Document:

Exhibit 10.1

 

QUIDEL CORPORATION

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of August 20, 2004 (the “Effective Date”), by and between
QUIDEL CORPORATION, a Delaware corporation (the “Company”), and Caren L. Mason, an individual (“Mason”).

 

1.                                      Employment.  The Company hereby engages Mason as its
President and Chief Executive Officer and Mason accepts such employment upon
the terms and subject to the conditions set forth in this Agreement, commencing
immediately.

 

2.                                      Duties
and Responsibilities.  Mason
will report directly to the Board of Directors and shall perform such duties
and functions as are consistent with her role as President and Chief Executive
Officer.  Mason agrees that, during the
course of her employment with the Company, she will devote substantially all of
her business time, attention and efforts to the performance of her duties and
obligations hereunder.  Mason shall not,
without the prior written approval of the Board of Directors, and obtained in
each instance, directly or indirectly (i) accept employment or receive any
compensation for the performance of services from any business enterprise other
than the Company or (ii) enter into or be concerned or interested in any trade
or business or public or private work (whether for profit or otherwise and
whether as partner, principal, shareholder or otherwise), which may, in the
reasonable discretion of the Board, hinder or otherwise interfere with the
performance by Mason of her duties and obligations hereunder; provided,
however, that (a) Mason may serve on the board of directors of up to
three organizations of her choice, and she may participate in and hold
positions of responsibility with industry associations and organizations so
long as such commitments do not unreasonably interfere with Mason’s duties and
responsibilities to the Company and the Board of Directors does not object to
Mason’s directorship based upon reasonable concerns relating to the nature of
the company in question or its business, and (b) Mason may purchase and own up
to one percent (1%) of the outstanding stock of any class of any company, the
securities of which are publicly traded or of any privately held company for
which Mason owns such an interest as of the Effective Date.  Notwithstanding the foregoing, nothing in
this Agreement shall prohibit Mason from becoming involved or engaged in
charitable and civic activities, or from acting as an officer, director or
manager of family trusts and partnerships.

 

3.                                      Compensation.

 

(a)                                  Salary.
For all services to be rendered by Mason under this Agreement, the Company
agrees to pay Mason, beginning the Effective Date, a salary (the “Base Salary”)
equal to Four Hundred and Fifteen Thousand Dollars ($415,000) per year, payable
in the Company’s normal payroll cycle, less all amounts required by law to be
withheld or deducted. The Compensation Committee of the Board of Directors
shall review Mason’s Base Salary on a yearly basis.  The Compensation Committee, in its sole and absolute discretion
from time to time, may increase (but not decrease without Mason’s prior written
consent) Mason’s Base Salary.

 

 

(i)                                     Commencing
calendar year 2005, Mason is eligible to receive a cash performance bonus, to
be paid each year at the same time bonuses are generally paid to other senior
executives of the Company for the relevant fiscal year (but not later than
April 30) of up to 50% of Mason’s Base Salary, as may be determined by the
Compensation Committee of the Board of Directors. Calculation and payment of
the bonus is subject to the terms of any bonus plan and achievement of the
goals set from year to year by the Compensation Committee of the Board of
Directors for the relevant fiscal year.

 

(ii)                                  Commencing January 1,
2005 and ending December 31, 2007, Mason will be eligible to receive, at the
end of such three year cycle, a cash performance bonus based on the following:
(i) minimum bonus of $250,000, (ii) target bonus of $500,000, or
(iii) maximum bonus of $750,000 (the “Long Term Incentive Bonus”), as may
be determined by the Compensation Committee of the Board of Directors.  The Long Term Incentive Bonus will be paid
at the end of such three year cycle and at the same time bonuses are generally
paid to the Company’s senior executive officers for the calendar year ending
December 31, 2007 (but not later than April 30, 2008).  Calculation and payment of the Long Term
Incentive Bonus is subject to the terms of the plan and achievement of the
goals set by the Compensation Committee of the Board of Directors related to
such Long Term Incentive Bonus.

 

(iii)                               Mason will be reimbursed
for attorneys’ fees and costs incurred in connection with the review and
negotiation of this employment and related agreements between Mason and the
Company, not to exceed $10,000.

 

(b)                                  Stock
Options.

 

As of the Effective Date, the Compensation Committee of the Board of
Directors of the Company has granted Mason Incentive and Nonqualified Stock
Options to purchase up to 450,000 shares of Common Stock of the Company under
the terms and conditions set forth in that certain Stock Option Agreement
(Exhibit A hereto) executed by the Company and Mason concurrently with this
Agreement and otherwise in accordance with the Company’s 2001 Equity Incentive
Plan.  The exercise price of the Stock
Options shall be the fair market value of such shares at the time of the grant
date determined in accordance with the Company’s 2001 Equity Incentive Plan.

 

 

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(c)                                  Benefits.

 

During the Term of Mason’s employment hereunder:

 

(i)                                     Mason shall be
entitled to four weeks paid annual vacation leave consistent with the Company’s
policies for other senior executives of the Company.

 

(ii)                                  Mason will be
eligible to participate in the Company’s 401(k) benefit program which provides
for matching of 50% of the first 6% contributed by the employee.  All applicable 401(k) rules and regulations
apply for contributions made by employees.

