan
with respect to Options and shares of Restricted Stock granted to Independent Directors, the term
“Administrator” shall refer to the Board. With reference to the administration of the Plan with
respect to any other Awards, the term “Administrator”

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shall refer to the Committee, except to the extent the Board has assumed the authority for
administration of the Plan as provided in Section 9.2.

     1.3. Award. “Award” shall mean an Option, a Restricted Stock award or a Stock Appreciation
Right which may be awarded or granted under the Plan (collectively, “Awards”).

     1.4. Award Agreement. “Award Agreement” shall mean a written agreement executed by an
authorized officer of the Company and the Holder, which shall contain such terms and conditions
with respect to an Award, as the Administrator shall determine, consistent with the Plan.

     1.5. Award Limit. “Award Limit” shall mean Five Hundred Thousand (500,000) shares of
Common Stock, as adjusted pursuant to Section 10.3 of the Plan.

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

     1.7. 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;

     (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;

     (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 662/3% 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

 2.

 

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.

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

     1.9. Committee. “Committee” shall mean the Board, or Compensation Committee of the Board,
or another committee or subcommittee of the Board, appointed as provided in Section 9.1.

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

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

     1.12. Consultant. “Consultant” shall mean any consultant or adviser (other than an
Employee) if:

     (a) the consultant or adviser renders bona fide services to the Company;

     (b) the services rendered by the consultant or adviser are not in connection with the offer
or sale of securities in a capital-raising transaction and do not directly or indirectly promote
or maintain a market for the Company’s securities; and

     (c) the consultant or adviser is a natural person who has contracted directly with the
Company to render such services.

     1.13. Director. “Director” shall mean a member of the Board, whether such Director is an
Employee or an Independent Director.

     1.14. 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.

     1.15. 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.

     1.16. Equity Restructuring. “Equity Restructuring” shall mean a non-reciprocal
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)

 3.

 

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.

     1.17. Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

     1.18. 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.

     1.19. Holder. “Holder” shall mean a person who has been granted or awarded an Award.

     1.20. Incentive Stock Option. “Incentive Stock Option” shall mean an Option which conforms
to the applicable provisions of Section 422 of the Code and which is designated as an Incentive
Stock Option by the Administrator.

     1.21. Independent Director. “Independent Director” shall mean a member of the Board who is
not an Employee.

     1.22. 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.

     1.23. Option. “Option” shall mean a stock option granted under Article IV of the Plan. An
Option granted under the Plan shall, as determined by the Administrator, be either a Non-Qualified
Stock Option or an Incentive Stock Option; provided, however, that Options granted to Independent
Directors and Consultants shall be Non-Qualified Stock Options.

     1.24. Performance Criteria. “Performance Criteria” shall mean the following business
criteria with respect to the Company, any Subsidiary or any division or operating unit: (a) net
income, (b) pre-tax income, (c) operating income, (d) cash flow, (e) earnings per share, (f) return
on equity, (g) return on invested capital or assets, (h) cost reductions or savings, (i) funds from
operations, (j) appreciation in the Fair Market

 4.

 

Value of Common Stock and (k) earnings before any one or more of the following items:
interest, taxes, depreciation or amortization.

     1.25. Plan. “Plan” shall mean The 2003 Incentive Award Plan of Gen-Probe Incorporated.

     1.26. Restricted Stock. “Restricted Stock” shall mean Common Stock awarded under Article
VII of the Plan.

     1.27. 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.

     1.28. Section 162(m) Employee. “Section 162(m) Employee” shall mean any Employee
designated by the Administrator as an Employee whose compensation for the fiscal year in which the
Employee is so designated or a future fiscal year may be subject to the limit on deductible
compensation imposed by Section 162(m) of the Code.

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

     1.30. Stock Appreciation Right. “Stock Appreciation Right” shall mean a stock appreciation
right granted under Article VIII of the Plan.

     1.31. 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.

     1.32. Substitute Award. “Substitute Award” shall mean an Option granted under the Plan
upon the assumption of, or in substitution for, outstanding equity awards previously granted by
another company or entity in connection with a corporate or similar transaction, such as a merger,
combination, consolidation or acquisition of property or stock; provided, however, that in no event
shall the term “Substitute Award” be construed to refer to an option granted in connection with the
cancellation and repricing of an Option.

     1.33. Termination of Consultancy. “Termination of Consultancy” shall mean the time when
the engagement of a Holder as a Consultant to the Company or a Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, by resignation, discharge,
death, disability or retirement; but excluding terminations where there is a simultaneous
engagement by or commencement of employment with the Company or any Subsidiary or a parent
corporation thereof (within the meaning of Section 422 of the Code). The Administrator, in its
absolute discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including, but not by way of limitation, the question of whether a
Termination of Consultancy resulted from a discharge for cause, and all questions of whether a
particular leave of

 5.

