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Exhibit 10.24
QUIDEL CORPORATION
1998 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "AGREEMENT") is made effective as
of June 9, 1998 (the "GRANT DATE"), by and between QUIDEL CORPORATION, a
Delaware corporation (the "COMPANY"), and ANDRE de BRUIN ("OPTIONEE"), with
reference to the following facts:
A. The Board of Directors of the Company (the "BOARD") has
established, by written resolutions, subject to stockholder approval at the next
Annual Meeting of Stockholders, the 1998 Stock Incentive Plan (the "PLAN"),
granted authority to the Compensation Committee of the Board (the "COMMITTEE")
to make grants under and to administer the Plan, and directly granted options to
purchase 1,428,420 shares of the Company's common stock (the "COMMON STOCK") to
Optionee in connection with recruiting and employing Optionee as the Company's
President and Chief Executive Officer and aligning Optionee's interests with
those of the stockholders of the Company.
B. By action taken on the Grant Date, the Board granted to Optionee
Incentive Stock Options and Nonqualified Stock Options (the "OPTION") to
purchase shares of 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 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 agree as
follows:
AGREEMENT
1. GRANT OF OPTION. Provided that the stockholders of the Company
approve the Plan at the next Annual Meeting of Stockholders, Optionee may, at
Optionee's election and upon the terms and conditions set forth herein, purchase
all or any part of an aggregate of 1,428,420 shares of Common Stock (the
"OPTIONED SHARES") at the price per share equal to $3.250 (the "OPTION PRICE").
The Option Price equals the closing price of the Common Stock on the Grant Date.
Provided that the stockholders of the Company approve the Plan as provided
hereinabove, all outstanding options granted to de Bruin pursuant to that
certain Stock Option Agreement dated as of June 23, 1997 shall be immediately
terminated and cancelled.
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Exhibit 10.24
2. VESTING SCHEDULE.
(a) Option A. This option is for 952,280 shares of Common
Stock of which 25,000 shares are vested immediately. The remaining 927,280
shares shall vest and become exercisable cumulatively at the rate of 6.25%
(i.e., 57,955 shares) for each full calendar quarter following the Grant Date.
The first such vesting date shall be September 9, 1998.
(1) Incentive Stock Options.
The first 30,769 stock options to vest in any
calendar year, until all Option A options are vested, will be
Incentive Stock Options. The remaining options vesting in a calendar
year will be nonstatutory or Nonqualified Stock Options.
(b) Option B. This option is for 476,140 shares. Unless
accelerated as provided below or in Section 6, the Option shall vest and become
exercisable as to all 476,140 shares upon the fourth anniversary of the Grant
Date or June 9, 2002. Part or all of the Option may vest earlier, upon the
satisfaction of the defined performance goals set forth below. The stated goals
are to be estimated by the Board no later than July 28, 1998 (or as soon as
practicable thereafter). The final performance targets will be attached to this
Agreement as Exhibit A, signed by the parties hereto.
25% - Attainment of the FY'99 Budget for Gross Revenues
25% - Attainment of FY'00 Target EBITDA
25% - Attainment of a market valuation greater than 15
times the FY'00 Target for EPS
25% - Attainment of the FY'01 Strategic Plan Target for
Gross Revenues
(c) Special Provisions Regarding Incentive Stock Options.
(1) Notwithstanding anything in this Section 2 to
the contrary, the exercise price and vesting period of any Stock
Option intended to qualify as an Incentive Stock Option shall comply
with the provisions of Section 422 of the Internal Revenue Code of
1986, as amended ("IRC") and the regulations thereunder. As of the
Grant Date, such provisions require, among other matters, that (A)
the exercise price must not be less than the fair market value as
required by the IRC (the "Fair Market Value") of the underlying stock
as of the date the Incentive Stock Option is granted; and (B) that
the Incentive Stock Option not be exercisable after the expiration of
ten years from the date of grant of such Incentive Stock Option.
(2) The aggregate Fair Market Value (determined
as of the respective date or dates of grant) of the Common Stock for
which one or more Stock Options granted to Optionee under this
Agreement (or any other option plan of the Company or any of its
subsidiaries of affiliates) may for the first time become exercisable
as Incentive
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Exhibit 10.24
Stock Options under the federal tax laws during any one calendar year
shall not exceed $100,000.
(3) Any Options granted as Incentive Stock
Options pursuant to this Agreement that for any reason fail or cease
to qualify as such shall be treated as Nonqualified Stock Options.
(4) Optionee is and will continue to be an
"eligible person" meeting the employment requirements of IRC Section
422.
(5) If Optionee's employment is terminated by the
Company or Optionee resigns his employment, all vested Incentive
Stock Options must be exercised within 90 days of the last day of
employment or revert to Nonqualified Options.