 

(iii)                               The Company shall pay or
reimburse Mason for all reasonable and necessary travel and other business
expenses incurred or paid by Mason in connection with the performance of her
services under this Agreement consistent with the Company’s policies for other
senior executives of the Company as approved by the Compensation Committee.

 

(iv)                              Upon the commencement of
Mason’s employment, the Company shall provide and pay for the annual cost of
premiums for health, dental and medical insurance coverage for Mason and
Mason’s dependents consistent with the coverage generally made available by the
Company to senior executives of the Company.

 

(v)                                 In addition to the
benefits set forth above, Mason shall be entitled to participate in any other
policies, programs and benefits which the Compensation Committee may, in its
sole and absolute discretion, make generally available to its other senior
executives from time to time including, but not limited to, life insurance,
disability insurance, pension and retirement plans, stock plans, cash and/or
other bonus programs, and other similar programs.  The Company will provide Mason with a laptop computer and cell
phone for Mason’s business use

 

4.                                      Inducement
Bonus.  As of the Effective
Date, Mason shall be entitled to receive Fifty Thousand Dollars ($50,000),
payable immediately.  In addition, Mason
shall be entitled to receive One Hundred Thousand Dollars ($100,000) on
December 31, 2004 (the “Start Bonus”) payable on December 31, 2004, provided
that Mason remained in the employ of the Company through such date.

 

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5.                                      At
Will Employment. The Company and Mason acknowledge and agree that
Mason’s employment by the Company is expressly “at will” and not for a
specified term. This means that either party may terminate Mason’s employment
at any time for any reason, with or without cause. Any termination of Mason’s
employment is, however, subject to the terms and provisions of this Agreement.

 

6.                                      Severance.

 

(a)                                  Death
or Disability of Mason.  This
Agreement and Mason’s employment hereunder shall automatically terminate upon
Mason’s death or, at the option of the Company by written notice to Mason, upon
Mason’s Disability.  “Disability” shall
mean the disability of Mason, within the meaning of subsection 22(e)(3) of the
Internal Revenue Code of 1986, as amended, and where Mason is unable to work
and remains continuously so totally disabled for a period of one hundred and
eighty (180) days.  Such termination
shall take effect the last day of the month following the date of death or the
date such notice of termination for Mason’s Disability is given.  Mason’s compensation and other benefits
shall continue during the term of the disability through the effective date of
termination as set forth above.

 

(b)                                  Termination
by Company for Cause.

 

(i)                                     Definition of
Cause.  For purposes of this
Agreement “Cause” shall be limited to the following: (1) fraud;
(2) personal dishonesty involving money or property of the Company or that
results in material harm to the Company; (3) Mason’s willful misconduct that is
materially injurious to the Company; (4) a serious breach of a fiduciary duty
to the Company involving personal profit; (5) Mason’s conviction for a
felony (including via a guilty or nolo contendere plea), excluding traffic
offenses; (6) Mason’s willful and continued neglect of duties (other than any
such failure resulting from her incapacity because of physical or mental
illness); or (7) Mason’s material breach of the provisions of Sections 2, 7, 8,
9 or 10 of this Agreement; provided, however, that unsatisfactory job performance
shall not be considered Cause for termination of Mason’s employment by the
Company.  Mason shall be afforded a
reasonable opportunity to cure any willful neglect of her duties and any other
alleged material breach of this Agreement, including an alleged material breach
of Sections 2, 7, 8, 9 or 10 of this Agreement, according to the following
terms.  The Company’s Board of Directors
shall give Mason written notice stating with reasonable specificity the nature
of the circumstances determined by the Board of Directors in good faith to
constitute willful neglect or other material breach, and that failure to cure
or correct such circumstances or breach will result in termination of
employment for “Cause” under this Agreement. 
Mason shall have thirty (30) days from her receipt of such notice to
cure such circumstances or such breach if such breach is reasonably susceptible
of cure.  If, in 

 

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the reasonable good faith judgment of the
Board of Directors, the alleged breach is not reasonably susceptible of cure,
or such circumstances or material breach has not been satisfactorily cured
within such thirty (30) day period, such neglect of duties or material breach
shall thereupon constitute “Cause.”

 

(ii)                                  Procedure Upon
Termination by Company for Cause. 
Notwithstanding the foregoing, termination by the Company for Cause
shall not be effective until and unless (1) notice of intention to terminate
for Cause has been given by the Company within 90 days after the Company learns
of the act, failure or event constituting “Cause” under this Section (which is
not cured by Mason within any time period permitted for such cure above), and
(2) the Board of Directors has voted by a majority vote to terminate Mason for
Cause.

 

(c)                                  Termination
by Employee for Good Reason.

 

(i)                                     Definition of
Good Reason.  Mason shall have the
right to immediately terminate her employment for Good Reason.  For purposes of this Section “Good Reason”
shall mean the following: (1) the failure to elect and continue Mason as Chief
Executive Officer of the Company, or if the scope of Mason’s duties and
responsibilities are in the aggregate materially reduced; (2) a requirement by
the Company or the Board that Mason be relocated to a Company office more than
fifty (50) miles from the current executive offices of the Company, or the
Company requiring Mason to be based anywhere other than the principal executive
offices of the Company; (3) a Change in Control as defined in this Section 6
occurs, unless following a Change in Control the successor organization offers
to continue this Agreement for two (2) years following such Change in Control
or offers Mason a two (2) year contract incorporating substantially all of the
terms of this Agreement and maintaining, at least, her then current salary and
benefits; (4) any reduction in Mason’s salary or performance bonus percentage
target, or a material reduction in Mason’s total benefit package, provided that
the Company does not pay Mason an appropriate cash amount to reimburse her for
the benefit reduction, or (5) a material breach by the Company of any of the
terms of this Agreement if the breach is not corrected within thirty (30) days
after written notice of such breach is given to the Company.