 

absence constitutes a Termination of Consultancy. Notwithstanding any other provision of the
Plan, the Company or any Subsidiary has an absolute and unrestricted right to terminate a
Consultant’s service at any time for any reason whatsoever, with or without cause, except to the
extent expressly provided otherwise in writing.

     1.34. Termination of Directorship. “Termination of Directorship” shall mean the time when
a Holder who is an Independent Director ceases to be a Director for any reason, including, but not
by way of limitation, a termination by resignation, removal, failure to be re-elected, 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 with respect to
Independent Directors.

     1.35. 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, until the consultancy terminates and (d) terminations of
employment due to retirement which are followed by the continuing service of the Holder as a
Director of the Company, until such service as a director terminates. 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; provided, however, that, with
respect to Incentive Stock Options, unless otherwise determined by the Administrator in its
discretion, a leave of absence, change in status from an employee to an independent contractor or
other change in the employee-employer relationship shall constitute a Termination of Employment if,
and to the extent that, such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section.

ARTICLE II.

SHARES SUBJECT TO PLAN

     2.1. Shares Subject to Plan.

     (a) The shares of stock subject to Awards shall be Common Stock, subject to Section 10.3 of
the Plan. The aggregate number of such shares which may be issued upon

 6.

 

exercise of such Options or rights or upon any such Awards under the Plan shall not exceed
Eight Million (8,000,000) shares. No additional shares may be authorized for issuance under the
Plan without stockholder approval (subject to adjustment as set forth in Section 10.3). The shares
of Common Stock issuable upon exercise of such Options or rights or upon any such Awards may be
either previously authorized but unissued shares or treasury shares.

     (b) Subject to Section 2.2, the number of shares available for issuance under the Plan shall
be reduced by: (i) one (1) share for each share of stock issued pursuant to (A) an Option granted
under Article IV, (B) an award of Restricted Stock under Article VII granted prior to May 17, 2006
and (C) a Stock Appreciation Right granted under Article VIII with respect to which the strike
price is at least one hundred percent (100%) of the Fair Market Value of the underlying Common
Stock on the date of grant; and (ii) two (2.0) shares for each share of Common Stock issued
pursuant to an award of Restricted Stock under Article VII granted after May 17, 2006.

     (c) The maximum number of shares of Common Stock which may be subject to Awards granted under
the Plan to any individual in any calendar year shall not exceed the Award Limit. To the extent
required by Section 162(m) of the Code, shares subject to Options that are canceled continue to be
counted against the Award Limit.

     2.2. Add-Back of Options and Other Rights. If any Option or other right to acquire shares
of Common Stock under any other Award under the Plan expires or is canceled without having been
fully exercised, or is exercised in whole or in part for cash as permitted by the Plan, then the
number of shares of Common Stock subject to such Option or other right but as to which such Option
or other right was not exercised prior to its expiration or cancellation may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1; provided that to the
extent there is issued a share of Common Stock pursuant to an Award that counted as two (2.0)
shares against the number of shares available for issuance under the Plan pursuant to Section
2.1(b) and such share of Common Stock again becomes available for issuance under the Plan pursuant
to this Section 2.2, then the number of shares of Common Stock available for issuance under the
Plan shall increase by two (2.0) shares. Furthermore, any shares subject to Awards which are
adjusted pursuant to Section 10.3 and become exercisable with respect to shares of stock of another
corporation shall be considered cancelled and may again be optioned, granted or awarded 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 Award under the Plan, in payment of the
exercise price thereof or tax withholding thereon, may not again be optioned, granted or awarded
hereunder, subject to the limitations of Section 2.1. If any shares of Restricted Stock are
surrendered by the Holder or repurchased by the Company pursuant to Section 7.4 or 7.5 hereof, such
shares may again be optioned, granted or awarded hereunder, subject to the provisions of Section
2.1. Notwithstanding the provisions of this Section 2.2, no shares of Common Stock may again be
optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to
qualify as an “incentive stock option” under Section 422 of the Code.

 7.

 

ARTICLE III.

GRANTING OF AWARDS

     3.1. Award Agreement. Each Award shall be evidenced by an Award Agreement. Award
Agreements evidencing Awards intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall contain such terms and conditions as may be necessary to
meet the applicable provisions of Section 162(m) of the Code. Award Agreements evidencing Incentive
Stock Options shall contain such terms and conditions as may be necessary to meet the applicable
provisions of Section 422 of the Code.

3.2. Provisions Applicable to Section 162(m) Employees.

     (a) The Committee, in its discretion, may determine whether an Award is to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code.

     (b) Notwithstanding anything in the Plan to the contrary, the Committee may grant any Award to
a Section 162(m) Employee that vests or becomes exercisable or payable upon the attainment of
performance goals which are related to one or more of the Performance Criteria, including
Restricted Stock the restrictions to which lapse upon the obtainment of performance goals which are
related to one or more of the Performance Criteria.

