EXHIBIT 10.7
PRIVATE & CONFIDENTIAL
THE TRANSGENOMIC INC. 1997
STOCK OPTION PLAN
(AS AMENDED AND RESTATED)
UK APPROVED STOCK OPTION SUB PLAN 1999
APPROVED BY THE INLAND REVENUE UNDER REF: X19932
DELOITTE & TOUCHE
HILL HOUSE
1, LITTLE NEW STREET
LONDON
EC4A 3TR
Ref:- SVW/NN
THE TRANSGENOMIC INC.
1997 STOCK OPTION PLAN
UK APPROVED STOCK OPTION SUB PLAN 1999
1. INTRODUCTION
1.1 For the purpose of granting options under a scheme approved by the United
Kingdom's Inland Revenue under Schedule 9 to the United Kingdom's Income
and Corporation Taxes Act 1988 ("Schedule 9"), the terms of the
Transgenomic Inc. Amended and Restated 1997 Stock Option Plan, as amended
and restated as of 14 October 1997 (hereafter called the "1997 Plan") are
amended by the creation of the UK Share Option Sub-Plan 1999 ("the
Sub-Plan") which shall be applicable to the employees of Transgenomic Inc.
and its subsidiaries and affiliates who are resident in the United Kingdom.
1.2 The terms of the Sub Plan shall be the terms of the 1997 Plan, amended as
set out below.
2. NATURE OF OPTIONS
2.1 No options or rights may be granted under the Sub Plan other than Approved
Stock Options.
2.2 The Company Stock over which Approved Stock Options are granted under the
Sub Plan must satisfy paragraphs 10-14 of Schedule 9.
3. ELIGIBILITY AND GRANT OF OPTIONS
3.1 No Approved Stock Options may be granted under the Sub Plan to a person who
is not an employee or a full-time director of the Company or such companies
under the control of the Company as may be nominated from time to time
within the meaning of paragraph 27 of Schedule 9.
3.2 For the purposes of Rule 3.1 of this Sub Plan above, a person shall be
treated as a full-time director of a Company if he is obliged to devote to
the performance of the duties of his office of employment with the Company,
or with the Company and any other participating Company, not less than 25
hours a week (excluding meal-breaks).
3.3 No Approved Stock Options may be granted under the Sub Plan to, or
exercised by, a person who is not eligible to participate by virtue of
paragraph 8 of Schedule 9.
3.4. No person shall be granted an option under the Sub Plan for which the
exercise price, when added to the exercise price of all Approved Stock
Options for such individual subsisting under the Sub Plan, or any other
option granted under a discretionary share option scheme approved by the
United Kingdom Inland Revenue and established by the Company or any
associated company (as defined in section 187(2) of the Income and
Corporation Taxes Act 1988), would exceed L30,000 (or such limit as may
from time to time be provided for by paragraph 28 of Schedule 9).
3.5 No option shall be granted under this Sub Plan at any price which is less
than its Fair Market Value, or in the case of an option to subscribe for
shares, the nominal value of the Company Stock, if higher.
3.6 If and so long as the Company Stock is listed on the London Stock Exchange
or the New York Stock Exchange, "Fair Market Value" shall mean its middle
market quotation (as derived from the Daily Official List). If and so long
as the Company Stock is not so listed, "Fair Market Value" shall mean the
fair market value of the relevant stock on the relevant date, as determined
in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992
and agreed in advance of each grant with the Shares Valuation Division of
the UK Inland Revenue.
3.7 The Committee may grant an Approved Stock Option subject to such objective
conditions as it may determine and specify at the date of grant, provided
that such conditions have been approved by the UK Inland Revenue.
3.8 Section 6.3 of the 1997 Plan shall not apply.
3.9 Section 7.2 of the 1997 Plan shall read as if it contained only the words:
"Payment in full for the number of shares purchased under any Approved
Stock Option shall be made to the Company in cash at the time of such
exercise".
3.10 The Committee shall procure the issue or transfer of shares pursuant to the
exercise of an Approved Stock Option within 28 days following the effective
date of exercise of the Option. Shares to be issued pursuant to the Sub
Plan shall rank pari passu in all respects with the Company Stock of the
same class for the time being in issue same as regards any rights attaching
to a record date prior to the date of issue and in the case of a transfer
of shares, the transferee shall not acquire any rights attaching to such
shares by reference to a record date prior to the date of transfer.
