Exhibit 10.6
IDEXX LABORATORIES,
INC.
1998 STOCK INCENTIVE
PLAN
(as of February 14,
2007)
1. Purpose
The purpose of this 1998 Stock
Incentive Plan (the “Plan”) of IDEXX Laboratories, Inc., a Delaware
corporation (the “Company”), is to advance the interests of the
Company’s stockholders by enhancing the Company’s ability to attract, retain and
motivate persons who make (or are expected to make) important contributions to the Company
by providing such persons with equity ownership opportunities and performance-based
incentives and thereby better aligning the interests of such persons with those of the
Company’s stockholders. Except where the context otherwise requires, the term
“Company” shall include any present or future subsidiary corporations of IDEXX
Laboratories, Inc. as defined in Section 424(f) of the Internal Revenue Code of
1986, as amended, and any regulations promulgated thereunder (the “Code”).
2. Eligibility
All of the Company’s employees,
officers and directors (and any individuals who have accepted an offer for employment) are
eligible to be granted options (“Options”) to purchase shares of the
Company’s common stock, $.10 par value per share (“Common Stock”), under
the Plan. Each person who has been granted an Option under the Plan shall be deemed a
“Participant”.
3. Administration,
Delegation
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(a) |
Administration
by Board of Directors. The Plan will be administered by the Board of
Directors of the Company (the “Board”). The Board shall have
authority to grant Options and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem
advisable. The Board may correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Option in the manner and to the extent it
shall deem expedient to carry the Plan into effect and it shall be the sole and
final judge of such expediency. All decisions by the Board shall be made in the
Board’s sole discretion and shall be final and binding on all persons
having or claiming any interest in the Plan or in any Option. No director or
person acting pursuant to the authority delegated by the Board shall be liable
for any action or determination relating to or under the Plan made in good
faith. |
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(b) |
Appointment
of Committees. To the extent permitted by applicable law, the Board may
delegate any or all of its powers under the Plan to one or more committees or
subcommittees of the Board (a “Committee”). All references in the
Plan to the “Board” shall mean the Board or a Committee of the Board
or the executive officers referred to in Section 3(c) to the extent that the
Board’s powers or authority under the Plan have been delegated to such
Committee or executive officers. |
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(c) |
Delegation
to Executive Officers. To the extent permitted by applicable law, the Board
may delegate to one or more executive officers of the Company the power to
grant Options to employees or officers of the Company or any of its present or
future subsidiary corporations and to exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the terms of the
Options to be granted by such executive officers (including the exercise price
of such Options, which may include a formula by which the exercise price will
be determined) and the maximum number of shares subject to Options that the
executive officers may grant; provided further, however, that no executive
officer shall be authorized to grant Options to any “executive officer” of
the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) or to any “officer” of the
Company (as defined by Rule 16a-1 under the Exchange Act). |
4. Stock Available under
the Plan
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(a) |
Number
of Shares. Subject to adjustment under Section 6, Options may be granted
under the Plan for up to 4,100,000 shares of Common Stock. If any Option
expires or is terminated, surrendered or canceled without having been fully
exercised, the unused Common Stock covered by such Option shall again be
available for the grant of Options under the Plan, subject, however, in the
case of Incentive Stock Options (as hereinafter defined), to any limitation
required under the Code. Shares issued under the Plan may consist in whole or
in part of authorized but unissued shares or treasury shares. |
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(b) |
Per-Participant
Limit. Subject to adjustment under Section 7, the maximum number of shares
of Common Stock with respect to which an Option may be granted to any
Participant under the Plan shall be 500,000per calendar year. The
per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code. |
5. Terms of Stock Options
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(a) |
General.