     (c) To the extent necessary to comply with the performance-based compensation requirements of
Section 162(m)(4)(C) of the Code, with respect to any Award granted under Article VII which may be
granted to one or more Section 162(m) Employees, no later than ninety (90) days following the
commencement of any fiscal year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section 162(m) of the Code), the
Committee shall, in writing, (i) designate one or more Section 162(m) Employees, (ii) select the
Performance Criteria applicable to the fiscal year or other designated fiscal period or period of
service, (iii) establish the various performance targets, in terms of an objective formula or
standard, and amounts of such Awards, as applicable, which may be earned for such fiscal year or
other designated fiscal period or period of service, and (iv) specify the relationship between
Performance Criteria and the performance targets and the amounts of such Awards, as applicable, to
be earned by each Section 162(m) Employee for such fiscal year or other designated fiscal period or
period of service. Following the completion of each fiscal year or other designated fiscal period
or period of service, the Committee shall certify in writing whether the applicable performance
targets have been achieved for such fiscal year or other designated fiscal period or period of
service. In determining the amount earned by a Section 162(m) Employee, the Committee shall have
the right to reduce (but not to increase) the amount payable at a given level of performance to
take into account additional factors that the Committee may deem relevant to the assessment of
individual or corporate performance for the fiscal year or other designated fiscal period or period
of service.

 8.

 

     (d) Furthermore, notwithstanding any other provision of the Plan, any Award that is granted to
a Section 162(m) Employee and is intended to qualify as performance-based compensation as described
in Section 162(m)(4)(C) of the Code shall be subject to any additional limitations set forth in
Section 162(m) of the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for qualification as
performance-based compensation as described in Section 162(m)(4)(C) of the Code, and the Plan and
such Awards shall be deemed amended to the extent necessary to conform to such requirements.

     3.3. Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of
the Plan, the Plan, and any Award granted or awarded 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 Awards granted or awarded hereunder shall be
deemed amended to the extent necessary to conform to such applicable exemptive rule.

     3.4. At-Will Employment. Nothing in the Plan or in any Award Agreement hereunder shall
confer upon any Holder any right to continue in the employ of, or as a Consultant for, the Company
or any Subsidiary, or as a Director of the Company, or shall interfere with or restrict in any way
the rights of the Company and any Subsidiary, which are hereby expressly reserved, 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 or consulting agreement between the Holder and the
Company and any Subsidiary.

ARTICLE IV.

GRANTING OF OPTIONS TO EMPLOYEES,

CONSULTANTS AND INDEPENDENT DIRECTORS

     4.1. Eligibility. Any Employee or Consultant selected by the Committee pursuant to Section
4.4(a)(i) shall be eligible to be granted an Option. Any Independent Director selected by the Board
pursuant to Section 4.5(a)(i) shall be eligible to be granted an Option. All grants shall be made
at the discretion of the Committee or the Board, as the case may be, and no person shall be
entitled to a grant of an Option as a matter of right.

     4.2. Disqualification for Stock Ownership. No person may be granted an Incentive Stock
Option under the Plan if such person, at the time the Incentive Stock Option is granted, owns stock
possessing more than ten percent (10%) of the total combined voting power of all classes of stock
of the Company or any then existing Subsidiary or parent corporation (within the meaning of Section
422 of the Code) unless such Incentive Stock Option conforms to the applicable provisions of
Section 422 of the Code.

 9.

 

     4.3. Qualification of Incentive Stock Options. No Incentive Stock Option shall be granted
to any person who is not an Employee.

     4.4. Granting of Options to Employees and Consultants.

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

     (i) Select from among the Employees or Consultants (including Employees or Consultants who
have previously been granted Awards under the Plan) such of them as in its opinion should be
granted Options;

     (ii) Subject to the Award Limit, determine the number of shares of Common Stock to be
subject to such Options granted to the selected Employees or Consultants;

     (iii) Subject to Section 4.3, determine whether such Options are to be Incentive Stock
Options or Non-Qualified Stock Options and whether such Options are to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code; and

     (iv) Determine the terms and conditions of such Options, consistent with the Plan;
provided, however, that the terms and conditions of Options intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code shall include,
but not be limited to, such terms and conditions as may be necessary to meet the applicable
provisions of Section 162(m) of the Code.

     (b) Upon the selection of an Employee or Consultant 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 Award Agreement with respect to
such Option.

     (c) Any Incentive Stock Option granted under the Plan may be modified by the Committee, with
the consent of the Holder, to disqualify such Option from treatment as an “incentive stock option”
under Section 422 of the Code.

     4.5. Granting of Options to Independent Directors.

     (a) Subject to Section 4.5(b), the Board shall from time to time, in its absolute discretion,
and subject to applicable limitations of the Plan:

     (i) Determine whether to grant Options to Independent Directors, and, in the event Options
are so granted, select from among the Independent Directors (including Independent Directors who
have previously been granted Awards under the Plan) such of them as in its opinion should be
granted Options;

 10.