 

(ii)                                  Procedure Upon Termination
by Employee for Good Reason. 
Notwithstanding the foregoing, termination by Mason for Good Reason
shall not be effective until and unless notice of intention to terminate for
Good Reason has been given by Mason within 30 days after Mason learns of the
act, failure or event constituting 

 

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“Good Reason” under this Section (which is
not cured by the Company within such 30 day period).

 

(d)                                  Severance.  If this Agreement is terminated by Mason for
Good Reason or by the Company without cause, Mason shall be entitled to receive
the following severance payments and benefits (the “Severance Benefit”):

 

(i)                                     continuation of
her base salary, less applicable withholdings, at the salary rate in effect at
the time of the termination of her employment, payable in the ordinary course
of the Company’s business as if Mason were remaining in the employ of the
Company, for a period (the “Severance Benefit Period”) of eighteen (18) months
from the date of termination, except that in the event that such termination
occurs in connection with a Change in Control and constitutes a “Qualifying
Termination” (as defined in Section 5 of the Agreement Re: Change in
Control (Exhibit B hereto)), then Mason shall be entitled to receive (in
lieu of the Severance Benefits provided in this Section 6(d)) the severance
payment and benefits provided in the Agreement Re: Change in Control (Exhibit B
hereto), executed concurrently herewith;

 

(ii)                                  consideration by the
Board of Directors for accelerated vesting of any stock options granted to
Mason; and

 

(iii)                               payment during the
Severance Benefit Period (or until such earlier date that substantially
equivalent or better benefits are provided by a successor employer) of the cost
of COBRA insurance premiums for all health insurance, and the cost of life
insurance and disability insurance fringe benefits on a monthly basis, in
advance.

 

(e)                                  Definition
of Change in Control.  A “Change in
Control” with respect to the Company shall have the meaning, and shall be
deemed to have occurred, for purposes of this Agreement, as set forth in and in
accordance with Section 3 of the Agreement Re: Change in Control (Exhibit
B hereto), executed concurrently with this Agreement.

 

7.                                      Inventions.

 

(a)                                  Disclosure.  Mason will disclose promptly to the Company
each Invention (as defined below), whether or not reduced to practice, that is
conceived or learned by Mason (either alone or jointly with others) during the
term of her employment by the Company. Further, Mason will disclose in
confidence to the Company all patent applications filed by or on behalf of
Mason during the term of her employment and for a period of one (1) year
thereafter.

 

For purposes of this Agreement, the term
“Invention” includes, without limitation, any invention, discovery, know-how,
idea, trade secret, technique, formula, machine, method, process, use,
apparatus, product, device, composition, code, design, program, confidential
information, proprietary information, or configuration of any kind, that is
discovered, conceived, developed, improved on, made or produced by Mason (alone
or in conjunction with others) 

 

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during the duration of Mason’s
employment and for a period of one (1) year thereafter, and which:

 

(i)                                     relates at the
time of conception or reduction to practice of the invention, in any manner, to
the business of the Company, including actual or demonstrably anticipated
research or development;

 

(ii)                                  results from or is
suggested by work performed by Mason for or on behalf of the Company; or

 

(iii)                               results from the use of
equipment, supplies, facilities, information, time or resources of the Company.

 

The term Invention will also include any improvements to an Invention,
and will not be limited to the definition of patentable or copyrightable
invention as contained in the United States patent or copyright laws.

 

(b)                                  Company
Property; Assignment. Mason acknowledges and agrees that all Inventions
will be the sole property of the Company, including, without limitation, all
domestic and foreign patent rights, rights of registration or other protection
under the copyright laws, or other rights, pertaining to the Inventions. Mason
hereby assigns all of her right, title and interest in any such Inventions to
the Company.

 

(c)                                  Exclusion
Notice. The assignment by Mason of Inventions under this Agreement does
not apply to any Inventions that are expressly excluded from coverage pursuant
to Section 2870 of the California Labor Code. Accordingly, Mason is not
required to assign an idea or invention for which all of the following
are applicable:

 

(i)                                     No equipment,
supplies, facility or trade secret information of the Company was used and the
invention or idea was developed entirely on Mason’s own time;

 

(ii)                                  The invention or idea
does not relate to the business of the Company;

 

(iii)                               The invention or idea
does not relate to the Company’s actual or demonstrably anticipated research or
development; and

 

(iv)                              The invention or idea
does not result from any work performed by Mason for the Company.

 

As used in this Section 7(c), “invention” will have the same
meaning as “invention” as used in Section 2870 of the California Labor Code.