The Board may grant Options and determine the number of shares of Common Stock
to be covered by each Option, the exercise price of each Option and the
conditions and limitations applicable to the exercise of each Option, including
conditions relating to applicable federal or state securities laws, as it
considers necessary or advisable. An Option which is not intended to be an
Incentive Stock Option (as hereinafter defined) shall be designated a
“Nonstatutory Stock Option”. |
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(b) |
Incentive
Stock Options. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive
Stock Option”) shall only be granted to employees of the Company and shall
be subject to and shall be construed consistently with the requirements of
Section 422 of the Code. The Company shall have no liability to a Participant,
or any other party, if an Option (or any part thereof) which is intended to be
an Incentive Stock Option is not an Incentive Stock Option. |
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(c) |
Exercise
Price. The Board shall establish the exercise price, which shall in no
event be less than 100% of the fair market value of the Common Stock as
determined (or in a manner approved) by the Board in good faith (“Fair
Market Value”) at the time of grant, at the time each Option is granted
and specify it in the applicable option agreement. |
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(d) |
Duration
of Options. Each Option shall be exercisable at such times and subject to
such terms and conditions as the Board may specify in the applicable option
agreement. No option will be granted for a term in excess of 10 years. |
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(e) |
Exercise
of Option. Options may be exercised by delivery to the Company of a written
notice of exercise signed by the proper person or by any other form of notice
(including electronic notice) approved by the Board, together with payment in
full as specified in Section 5(f) for the number of shares for which the Option
is exercised. |
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(f) |
Payment
Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows: |
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(1) |
in
cash or by check, payable to the order of the Company; |
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(2) |
except
as the Board may, in its sole discretion, otherwise provide in an option
agreement, (i) delivery of an irrevocable and unconditional undertaking by
a creditworthy broker to deliver promptly to the Company sufficient funds
to pay the exercise price, (ii) delivery by the Participant to the Company
of a copy of irrevocable and unconditional instructions to a creditworthy
broker to deliver promptly to the Company cash or a check sufficient to
pay the exercise price or (iii) delivery of shares of Common Stock owned
by the Participant valued at their Fair Market Value, which Common Stock
was owned by the Participant at least six months prior to such delivery; |
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(3) |
to
the extent permitted by the Board, in its sole discretion (i) by delivery of
a promissory note of the Participant to the Company on terms determined by
the Board, or (ii) by payment of such other lawful consideration as the
Board may determine; or |
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(4) |
any
combination of the above permitted forms of payment. |
6. Adjustments for
Changes in Common Stock and Certain Other Events
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(a) |
Changes
in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of
shares, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than a normal cash dividend, (i)
the number and class of securities available under this Plan, (ii) the
per-Participant limits set forth in Section 4(b), and (iii) the number and
class of securities and exercise price per share subject to each outstanding
Option shall be appropriately and equitably adjusted by the Company (or
substituted Options may be granted, if applicable) in the manner that the Board
shall determine. If this Section 6(a) applies and Section 6(c) also applies to
any event, Section 6(c) shall be applicable to such event, and this Section
6(a) shall not be applicable. |
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(b) |
Liquidation
or Dissolution. In the event of a proposed liquidation or dissolution of
the Company, the Board shall upon written notice to the Participants provide
that all then unexercised Options will (i) become exercisable in full as of a
specified time at least 10 business days prior to the effective date of such
liquidation or dissolution and (ii) terminate effective upon such liquidation
or dissolution, except to the extent exercised before such effective date. |
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(1) |
Definition.