 

     (ii) Subject to the Award Limit, determine the number of shares of Common Stock to be
subject to such Options granted to the selected Independent Directors; and

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

     (b) Upon the selection of an Independent Director to be granted an Option, and the grant of an
Option to an Independent Director, the Board 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 Board shall authorize one or more officers of the Company to prepare, execute and deliver the
Award Agreement with respect to such Option.

     4.6. Options in Lieu of Cash Compensation. Options may be granted under the Plan to
Employees and Consultants in lieu of cash bonuses that would otherwise be payable to such Employees
and Consultants and to Independent Directors in lieu of directors’ fees that would otherwise be
payable to such Independent Directors, pursuant to such policies that 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 and Consultants 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, and:

     (a) in the case of Incentive Stock Options, such price shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the date the Option is modified, extended or
renewed for purposes of Section 424(h) of the Code; and

     (b) in the case of Incentive Stock Options granted to an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary or parent corporation thereof (within the
meaning of Section 422 of the Code), such price shall not be less than 110% of the Fair Market
Value of a share of Common Stock on the date the Option is granted (or the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code).

     5.2. Option Term. The term of an Option granted to an Employee or Consultant 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; provided, further, however, that the term
of any Option granted after May 17, 2006 shall not be more than seven (7) years from the date the
Option is granted; and, provided, further, that, in the case of Incentive Stock Options, the term
shall not be more than five (5) years from the date the Incentive Stock Option is granted if the
Incentive Stock Option is

 11.

 

granted to an individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation thereof (within the meaning of Section 422 of the Code). Except as
limited by requirements of Section 422 of the Code and regulations and rulings thereunder
applicable to Incentive Stock Options, the Committee may extend the term of any outstanding Option
in connection with any Termination of Employment or Termination of Consultancy of the Holder, or
amend any other term or condition of such Option relating to such a termination; provided, however,
that any extended term shall not be more than seven (7) years from the date the Option is granted.

     5.3. Option Vesting

     (a) The period during which the right to exercise, in whole or in part, an Option granted to
an Employee or a Consultant 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; provided, however, that except for Options that vest based upon the satisfaction of
performance targets, which shall vest over a period of not less than one (1) year, and except as
provided in Sections 10.3 and 10.4, no Option granted to an Employee or a Consultant shall vest at
a rate more favorable to the Holder than on a monthly pro-rata basis over a three (3)-year period
measured from the date of grant. Subject to the provisions of the prior sentence, 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 or
Consultant vests and becomes exercisable.

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

     (c) To the extent that the aggregate Fair Market Value of stock with respect to which
“incentive stock options” (within the meaning of Section 422 of the Code, but without regard to
Section 422(d) of the Code) are exercisable for the first time by a Holder during any calendar year
(under the Plan and all other incentive stock option plans of the Company and any parent or
subsidiary corporation (within the meaning of Section 422 of the Code) of the Company), exceeds
$100,000, such Options or other options shall be treated as non-qualified stock options to the
extent required by Section 422 of the Code. The rule set forth in the preceding sentence shall be
applied by taking Options or other options into account in the order in which they were granted.
For purposes of this Section 5.3(c), the Fair Market Value of stock shall be determined as of the
time the Option or other options with respect to such stock is granted.

     5.4. Terms of Options Granted to Independent Directors. The price per share of the shares
subject to each Option granted to an Independent Director shall equal 100% of the Fair Market Value
of a share of Common Stock on the date the Option is granted. The

 12.

 

period during which the right to exercise, in whole or in part, an Option granted to an
Independent Director vests in the Holder shall be set by the Administrator and the Administrator
may determine that an Option may not be exercised in whole or in part for a specified period after
it is granted. The term of each Option granted to an Independent Director shall be determined by
the Administrator and shall be no greater than ten(10) years from the date the Option is granted;
provided, however, that the term of any Option granted after May 17, 2006 shall not be more than
seven (7) years from the date the Option is granted. No portion of an Option which is unexercisable
at Termination of Directorship shall thereafter become exercisable. Options granted to Independent
Directors under Section 4.5 shall be subject to such other terms and conditions as are determined
by the Administrator.

     5.5. Substitute Awards. Notwithstanding the foregoing provisions of this Article V to the
contrary, in the case of an Option that is a Substitute Award, the price per share of the shares
subject to such Option may be less than the Fair Market Value per share on the date of grant,
provided, that the excess of:

     (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of
the shares subject to the Substitute Award; over

     (b) the aggregate exercise price thereof; does not exceed the excess of;

     (c) the aggregate fair market value (as of the time immediately preceding the transaction
giving rise to the Substitute Award, such fair market value to be determined by the
Administrator) of the shares of the predecessor entity that were subject to the grant assumed or
substituted for by the Company; over

     (d) the aggregate exercise price of such shares.