 

(d)                                  Patents
and Copyrights; Attorney-in-Fact. Mason agrees to assist the Company
(at the Company’s expense) in any reasonable way the Company deems necessary or
appropriate from time to time to apply for, obtain and enforce patents on, and
to apply for, obtain 

 

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and enforce copyright
protection and registration of, Inventions in any and all countries.  To that end, Mason will (at the Company’s
expense), without limitation, testify in any suit or other proceeding involving
any Invention, execute all documents that the Company reasonably determines to
be necessary or convenient for use in applying for and obtaining patents or
copyright protection and registration thereon and enforcing same, and execute
all necessary assignments thereof to the Company or parties designated by it.
Mason’s obligations to assist the Company in obtaining and enforcing patents or
copyright protection and registration for Inventions will continue beyond
termination of her employment, but the Company will compensate Mason at a
reasonable rate after such termination for the time actually spent by Mason at
the Company’s request on such assistance. Mason hereby irrevocably appoints the
Company, and its duly authorized officers and agents, as Mason’s agent and
attorney-in-fact to act for and on behalf of Mason in filing all patent
applications, applications for copyright protection and registration
amendments, renewals, and all other appropriate documents in any way related to
Inventions.

 

8.                                      Nondisclosure
of Confidential Information. Except in the performance of her duties
hereunder, Mason will not disclose to any person or entity or use for her own
direct or indirect benefit any Confidential Information (as defined below)
pertaining to the Company obtained by Mason in the course of her employment
with the Company. For purposes of this Agreement, “Confidential Information”
will include all of the Company’s confidential or proprietary information,
including, without limitation, any information encompassed in all strategic
plans, insurance plans, Inventions, and any trade secrets, reports,
investigations, experiments, research or developmental work, work in progress,
drawings, designs, plans, proposals, codes, marketing and sales programs,
financial data and records financial projections, cost summaries, pricing
formula, and all concepts or ideas, materials or information related to the
business, products or sales of the Company or the Company’s customers; provided,
however, that Confidential Information shall not include
information, documents or data that (i) is or subsequently becomes publicly
available or generally known in the industry without Mason’s breach of any
obligation of confidentiality owed to the Company; (ii) was known to Mason
prior to her original employment by the Company; (iii) becomes known to Mason from
a source other than the Company (which is not breaching an obligation to the
Company) and which Mason learns of outside the scope of her employment with the
Company; or (iv) is required to be disclosed by law or other governmental
authority.

 

9.                                      Return
of Materials at Termination. In the event of any termination of Mason’s
employment for any reason whatsoever, Mason will promptly deliver to the
Company all documents, data, and other information pertaining to Inventions and
Confidential Information. Mason will not take with her any documents or other
information, or any reproduction or excerpt thereof, containing or pertaining
to any Inventions or Confidential Information, other than (i)  documents relating to Mason’s compensation
or benefits provided by the Company, and (ii) copies of personal notes or
memoranda prepared or created by Mason in her capacity as an officer and/or
director of the Company and evidencing her fulfillment of her fiduciary duties
with respect to the Company.

 

10.                               Non-Solicitation.
Mason agrees that so long as she is employed by the Company and for a period of
one (1) year after termination of her employment for any reason, she will not
(a) directly or indirectly solicit, induce or attempt to solicit or induce any
Company employee to 

 

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discontinue his or her
employment with the Company; (b) usurp any opportunity of the Company of which
Mason became aware during her tenure at the Company; or (c) directly or
indirectly solicit or induce or attempt to influence any person or business
that is an account, customer or client of the Company to restrict or cancel the
business of any such account, customer or client with the Company.

 

11.                               No
Waiver. The waiver by either party of a breach of any provision of this
Agreement will not operate as or be construed as a waiver of any subsequent
breach thereof.

 

12.                               Notices.
Any and all notices referred to herein will be sufficiently furnished if in
writing, and sent by registered or certified mail, postage prepaid, to the
respective parties at the following addresses or such other address as either
party may from time to time designate in writing:

 

To the Company:                                                    QUIDEL
CORPORATION

10165 McKellar Court

San Diego, CA  92121

Attention: 
Chairman of the Board of Directors

 

To Mason:                                                                                     Caren
L. Mason

2523 Park Ridge Drive

Escondido, CA  92025-7775

 

13.                               Assignment.
This Agreement may not be assigned by Mason. This Agreement will be binding
upon the Company’s successors and assigns, including any entity that acquires
all or substantially all of the assets or business of the Company.

 

14.                               Entire
Agreement. This Agreement, together with the Stock Option Agreement
attached hereto as Exhibit A and the Agreement Re: Change in Control attached
hereto as Exhibit B, supersedes any and all prior written or oral agreements
between Mason and the Company, and contains the entire understanding of the
parties hereto with respect to the terms and conditions of Mason’s employment
with the Company.

 

15.                               Governing
Law. This Agreement will be construed and enforced in accordance with
the internal laws and decisions of the State of California.

 

16.                               Arbitration.
In the event of any controversy, dispute or claim arising out of or related to
this Agreement or Mason’s employment by the Company, the parties shall
negotiate in good faith in an attempt to reach a mutually acceptable settlement
of such dispute.  If negotiations in
good faith do not result in a settlement of any such controversy, dispute or
claim, it shall be finally settled by expedited binding arbitration, conducted
in San Diego, California, in accordance with the National Rules of the American
Arbitration Association governing employment disputes.   With respect to discovery in any such arbitration, the parties
incorporate herein by reference Section 1283.05 of the California Code of Civil
Procedure.