An “Acquisition Event” shall mean: (a) any merger or
consolidation of the Company with or into another entity as a result of which
the Common Stock is converted into or exchanged for the right to receive
cash, securities or other property or (b) any exchange of shares of the
Company for cash, securities or other property pursuant to a statutory
share exchange transaction. |
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(2) |
Consequences
of an Acquisition Event on Options. Upon the occurrence of an
Acquisition Event, or the execution by the Company of any agreement with
respect to an Acquisition Event, the Board shall provide that all
outstanding Options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any options substituted for Incentive Stock
Options shall satisfy, in the determination of the Board, the requirements
of Section 424(a) of the Code. Notwithstanding the foregoing, if the
acquiring or succeeding corporation (or an affiliate thereof) does not
agree to assume, or substitute for, such Options, then the Board shall
upon written notice to the Participants, provide that all then unexercised
Options will become exercisable in full as of a specified time (the “Acceleration
Time”) prior to the Acquisition Event and will terminate immediately
prior to the consummation of such Acquisition Event, except to the extent
exercised by the Participants before the consummation of such Acquisition
Event; provided, however, that, in the event of an Acquisition Event under
the terms of which holders of Common Stock will receive upon consummation
thereof a cash payment for each share of Common Stock surrendered pursuant
to such Acquisition Event (the “Acquisition Price”), then the
Board may instead provide that all outstanding Options shall terminate
upon consummation of such Acquisition Event and that each Participant
shall receive, in exchange therefor, a cash payment equal to the amount
(if any) by which (A) the Acquisition Price multiplied by the number of
shares of Common Stock subject to such outstanding Options (whether or not
then exercisable), exceeds (B) the aggregate exercise price of such
Options. |
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(d) |
Acceleration
of Options. Immediately prior to the consummation of a Change of Control,
each then outstanding Option under the Plan shall become immediately
exercisable as to twenty-five percent (25%) of the number of shares as to which
such Option would otherwise not then be exercisable (rounded down to the
nearest whole share), and the number of shares as to which each such Option
shall become exercisable on each vesting date set forth in the applicable
option agreement shall be reduced by 25%. In addition, all Options held by a
Participant that are not terminated pursuant to Section 6(c) above shall
immediately become exercisable in full if and when, within 24 months after a
Change of Control, such Participant’s employment with the Company (or the
acquiring or succeeding entity) is involuntarily terminated by the Company (or
such acquiring or succeeding entity) other than for Cause (as defined below). |
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(1) |
Definition
of Change of Control. “Change of Control” shall mean: |
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(A) The
acquisition by an individual, 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”)) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either (A) the then-outstanding shares of common stock of the Company
(the “Outstanding Company Common Stock”) or (B) the combined voting
power of the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection
(d)(1), the following acquisitions shall not constitute a Change of Control:
(1) any acquisition directly from the Company, (2) any acquisition by the
Company, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (4) any acquisition by any corporation pursuant to a transaction
which satisfies the criteria set forth in clauses (A), (B) and (C) of
subsection (d)(1)(C) of this Section 6; or
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(B) Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequently to the date
hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or
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(C) Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a “Business
Combination”), in each case, unless, immediately following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60%
of, respectively, the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, of the corporation resulting from such
Business Combination (which as used in this Section 6(d)(1)(C) shall include,
without limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation and (C) at least half of
the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or
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(D) Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.
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(2) |
Definition
of Cause. “Cause” shall mean: |
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(A) the
failure of the Participant to perform substantially the Participant’s
duties with the Company (other than any such failure resulting from incapacity
due to physical or mental illness), which failure is not cured within 30 days
after a written demand for substantial performance is delivered to the
Participant by the Participant’s manager or the Board which specifically
identifies the manner in which such manager or the Board, as applicable,
believes that the Participant has not substantially performed the
Participant’s duties, or
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(B) the
engaging by the Participant in illegal conduct or gross misconduct which is
injurious to the Company.”
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7. General Provisions
Applicable to Options
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(a) |
Transferability
of Options. Except as the Board may otherwise determine or provide in
an Option, Options shall not be sold, assigned, transferred, pledged or
otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent
and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the
extent relevant in the context, shall include references to authorized
transferees. |
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(b) |
Documentation.
Each Option shall be evidenced by a written instrument in such form as the
Board shall determine. Each Option may contain terms and conditions in
addition to those set forth in the Plan. |
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(c) |
Board
Discretion. Except as otherwise provided by the Plan, each Option may
be made alone or in addition or in relation to any other Option. The terms
of each Option need not be identical, and the Board need not treat
Participants uniformly. |
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(d) |
Termination
of Status. The Board shall determine the effect on an Option of the
disability, death, retirement, authorized leave of absence or other change
in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant’s
legal representative, conservator, guardian or Designated Beneficiary may
exercise rights under the Option. |
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(e) |
Withholding.