 13.

 

     5.6. 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 with respect
to Employees or Consultants, except for Common Stock issued upon the exercise of Options that vest
based upon the satisfaction of performance targets, under which such repurchase right shall lapse
over a period of not less than one (1) year, and except as provided in Sections 10.3 and 10.4, such
repurchase right shall lapse at a rate no more favorable to the Holder than on a monthly pro-rata
basis over a three (3)-year period measured from the date of grant; provided further, however,
that, by action taken before or 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 Award 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, a
Termination of Consultancy, or a Termination of Directorship, as applicable, 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 Award 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 Award
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.

 14.

 

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:

     (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 10.1 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

15.

 

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;

     (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 Award Agreement and may be referred to on the certificates evidencing such shares. The
Holder shall give the Company prompt notice of any disposition of shares of Common Stock acquired
by exercise of an Incentive Stock Option within (a) two years from the date of granting (including
the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code)
such Option to such Holder or (b) one year after the transfer of such shares to such Holder.

16.

 

     6.6. Limitations on Exercise of Options Granted to Independent Directors. No Option
granted to an Independent Director may be exercised to any extent by anyone after the first to
occur of the following events:

     (a) The expiration of 12 months from the date of the Holder’s death;

     (b) The expiration of 12 months from the date of the Holder’s Termination of Directorship
by reason of his or her permanent and total disability (within the meaning of Section 22(e)(3)
of the Code); or

     (c) Except as otherwise provided in any Award Agreement, the expiration of three months
from the date of the Holder’s Termination of Directorship for any reason other than such
Holder’s death or his or her permanent and total disability, unless the Holder dies within said
three-month period.

     6.7. 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.

AWARD OF RESTRICTED STOCK

     7.1. Eligibility. Subject to the Award Limit, Restricted Stock may be awarded to any
Employee or Consultant who the Committee determines should receive such an Award.

     7.2. Award of Restricted Stock.

     (a) The Committee may from time to time, in its absolute discretion:

     (i) Select from among the Employees or Consultants (including Employees or Consultants who
have previously been granted other Awards under the Plan) such of them as in its opinion should
be awarded Restricted Stock; and

     (ii) Determine the purchase price, if any, and other terms and conditions applicable to
such Restricted Stock, consistent with the Plan.

     (b) The Committee shall establish the purchase price, if any, and form of payment for
Restricted Stock; provided, however, that such purchase price shall be no less than the par value
of the Common Stock to be purchased, unless otherwise permitted by applicable state law. In all
cases, legal consideration shall be required for each issuance of Restricted Stock.

     (c) Upon the selection of an Employee or Consultant to be awarded Restricted Stock, the
Committee shall instruct the Secretary of the Company to issue such Restricted Stock

17.

 

and may impose such conditions on the issuance of such Restricted Stock as it deems
appropriate, and the Committee shall authorize one or more officers of the Company to prepare,
execute and deliver the Award Agreement with respect to such Restricted Stock.

     7.3. Rights as Stockholders. Subject to Section 7.4, upon delivery of the shares of
Restricted Stock to the escrow holder pursuant to Section 7.6, the Holder shall have, unless
otherwise provided by the Committee, all the rights of a stockholder with respect to said shares,
subject to the restrictions in his Award Agreement, including the right to receive all dividends
and other distributions paid or made with respect to the shares; provided, however, that in the
discretion of the Committee, any extraordinary distributions with respect to the Common Stock shall
be subject to the restrictions set forth in Section 7.4.

     7.4. Restriction. All shares of Restricted Stock issued under the Plan (including any
shares received by holders thereof with respect to shares of Restricted Stock as a result of stock
dividends, stock splits or any other form of recapitalization) shall, in the terms of each
individual Award Agreement, be subject to such restrictions as the Committee shall provide, if any,
which restrictions may include, without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment with the Company, Company
performance and individual performance; provided, however, that with respect to shares of
Restricted Stock granted to Employees or Consultants, except for shares of Restricted Stock that
vest based upon the satisfaction of performance targets, under which such restrictions shall lapse
over a period of not less than one (1) year, and except in the event of the Holder’s death or
disability and except as provided in Sections 10.3 and 10.4, such restrictions shall lapse at a
rate no more favorable to the Holder than on a monthly pro-rata basis over a three (3)-year period
measured from the date of grant; provided further, however, that, except with respect to shares of
Restricted Stock granted to Section 162(m) Employees, by action taken after the Restricted Stock is
issued, the Committee may, on such terms and conditions as it may determine to be appropriate,
remove any or all of the restrictions imposed by the terms of the Award Agreement subject to the
limitations contained herein. Restricted Stock may not be sold or encumbered until all restrictions
are terminated or expire. If no consideration was paid by the Holder upon issuance, a Holder’s
rights in unvested Restricted Stock shall lapse, and such Restricted Stock shall be surrendered to
the Company without consideration, upon Termination of Employment or, if applicable, upon
Termination of Consultancy with the Company; provided, however, that the Committee in its sole and
absolute discretion may provide that such rights shall not lapse in the event of a Termination of
Employment because of the Holder’s death or disability.