 

17.                               Authorization.
The undersigned officer of the Company represents that he is fully
authorized and empowered to execute and deliver this Agreement on behalf of the

 

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Company, and the Company
represents and warrants that all necessary corporate action has been taken to
approve and authorize the Company’s entry into and performance of this
Agreement.

 

18.                               Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall together constitute one in the same Agreement.

 

[Remainder of
page left blank intentionally, signatures on following page]

 

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IN WITNESS
WHEREOF, the parties hereto have executed and delivered this Agreement as of
the Effective Date.

 

	
   

  	
  QUIDEL CORPORATION, a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark A. Pulido

  	
   

  
	
   

  	
  Printed Name:  Mark A. Pulido

  
	
   

  	
  Title: 
  Chairman of the Board of Directors,

  
	
          
  

  	
            Quidel
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Caren L. Mason

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Caren L. Mason

  	
   

  

 

11

 

Exhibit
A

 

Stock
Option Agreement

 

[See
attached.]

 

 

Exhibit
B

 

Agreement
Re:  Change in Control

 

[See
attached.]Exhibit 10.2

 

QUIDEL CORPORATION

 

STOCK OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT (this “Agreement”) is made effective as of August 20, 2004 (the “Grant Date”), by and between QUIDEL
CORPORATION, a Delaware corporation (the “Company”), and Caren L. Mason (“Optionee”).

 

A.                                   Concurrent
with the execution and delivery of this Agreement, the Company and Optionee
have entered into that certain Employment Agreement pertaining to Optionee’s
appointment to the office of Chief Executive Officer.

 

B.                                     As
a part of Optionee’s appointment, and effective the Grant Date, the Company has
granted to Optionee, pursuant to the Company’s 2001 Equity Incentive Plan (the
“Plan”), a nonstatutory stock option and incentive stock option that is
intended to qualify under Section 422 of the Internal Revenue Code
(collectively, the “Option”) to
purchase shares of the common stock of the Company (the “Common Stock”) on the terms and
conditions set forth herein.  This
Agreement is intended to memorialize the terms and conditions upon which the
Board of Directors granted the Option to Optionee.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

AGREEMENT

 

1.                                      Grant
of Option.  Optionee may, at
Optionee’s election and upon the terms and conditions set forth herein,
purchase all or any part of an aggregate of 450,000 shares of Common Stock (the
“Optioned Shares”) at the price
per share (the “Option Price”)
set forth on the term sheet (the “Term Sheet”) attached as Exhibit A
hereto.  The Option Price equals the
fair market value of the Common Stock determined in accordance with the Plan.

 

2.                                      Vesting
Schedule.

 

The Option shall vest and become exercisable
as set forth in the Term Sheet.

 

3.                                      Exercise
of Option.

 

(a)                                  Extent of Exercise.  The Option may be exercised at the time or
after installments vest as specified in the Term Sheet with respect to all or part
of the Optioned Shares covered by such vested installments, subject to the
further restrictions contained in this Agreement.  In the event that Optionee exercises the Option for less than the
full number of Optioned Shares included within a vested installment, Optionee
shall be entitled to exercise the Option (in one or more subsequent increments)
for the balance of the Optioned Shares included in said vested installment; provided,
however, that in no event shall Optionee be entitled to exercise the
Option for fractional shares of Common Stock or for a number of shares
exceeding the maximum number of Optioned Shares.

 

 

(b)                                 Procedure.  The Option shall be deemed to be exercised
when the Secretary of the Company receives written notice of exercise from or
on behalf of Optionee, together with payment of the Option Price and any
amounts required under Section 3(c). 
The Option Price shall be payable upon exercise in (i) legal tender of
the United States; (ii) capital stock of the Company delivered in transfer to
the Company by or on behalf of Optionee, duly endorsed in blank or accompanied
by stock powers duly endorsed in blank, with signatures guaranteed in
accordance with the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), if required by the Company (valued at fair market value as of the
exercise date); or (iii) such other consideration as the Company may deem
acceptable in any particular instance; provided, however, that the Company may,
in its discretion, allow exercise of the Option in a broker-assisted or similar
transaction in which the Option Price is not received by the Company until
promptly after exercise.

 

(c)                                  Withholding Taxes.  Whenever shares of Common Stock are to be
issued upon exercise of the Option, the Company shall have the right to require
Optionee to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirements, as may be applicable and prior to
such issuance.  The Company may, in its
discretion, allow satisfaction of tax withholding requirements by accepting
delivery of Common Stock.

 

With respect to that portion of the Option that is intended to qualify
as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”), such portion of the Option will be
interpreted accordingly.  Section 422 of
the Code provides, among other things, that the Optionee will generally not be
taxed upon the exercise of a stock option that qualifies as an incentive stock
option provided the Optionee does not dispose of the shares of Common Stock
acquired upon exercise of such option until the later of two years after such
option is granted to the Optionee and one year after such option is
exercised.  However, the amount by which
the fair market value of the shares of Common Stock acquired upon exercise of
such option exceeds the Option Price on the date of exercise will be included
as a positive adjustment in the calculation of the Optionee’s “alternative
minimum taxable income” in the year of exercise.