Each Participant shall pay to the Company, or make provision satisfactory
to the Board for payment of, any taxes required by law to be withheld in
connection with Options to such Participant no later than the date of the
event creating the tax liability. Except as the Board may otherwise
provide in an Option, Participants may satisfy such tax obligations in
whole or in part by delivery of shares of Common Stock, including shares
retained from the Option creating the tax obligation, valued at their Fair
Market Value. The Company may, to the extent permitted by law, deduct any
such tax obligations from any payment of any kind otherwise due to a
Participant. |
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(f) |
Amendment
of Option. The Board may amend, modify or terminate any outstanding
Option, including but not limited to, substituting therefor another Option
of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory
Stock Option, provided that the Participant’s consent to such action
shall be required unless the Board determines that the action, taking into
account any related action, would not materially and adversely affect the
Participant. In addition, neither the Board nor the Company may amend the
terms of any issued and outstanding Options to reduce the exercise price,
other than pursuant to Section 6 of the Plan, without the prior approval
of the Company’s stockholders. |
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(g) |
Conditions
on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock upon exercise of any Option until (i) all
conditions of the Option have been met or removed to the satisfaction of
the Company, (ii) in the opinion of the Company’s counsel, all other
legal matters in connection with the issuance and delivery of such shares
have been satisfied, including any applicable securities laws and any
applicable stock exchange or stock market rules and regulations, and (iii)
the Participant has executed and delivered to the Company such
representations or agreements as the Company may consider appropriate to
satisfy the requirements of any applicable laws, rules or regulations. |
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(h) |
Acceleration.
The Board may at any time provide that any Options shall become
immediately exercisable in full or in part. |
8. Miscellaneous
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(a) |
No
Right To Employment or Other Status. No person shall have any claim or
right to be granted an Option, and the grant of an Option shall not be
construed as giving a Participant the right to continued employment or any
other relationship with the Company. The Company expressly reserves the
right at any time to dismiss or otherwise terminate its relationship with
a Participant free from any liability or claim under the Plan, except as
expressly provided in the applicable Option. |
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(b) |
No
Rights As Stockholder. Subject to the provisions of the applicable
Option, no Participant or Designated Beneficiary shall have any rights as
a stockholder with respect to any shares of Common Stock to be issued upon
exercise of an Option until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of
the Common Stock by means of a stock dividend and the exercise price of
and the number of shares subject to such Option are adjusted as of the
date of the distribution of the dividend (rather than as of the record
date for such dividend), then an optionee who exercises an Option between
the record date for such stock dividend and the distribution date for such
stock dividend shall be entitled to receive, on the distribution date, the
stock dividend with respect to the shares of Common Stock acquired upon
such Option exercise, notwithstanding the fact that such shares were not
outstanding as of the close of business on the record date for such stock
dividend. |
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(c) |
Effective
Date and Term of Plan. The Plan shall become effective on the date on
which it is approved by the Company’s stockholders. No Options
shall be granted under the Plan after the completion of ten years from the
date the Plan was approved by the Board, but Options previously granted may
extend beyond that date. |
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(d) |
Amendment
of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time, provided that, to the extent required by
Section 162(m), no Option granted to a Participant designated as subject
to Section 162(m) by the Board after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such Option (to
the extent that such amendment to the Plan was required to grant such
Option to a particular Participant), unless and until such amendment shall
have been approved by the Company’s stockholders as required by
Section 162(m) (including the vote required under Seciton 162(m)). In
addition, the second sentence of Section 7(f) of the Plan may not be
amended by the Board without the prior approval of the Company’s
stockholders. |
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(e) |
Governing
Law. The provisions of the Plan and all Options made hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware, without regard to any applicable conflicts of law. |
Approved by the Board of Directors
February 12, 1998.
Adopted by stockholders
on May 15, 1998.
Amended by the Board of Directors on
February 16, 1999.
Amendment approved by stockholders on
May 19, 1999.
Amended by the Board of Directors on
February 16, 2000.
Amendment approved by stockholders on
May 17, 2000.
Amendment approved by the Board of
Directors on May 23, 2001.
Amendment approved by the Board of Directors
on February 13, 2002.
Amendment approved by stockholders on
May 15, 2002.
Amendment approved by the Board of
Directors on February 14, 2007