     7.5. Repurchase of Restricted Stock. The Committee shall provide in the terms of each
individual Award Agreement that the Company shall have the right to repurchase from the Holder the
Restricted Stock then subject to restrictions under the Award Agreement immediately upon a
Termination of Employment or, if applicable, upon a Termination of Consultancy between the Holder
and the Company, at a cash price per share equal to the price paid by the Holder for such
Restricted Stock; provided, however, that the Committee in its sole and absolute discretion may
provide that no such right of

18.

 

repurchase shall exist in the event of a Termination of Employment following a “change of
ownership or control” (within the meaning of Treasury Regulation Section 1.162-27(e)(2)(v) or any
successor regulation thereto) of the Company or because of the Holder’s death or disability;
provided, further, that, except with respect to shares of Restricted Stock granted to Section
162(m) Employees, the Committee in its sole and absolute discretion may provide that no such right
of repurchase shall exist in the event of a Termination of Employment or a Termination of
Consultancy without cause or following any Change in Control of the Company or because of the
Holder’s retirement, or otherwise.

     7.6. Escrow. The Secretary of the Company or such other escrow holder as the Committee may
appoint shall retain physical custody of each certificate representing Restricted Stock until all
of the restrictions imposed under the Award Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.

     7.7. Legend. In order to enforce the restrictions imposed upon shares of Restricted Stock
hereunder, the Committee shall cause a legend or legends to be placed on certificates representing
all shares of Restricted Stock that are still subject to restrictions under Award Agreements, which
legend or legends shall make appropriate reference to the conditions imposed thereby.

     7.8. Section 83(b) Election. 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 Restricted Stock as of the
date of transfer of the Restricted 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.

     7.9. Restricted Stock in Lieu of Cash Compensation. Notwithstanding anything herein to the
contrary, shares of Restricted Stock may be granted to Independent Directors in lieu of directors’
fees which would otherwise be payable to such Independent Directors pursuant to such policies as
may be adopted by the Administrator from time to time.

ARTICLE VIII.

STOCK APPRECIATION RIGHTS

     8.1. Grant of Stock Appreciation Rights. A Stock Appreciation Right may be granted to any
Employee or Consultant selected by the Committee. A Stock Appreciation Right may be granted (a) in
connection and simultaneously with the grant of an Option, (b) with respect to a previously granted
Option, or (c) independent of an Option. A Stock Appreciation Right shall be subject to such terms
and conditions not inconsistent with the Plan as the Committee shall impose and shall be evidenced
by an Award Agreement.

19.

 

     8.2. Coupled Stock Appreciation Rights.

     (a) A Coupled Stock Appreciation Right (“CSAR”) shall be related to a particular Option and
shall be exercisable only when and to the extent the related Option is exercisable.

     (b) A CSAR may be granted to the Holder for no more than the number of shares subject to the
simultaneously or previously granted Option to which it is coupled.

     (c) A CSAR shall entitle the Holder (or other person entitled to exercise the Option pursuant
to the Plan) to surrender to the Company unexercised a portion of the Option to which the CSAR
relates (to the extent then exercisable pursuant to its terms) and to receive from the Company in
exchange therefor an amount determined by multiplying the difference obtained by subtracting the
Option exercise price from the Fair Market Value of a share of Common Stock on the date of exercise
of the CSAR by the number of shares of Common Stock with respect to which the CSAR shall have been
exercised, subject to any limitations the Committee may impose.

     8.3. Independent Stock Appreciation Rights.

     (a) An Independent Stock Appreciation Right (“ISAR”) shall be unrelated to any Option and
shall have a term set by the Committee; provided, however, that the term shall not be more than
seven (7) years from the date the ISAR is granted. An ISAR shall be exercisable in such
installments as the Committee may determine; provided, however, that except for ISARs that vest
based upon the satisfaction of performance targets, which shall vest over a period of not less than
one (1) year, and except as provided in Sections 10.3 and 10.4, no ISAR shall become exercisable at
a rate more favorable to the Holder than on a monthly pro-rata basis over a three (3)-year period
measured from the date of grant. Subject to the provisions of the prior sentence, at any time after
grant of an ISAR, 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 or
Consultant vests and becomes exercisable. An ISAR shall cover such number of shares of Common Stock
as the Committee may determine. The exercise price per share of Common Stock subject to each ISAR
shall be set by the Committee. An ISAR is exercisable only while the Holder is an Employee or
Consultant; provided that the Committee may determine that the ISAR may be exercised subsequent to
Termination of Employment or Termination of Consultancy without cause, or following a Change in
Control of the Company, or because of the Holder’s retirement, death or disability, or otherwise.