 

Notwithstanding anything to the contrary herein, Section 422 of the
Code provides that incentive stock options (including, possibly, the Option)
shall not be treated as incentive stock options if and to the extent that the
aggregate fair market value of shares of Common Stock (determined as of the
time of grant) with respect to which such incentive stock options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and its subsidiaries) exceeds $100,000, taking options
into account in the order in which they were granted.  Thus, if and to the extent that any shares of Common Stock issued
under a portion of the Option exceeds the foregoing $100,000 limitation, such
shares shall not be treated as issued under an incentive stock option pursuant
to Section 422 of the Code.

 

4.                                      Term
of Option and Effect of Termination. 
No portion of the Option shall vest after termination of Optionee’s
employment, regardless of the reason for such termination.  In the event that Optionee shall cease to be
an employee of the Company, the Option shall be exercisable, to the extent
already exercisable at the date Optionee ceases to be an employee and
regardless of the reason Optionee ceases to be an employee, for a period of 365
days after that 

 

2

 

date, and shall then expire and
terminate.  In the event of the death of
Optionee while she is an employee of the Company or within the period after
termination of such status during which she is permitted to exercise the
Option, the Option may be exercised by any person or persons designated by
Optionee on a beneficiary designation form adopted by the administrator for
such purpose or, if there is no effective beneficiary designation form on file
with the Company, by the executors or administrators of Optionee’s estate or by
any person or persons who shall have acquired the Option directly from Optionee
by her will or the applicable laws of descent and distribution.  Unless earlier terminated as provided in
this Section, the Option shall automatically expire and terminate, and thereby
become unexercisable, on the tenth (10th) anniversary of the Grant Date.

 

5.                                      Anti-Dilution
Adjustments.  If the outstanding
shares of Common Stock of the Company are increased, decreased, changed into or
exchanged for a different number or kind of shares of the Company through
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split, upon authorization of the Board or the Compensation
Committee, an appropriate and proportionate adjustment shall be made in the
number or kind of Optioned Shares and the Option Price; provided, however, that no
such adjustment need be made if, upon the advice of counsel, the Board or the
Compensation Committee determines that such adjustment may result in the
receipt of federally taxable income to Optionee, to holders of other derivative
securities of the Company or holders of Common Stock or other classes of the
Company’s securities.

 

6.                                      Change
in Control.

 

(a)                                  Acceleration
of Vesting.  If a Change in Control
(as defined below) of the Company occurs, then notwithstanding the vesting
provisions of Section 2 or anything else herein to the contrary, all Optioned
Shares shall automatically vest and become exercisable immediately prior to
such Change in Control, if Optionee is an employee of the Company at that time
or immediately prior thereto.  For
purposes of this Agreement, a “Change in Control” means the following:

 

(i)                                     Except
as provided by subparagraph (iii) hereof, the acquisition (other than from the
Company) by any person, entity or “group”, within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (excluding, for this purpose, the Company or its
subsidiaries, or any executive benefit plan of the Company or its subsidiaries
which acquires beneficial ownership of voting securities of the Company), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of forty percent (40%) or more of either the then outstanding
shares of common stock or the combined voting power of the Company’s then
outstanding voting securities entitled to vote generally in the election of
directors; or

 

(ii)                                  Individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(as of the date hereof the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board of Directors of the Company,
provided that any person becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s stockholders, is or
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of an individual
whose 

 

3

 

initial assumption of office is
in connection with an actual or threatened election contest relating to the
election of the Directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board; or

 

(iii)                               Approval
by the stockholders of the Company of a reorganization, merger or consolidation
with any other person, entity or corporation, other than

 

(1)                                  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
another entity) more than sixty percent (60%) of the combined voting power of
the voting securities of the Company or such other entity outstanding
immediately after such merger or consolidation, or

 

(2)                                  a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no person acquires forty percent (40%) or
more of the combined voting power of the Company’s then outstanding voting
securities; or

 

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

 

(b)                                 Provision for Option Upon Change in Control.  As
of the effective time and date of any Change in Control, this Agreement and the
Option will automatically terminate unless: 
(a) provision is made in writing in connection with such transaction for
the continuance of this Agreement and the Option and for the assumption of this
Agreement and the Option, or for the substitution for such Option of new awards
covering the securities of a successor entity or an affiliate thereof, with
appropriate adjustments as to the number and kind of securities and exercise
prices, in which event this Agreement and the Option will continue or be
replaced, as the case may be, in the manner and under the terms so provided; or
(b) the Board otherwise provides in writing for such adjustments as it deems
appropriate in the terms and conditions of the Option, including, without
limitation, providing for the cancellation of the Option and its automatic
conversion into the right to receive the securities, cash or other
consideration that Optionee would have been entitled to receive upon
consummation of such Change in Control had such shares been issued and
outstanding immediately prior to the effective date and time of the Change in
Control (net of the appropriate option exercise prices).  If, pursuant to the foregoing provisions of
this Section 6(b), this Agreement and the Option terminate by reason of
the occurrence of a Change in Control without provision for any of the
action(s) described in clause (a) or (b) hereof, then Optionee will have the
right, at such time prior to the consummation of the Change in Control as the
Board designates, to exercise or receive the full benefit of the Option to the
full extent not theretofore exercised.  Further, in the event that this Agreement and
the Option terminate by reason of the occurrence of a Change in Control without
provision for any of the action(s) described in clause (a) or (b) hereof and
Optionee has not received the full benefit of the Option, then Optionee shall have at least five (5) business
days in which to exercise the Option (not including any days in which
Optionee is restricted from exercising the Option or 

 

4

 

selling the Optioned Shares
under applicable rules and policies of the Company).  Such five (5)
business day period shall be measured from the date upon which such Option
becomes fully exercisable pursuant to Section 6(a) hereof and Optionee is
notified of the same.