4. ADJUSTMENTS
4.1 Article VIII of the 1997 Plan shall read as if it contained only the words:
"The number of shares of Company Stock over which an Approved Stock Option
is granted and the exercise price shall be adjusted in such manner as the
Committee shall determine following any capitalisation issue, rights issue,
subdivision, consolidation or reduction of share capital of the Company or
any other variation of share capital to the intent that (as nearly as may
be without involving fractions of a share or an exercise price calculated
to more than two places of decimals) the exercise price payable in respect
of an Approved Stock Option shall remain unchanged provided that:-
(a) the aggregate amount payable on the exercise of the Approved Stock
Option in full is not increased;
(b) the exercise price for shares of Company Stock is not reduced below its
nominal value; and
(c) no such adjustment is made without the prior approval of the UK Inland
Revenue.
5. EFFECT OF CORPORATE CHANGES
5.1 If any person obtains Control (as defined in Rule 5.6 below) of the Company
as a result of making:
(a) a general offer to acquire the whole of the issued stock of the Company
(where such an offer is made upon a condition such that if it is
satisfied the person making the offer will have control of the
Company; or
(b) a general offer to acquire all the shares in the Company which are of
the same class as the Company Stock subject to Approved Stock Options;
any existing Approved Stock Option may be exercised within 6 months of the
time when the person making such an offer obtains Control of the Company.
5.2 If, as a result of the events specified in 5.1 another Company has obtained
Control of the Company, a holder of an Approved Stock Option may, by
agreement with that other Company (the "Acquiring Company"), within 6
months release such existing options held over the Company Stock (the "Old
Option") for an option fulfilling the requirements of Rule 5.3 (a "New
Option").
5.3 An Approved Stock Option shall only be New Option if it:
(a) is held over stock in the Acquiring Company or some other Company
falling within Schedule 9 paragraph 10(b) or (c);
(b) is a right to acquire such an amount of stock as would have on
acquisition of the New Option an aggregate market value equal to the
aggregate market value of the stock which was subject to the Old
Option upon its release;
(c) has a subscription price such that the aggregate price payable upon the
complete exercise equals the aggregate price which would have been
payable on completion of the Old Option; and
(d) is otherwise identical to the Old Option.
5.4 The New Option shall, for all other purposes of this Sub Plan, be treated
as having been acquired at the same time as Old Option.
5.5 Where New Options are granted under this Rule, all references to
Transgenomic Inc in the 1997 Plan, or this Sub Plan, shall be construed as
references to the Acquiring Company, or as the case may be, to any other
company to which the Stock or stock subject to New Options relates.
5.6 For the purposes of this Rule, a person shall be deemed to have Control of
the Company, if he and others acting in concert with him have obtained
control of it, within the meaning of section 840 of the UK Income and
Corporation Taxes Act 1988
6. TERMINATION OF OPTIONS
6.1 For the purposes of this Sub Plan, Section 10 of the 1997 Plan shall be
read as if it contained only the words:
"An Approved Stock Option may be exercised by the personal representative
of a deceased Optionee within one year following the date of his death and
by the Optionee within one year following the date upon which such Optionee
ceases to hold office or employment with the Company, if such cessation is
as a result of:
(a) permanent or total disability (provided the Optionee has been
continuously employed by the Company for at least three years or such
shorter period as the Committee may determine upon the grant of any
Approved Stock Option);
(b) pregnancy;
(c) redundancy within the meaning of the UK Employment Rights Act 1996;
(d) retirement at the normal age provided that the option has been held
for at least 2 years at the date of such retirement (or such longer
period as the Committee may determine upon the grant of any Approved
Stock Option); or
(e) any other reason at the discretion of the Committee.
6.2 Where an Optionee ceases to hold office or employment with the Company for
any reason other than those set out in Rule 6.1, the Approved Stock Option
shall lapse, whether or not vested.
7. MISCELLANEOUS
7.1 Section 11.2 shall not apply to the Sub Plan.
7.2 In the event of any conflict between the terms of the 1997 Plan and this
Sub Plan, the Sub Plan shall prevail.
7.3 No amendment made to:
(a) any Approved Stock Option granted under this Sub Plan;
(b) any part of this Sub Plan;
(c) any part of the 1997 Plan insofar as those amendments affect this Sub
Plan,
shall have any effect until it has been approved by the Board of the UK
Inland Revenue.