     (b) An ISAR shall entitle the Holder (or other person entitled to exercise the ISAR pursuant
to the Plan) to exercise all or a specified portion of the ISAR (to the extent then exercisable
pursuant to its terms) and to receive from the Company an amount determined by multiplying the
difference obtained by subtracting the exercise price per share of the ISAR from the Fair Market
Value of a share of Common Stock on the date of exercise of the ISAR by the number of shares of
Common Stock with respect to which

20.

 

the ISAR shall have been exercised, subject to any limitations the Committee may impose.

     8.4. Payment and Limitations on Exercise.

     (a) Payment of the amounts determined under Section 8.2(c) and 8.3(b) above shall be in cash,
in Common Stock (based on its Fair Market Value as of the date the Stock Appreciation Right is
exercised) or a combination of both, as determined by the Committee. To the extent such payment is
effected in Common Stock it shall be made subject to satisfaction of all provisions of Section 6.3
above pertaining to Options.

     (b) Holders of Stock Appreciation Rights may be required to comply with any timing or other
restrictions with respect to the settlement or exercise of a Stock Appreciation Right, including a
window-period limitation, as may be imposed in the discretion of the Committee.

ARTICLE IX.

ADMINISTRATION

     9.1. Committee. The Committee shall be the Compensation Committee of the Board, unless the
Board specifically assumes the functions of the Committee or appoints another committee to assume
such functions.

     9.2. 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 Award 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 Award Agreement provided that the rights
or obligations of the Holder of the Award that is the subject of any such Award Agreement are not
affected adversely. Any such interpretations and rules with respect to Incentive Stock Options
shall be consistent with the provisions of Section 422 of the Code. In its absolute discretion, the
Board may at any time and from time to time assume any and all rights and duties of the Committee
under the Plan, except with respect to matters which under Rule 16b-3 or Section 162(m) of the
Code, or any regulations or rules issued thereunder, are required to be determined in the sole
discretion of the Committee. Notwithstanding the foregoing, the full Board, acting by a majority of
its members in office, shall conduct the general administration of the Plan with respect to Options
granted to Independent Directors.

     9.3. 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.

     9.4. Compensation; Professional Assistance; Good Faith Actions. Members of the Committee
shall receive such compensation, if any, for their services as members as may

21.

 

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 Awards, 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.

22.

 

ARTICLE X.

MISCELLANEOUS PROVISIONS

     10.1. Not Transferable. No Award 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 Award has been
exercised, or the shares underlying such Award have been issued, and all restrictions applicable to
such shares have lapsed. No Award 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 other Award (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 or other Award may, prior to the time when such portion becomes unexercisable under the Plan
or the applicable Award 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.

     Notwithstanding the foregoing provisions of this Section 10.1, 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 Award 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

23.

 

approved by the Administrator after taking into account any state or federal tax or securities
laws applicable to transferable Non-Qualified Stock Options.

     10.2. Amendment, Suspension or Termination of the Plan.

     (a) Except as otherwise provided in this Section 10.2, 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. However, without approval of the Company’s stockholders given within twelve months before or
after the action by the Board, no action of the Board may, except as provided in Section 10.3,
increase the limits imposed in Section 2.1 on the maximum number of shares that may be issued under
the Plan.

     (b) No amendment, suspension or termination of the Plan shall, without the consent of the
Holder alter or impair any rights or obligations under any Award theretofore granted or awarded,
unless the Award itself otherwise expressly so provides. No amendment of the Plan shall have
application to any Award granted or awarded prior to the approval of such amendment, unless such
amendment is expressly and particularly stated to apply to prior awards.

     (c) No Awards 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 first to occur of
the following events:

     (i) The expiration of ten years from the date the Plan is adopted by the Board; or

     (ii) The expiration of ten years from the date the Plan is approved by the Company’s
stockholders under Section 10.5.

     (d) To the extent required by applicable law or listing requirements, stockholder approval
shall be required for any amendment of the Plan that either (i) materially expands the class of
individuals eligible to receive Awards under the Plan, (ii) materially increases the benefits
accruing to Employees and Consultants under the Plan or materially reduces the price at which
shares may be issued or purchased under the Plan, (iii) materially extends the term of the Plan, or
(iv) expands the types of Awards available for issuance under the Plan.

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

     (a) Subject to Section 10.3(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), reorganization, merger, consolidation, 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

24.

 

benefits intended to be made available under the Plan or with respect to an Award, 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 Awards may be granted or awarded (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 and
adjustments of the Award Limit);

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

     (iii) the grant or the exercise price with respect to any Award.