 

7.                                      Delivery
of Certificates.  As soon as
practicable after any proper exercise of the Option in accordance with the
provisions of this Agreement, the Company shall deliver to Optionee at the main
office of the Company, or such other place as shall be mutually acceptable, a
certificate or certificates representing such shares of Common Stock to which
Optionee is entitled upon exercise of the Option.

 

8.                                      No
Rights in Shares Before Issuance and Delivery.  Neither Optionee, her estate nor her
transferees by will or the laws of descent and distribution shall be, or have
any rights or privileges of, a stockholder of the Company with respect to any
shares issuable upon exercise of the Option, unless and until certificates
representing such shares shall have been issued and delivered.  No adjustment will be made for a dividend or
their rights where the record date is prior to the date such stock certificates
are issued.

 

9.                                      Nonassignability.  The Option is not assignable or transferable
by Optionee except by will, by the laws of descent and distribution, pursuant
to a qualified domestic relations order, or, in the discretion of the Company
and under circumstances that would not adversely affect the interests of the
Company, pursuant to a nominal transfer that does not result in a change in
beneficial ownership, or as otherwise permitted by rule or interpretation of
the Securities and Exchange Commission or its staff as an exception to the
general proscription on transfer of derivative securities set forth in Rule
16b-3 (or any successor rule) under the Exchange Act or interpretation thereof.  In addition, during Optionee’s lifetime the
Option (as a whole or in part) may also be transferred to one or more members
of Optionee’s immediate family, or a partnership whose members include only
Optionee and/or members of Optionee’s immediate family, or a trust for the
benefit of only Optionee and/or members of Optionee’s family.  Any permitted transfer of the Option shall
not prevent or otherwise modify termination of the Option and its vesting
following Optionee’s termination of employment (as provided in Section 4 above)
or in connection with a Change in Control (as provided in Section 6
above).  In addition, the Option shall
terminate immediately if and to the extent it has been transferred to a
partnership or trust as permitted above and any person who is not a member of
Optionee’s immediate family becomes a member of such partnership or a
beneficiary of such trust.  As used
herein, Optionee’s immediate family includes only Optionee’s spouse, parents or
other ancestors, and children and other direct descendants of Optionee or of
Optionee’s spouse (including such ancestors and descendants by adoption).  During the lifetime of Optionee, the Option
shall be exercisable only by Optionee (or Optionee’s permitted transferee(s))
or her or their guardian or legal representative.

 

10.                               Certain
Representations and Warranties. 
Optionee expressly acknowledges, represents and agrees as follows:

 

(a)                                  If Optionee proposes
to transfer all or any part of the Option or the Optioned Shares or uses Common
Stock of the Company to pay the Option Price, Optionee has been advised to
consult with a competent tax advisor regarding the applicable tax consequences
prior to making such transfer or utilizing such Common Stock to exercise the
Option; and

 

5

 

(b)                                 If Optionee is (as
expected) a person subject to the provisions of Section 16 of the Exchange
Act, Optionee has been advised to consult with a competent federal securities
law advisor as to the reporting obligations and potential liability for profits
under said Section 16 with respect to the granting, exercise and transfer
of the Option.

 

11.                               No
Employment Rights or Obligations. 
Nothing in the Plan or in this Agreement shall be construed to create or
imply any contract of employment between the Company and Optionee.  Nothing in the Plan or in this Agreement
shall confer upon Optionee any right to continue in the employ of the Company
or confer upon the Company any right to require continued employment by
Optionee.  Optionee acknowledges and agrees
that the employment of Optionee by the Company is expressly at the will of the
Company, and the Company may terminate Optionee’s employment by the Company at
any time for any reason or for no reason. 
Similarly, Optionee may terminate her employment with the Company at any
time for any reason or for no reason. 
Any questions as to whether and when there has been a termination of
Optionee’s employment, the reason (if any) for such termination, and/or the
consequences thereof under the terms of the Plan, shall be determined by the
Board in its sole discretion, and the Board’s determination thereof shall be
final, binding and conclusive.

 

12.                               Governing
Law.  This Agreement shall be
governed by, interpreted under, and construed and enforced in accordance with
the internal laws, and not the laws pertaining to conflicts or choice or laws,
of the State of California applicable to agreements made and to be performed
wholly within the State of California.

 

13.                               Agreement
Binding on Successors.  The
terms of this Agreement shall be binding upon the executors, administrators,
heirs, successors, transferees and assigns of Optionee.

 

14.                               Necessary
Acts.  Optionee agrees to
perform all acts and execute and deliver any documents that may be reasonably
necessary to carry out the provisions of this Agreement, including but not
limited to all acts and documents related to compliance with federal and/or
state securities and/or tax laws.