     (b) Subject to Sections 10.3(e) and 10.4, in the event of any transaction or event described
in Section 10.3(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 Award 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 Award 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 Award for an amount of cash equal to
the amount that could have been attained upon the exercise of such Award or realization of the
Holder’s rights had such Award been currently exercisable or payable or fully vested, or the
replacement of such Award with other rights or property selected by the Administrator in its
sole discretion;

     (ii) to provide that the Award cannot vest, be exercised or become payable after such
event;

     (iii) to provide that such Award shall be exercisable as to all shares covered thereby,
notwithstanding anything to the contrary in Section 5.3 or 5.4 or the provisions of such Award;

     (iv) to provide that such Award 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;

25.

 

     (v) to make adjustments in the number and type of shares of Common Stock (or other
securities or property) subject to outstanding Awards, and in the number and kind of outstanding
Restricted Stock, and/or in the terms and conditions of (including the grant or exercise price),
and the criteria included in, outstanding Awards and Awards 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 Award Agreement upon some or all shares of Restricted Stock or Common Stock may
be terminated and some or all shares of such Restricted Stock or 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 10.3(e), 3.2 and 3.3, the Administrator may, in its discretion,
include such further provisions and limitations in any Award, Award Agreement or certificate, as it
may deem equitable and in the best interests of the Company.

     (e) With respect to Awards that are granted to Section 162(m) Employees and are intended to
qualify as performance-based compensation under Section 162(m)(4)(C), no adjustment or action
described in this Section 10.3 or in any other provision of the Plan shall be authorized to the
extent that such adjustment or action would cause such Award to fail to so qualify under Section
162(m)(4)(C) or any successor provisions thereto. No adjustment or action described in this Section
10.3 or in any other provision of the Plan shall be authorized to the extent that such adjustment
or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such
adjustment or action shall be authorized to the extent such adjustment or action would result in
short-swing profits

26.

 

liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the
Administrator determines that the Award is not to comply with such exemptive conditions. The number
of shares of Common Stock subject to any Award shall always be rounded to the next whole number.

     (f) The existence of the Plan, any Award Agreement and the Awards 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.

     10.4. Change in Control. Notwithstanding any other provision of the Plan, in the event of
a Change in Control, each outstanding Award 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 Award and may be exercised for any or all of those shares as fully-vested
shares of Common Stock.

     10.5. Approval of Plan by Stockholders. The Plan shall be submitted for the approval of
the Company’s stockholders within twelve months after the date of the Board’s initial adoption of
the Plan. Awards may be granted or awarded prior to such stockholder approval; provided, however,
that such Awards shall not be exercisable nor shall such Awards vest prior to the time when the
Plan is approved by the stockholders; and provided, further, that if such approval has not been
obtained at the end of said twelve-month period, all Awards previously granted or awarded under the
Plan shall thereupon be canceled and become null and void. In addition, if the Board determines
that Awards other than Options or Stock Appreciation Rights which may be granted to Section 162(m)
Employees should continue to be eligible to qualify as performance-based compensation under Section
162(m)(4)(C) of the Code, the Performance Criteria must be disclosed to and approved by the
Company’s stockholders no later than the first stockholder meeting that occurs in the fifth year
following the year in which the Company’s stockholders previously approved the Performance
Criteria.

     10.6. 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
Award. 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 Award (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

27.

 

payment of any Award (or which may be repurchased from the Holder of such Award 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 Award 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.

     10.7. Forfeiture Provisions. Subject to the limitations of applicable law, pursuant to its
general authority to determine the terms and conditions applicable to Awards under the Plan, the
Administrator shall have the right to provide, in the terms of Awards 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, Termination of Consultancy or
Termination of Directorship for cause, then (b) (i) any proceeds, gains or other economic benefit
actually or constructively received by the Holder upon any exercise of the Award, or upon the
receipt or resale of any Common Stock underlying any Award, must be paid to the Company, and (ii)
the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be
forfeited.

     10.8. 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, Directors or Consultants 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.

     10.9. Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan
and the issuance and delivery of shares of Common Stock and the payment of money under the Plan or
under Awards granted or awarded 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 Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.

28.

 

     10.10. 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.

     10.11. 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.

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

     10.13. 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.

     10.14. Cancellation and Re-Grant of Awards. Neither the Administrator, the Board nor the
Committee shall have the authority to: (i) reprice any outstanding Awards under the Plan, or (ii)
cancel and re-grant any outstanding Awards under the Plan, unless the stockholders of the Company
have approved such an action.

* * *

     I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of
Gen-Probe Incorporated on March 3rd, 2003, adopted as initially amended and restated on February 9,
2006, adopted as amended a second time and restated on November 16, 2006, and adopted as amended a
third time and restated on February 8, 2007.

     Executed on this 9th day of February 2007.

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

* * *

     I hereby certify that the foregoing Plan was duly approved by the stockholders of Gen-Probe
Incorporated on May 29, 2003 and approved as initially amended and restated on May 17, 2006. The
Plan as amended and restated on November 16, 2006 and February 8, 2007 does not require additional
stockholder approval.

     Executed on this 9th day of February 2007.

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

29.

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