 

15.                               Future
Options.  The parties
acknowledge and agree that future stock options or equity incentive awards, if
any, that may be granted by the Company to Optionee shall have such terms and
conditions as shall be determined by the Board of Directors or Compensation
Committee and may not, for example, have the automatic acceleration of vesting
provisions or extended exercise periods as are provided for in this Agreement.

 

IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement effective as of the Grant Date.

 

	
  QUIDEL CORPORATION,

  a Delaware corporation

  	
   

  	
  CAREN L. MASON

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ 
  Mark A. Pulido

  	
   

  	
   

  	
  By:

  	
  /s/ 
  Caren L. Mason

  	
   

  
	
  Name: 
  Mark A. Pulido

  	
   

  	
  Name: 
  Caren L. Mason

  
	
  Title:   
  Chairman of the Board of Directors

  	
   

  	
   

  
							

 

6

 

By his signature below, the spouse of Optionee, if Optionee is legally
married as of the date of execution of this Agreement, acknowledges that he has
read this Agreement and is familiar with the terms and provisions thereof, and
agrees to be bound by all the terms and conditions of said Agreement.

 

	
   

  	
  /s/ Jeffrey A. Mason

  	
   

  
	
   

  	
  Spouse’s Signature

  
	
   

  	
   

  
	
   

  	
  Jeffrey A. Mason

  	
   

  
	
   

  	
  Printed Name

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
  August 20, 2004

  	
   

  
				

 

By her signature below, Optionee represents that she is not legally
married as of the effective date of this Agreement.

 

	
   

  	
   

  
	
   

  	
  Caren L. Mason

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  

 

7

 

Exhibit A

 

Term Sheet

 

See Attached.

 

8

 

	
  Notice of Grant of Stock Options

  	
   

  	
  QUIDEL CORPORATION

  
	
  and Option Agreement

  	
   

  	
  ID: 94-2573850

  
	
   

  	
   

  	
  10165 McKellar Court

  
	
   

  	
   

  	
  San Diego, CA 92121

  
	
   

  	
   

  	
   

  
	
  Caren Mason

  	
   

  	
  Option Number:  004432

  
	
  2523 Park Ridge Drive

  	
   

  	
  Plan:
                     2001

  
	
  Escondido, CA 92025

  	
   

  	
  ID:

  

 

Effective 8/20/04, you have been granted a(n) Incentive Stock Option to
buy 115,604 shares of QUIDEL CORPORATION (the Company) stock at $3.4600 per
share.

 

The total option price of the shares granted is $399,969.84.

 

Shares in each period will become fully vested on the date shown.

 

	
  Shares

  	
   

  	
  Vest Type

  	
   

  	
  Full Vest

  	
   

  	
  Expiration

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23,121

  	
   

  	
  On Vest Date

  	
   

  	
  8/20/05

  	
   

  	
  8/20/14

  	
   

  
	
  5,780

  	
   

  	
  Quarterly

  	
   

  	
  11/20/05

  	
   

  	
  8/20/14

  	
   

  
	
  28,901

  	
   

  	
  Quarterly

  	
   

  	
  11/20/06

  	
   

  	
  8/20/14

  	
   

  
	
  28,901

  	
   

  	
  Quarterly

  	
   

  	
  11/20/07

  	
   

  	
  8/20/14

  	
   

  
	
  28,901

  	
   

  	
  Quarterly

  	
   

  	
  8/20/08

  	
   

  	
  8/20/14

  	
   

  

 

 

	
  Notice of Grant of Stock Options

  	
   

  	
  QUIDEL CORPORATION

  
	
  and Option Agreement

  	
   

  	
  ID: 94-2573850

  
	
   

  	
   

  	
  10165 McKellar Court

  
	
   

  	
   

  	
  San Diego, CA 92121

  
	
   

  	
   

  	
   

  
	
  Caren Mason

  	
   

  	
  Option Number:  004433 

  
	
  2523 Park Ridge Drive

  	
   

  	
  Plan:
                     2001

  
	
  Escondido, CA 92025

  	
   

  	
  ID:

  

 

Effective 8/20/04, you have been granted a(n) Non-Qualified Stock
Option to buy 334,396 shares of QUIDEL CORPORATION (the Company) stock at
$3.4600 per share.

 

The total option price of the shares granted is $1,157,010.16.

 

Shares in each period will become fully vested on the date shown.

 

	
  Shares

  	
   

  	
  Vest Type

  	
   

  	
  Full Vest

  	
   

  	
  Expiration

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  89,379

  	
   

  	
  On Vest Date

  	
   

  	
  8/20/05

  	
   

  	
  8/20/14

  	
   

  
	
  22,345

  	
   

  	
  Quarterly

  	
   

  	
  11/20/05

  	
   

  	
  8/20/14

  	
   

  
	
  83,599

  	
   

  	
  Quarterly

  	
   

  	
  11/20/06

  	
   

  	
  8/20/14

  	
   

  
	
  83,599

  	
   

  	
  Quarterly

  	
   

  	
  11/20/07

  	
   

  	
  8/20/14

  	
   

  
	
  55,474

  	
   

  	
  Quarterly

  	
   

  	
  8/20/08

  	
   

  	
  8/20/14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}]]