3. EXERCISE OF OPTION.
(a) Extent of Exercise. The Option may be exercised at the
time or after installments vest as specified in Section 2 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; or (ii) check; provided, however, that
the Company will permit 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. Additionally, the Option Price may be paid to the
Company by de Bruin's delivery of Common Stock of the Company owned by de Bruin
(with the certificates duly endorsed or accompanied by stock powers duly
endorsed, with signatures guaranteed in accordance with the Securities Exchange
Act of 1934, as amended (the "Exchange Act") if required by the Company, and
with the Common Stock valued at Fair Market Value) if payment of the Option
Price in this manner does not, in the reasonable judgment of the Company, result
in an accounting expense or charge to earnings.
(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 prior to such issuance.
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Exhibit 10.24
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, subject to Section 2(c)(5) as
to Incentive Stock Options, 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 date, and shall then
expire and terminate. In the event of the death of Optionee while he is an
employee of the Company or within the period after termination of such status
during which he 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 his 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 Committee an appropriate and
proportionate adjustment shall be made in the number or kind of Optioned Shares,
the Option Price, and the Pricing Milestones; provided, however, that no such
adjustment need be made if, upon the advice of counsel, the Board or the
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. 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. For purposes of this
Agreement, a "CHANGE IN CONTROL" means the following and shall be deemed to
occur if any of the following events occurs:
(a) Any person, entity or group, within the meaning of
Section 13(d) or 14(d) of the Exchange Act, but excluding the Company and its
subsidiaries and any employee benefit or stock ownership plan of the Company or
its subsidiaries and also excluding an underwriter or underwriting syndicate
that has acquired the Company's securities solely in connection with a public
offering thereof (such person, entity or group being referred to herein as a
"PERSON"), becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either the then
outstanding shares of Common Stock or the combined voting power of the Company's
then outstanding securities entitled to vote generally in the election of
directors; or
(b) Individuals who, as of the Effective Date, constitute
the Board (the "INCUMBENT BOARD") cease for any reason to constitute at least a
majority of the Board, provided
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Exhibit 10.24
that any individual who becomes a director after the Effective Date whose
election, or nomination for election by the Company's stockholders, is approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered to be a member of the Incumbent Board unless that
individual was nominated or elected by any Person having the power to exercise,
through beneficial ownership, voting agreement and/or proxy, 20% 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, in which case that individual shall not be
considered to be a member of the Incumbent Board unless such individual's
election or nomination for election by the Company's stockholders is approved by
a vote of at least two-thirds of the directors then comprising the Incumbent
Board; or
(c) Consummation by the Company of the sale or other
disposition by the Company of all or substantially all of the Company's assets
or a reorganization or merger or consolidation of the Company with any other
person, entity or corporation, other than
(i) a reorganization or merger or consolidation
that would result in the voting securities of the Company outstanding
immediately prior thereto (or, in the case of a reorganization or
merger or consolidation that is preceded or accomplished by an
acquisition or series of related acquisitions by any Person, by
tender or exchange offer or otherwise, of voting securities
representing 5% or more of the combined voting power of all
securities of the Company, immediately prior to such acquisition or
the first acquisition in such series of acquisitions) continuing to
represent, either by remaining outstanding or by being converted into
voting securities of another entity, more than 50% of the combined
voting power of the voting securities of the Company or such other
entity outstanding immediately after such reorganization or merger or
consolidation (or series of related transactions involving such a
reorganization or merger or consolidation), or
(ii) a reorganization or merger or consolidation
effected to implement a recapitalization or reincorporation of the
Company (or similar transaction) that does not result in a material
change in beneficial ownership of the voting securities of the
Company or its successor; or
(d) Approval by the stockholders of the Company or an
order by a court of competent jurisdiction of a plan of liquidation of the
Company.
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. Each such certificate representing shares acquired upon
exercise of a portion of the Option shall be endorsed with a legend, or
described below, in any unregistered transaction.
8. SECURITIES LAW REQUIREMENTS.
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Exhibit 10.24
(a) Registration on Form S-8. The Company undertakes to
register the Common Stock reserved for issuance under the Plan on Form S-8 as
soon as reasonably practicable following stockholder approval of the Plan at the
1998 Annual Meeting of Stockholders.
(b) Legality of Issuance. No shares shall be issued upon
the exercise of the Option unless and until the Company has determined that:
(i) it and Optionee have taken all actions
required to register the Shares under the Securities Act
of 1933, as amended (the "Act"), or to perfect an
exemption from the registration requirements thereof;
(ii) any applicable listing requirements of any
stock exchange on which the Common Stock is listed have
been satisfied; and
(iii) any other applicable provisions of state
federal law have been satisfied.
(c) Restrictions on Transfer; Representations of Optionee:
Legends. Regardless of whether the offering and sale of Shares under this
Agreement have been registered under the Act or have been registered or
qualified under the securities laws of any state, the Company may impose
restrictions upon the sale, pledge or other transfer of such Shares (including
the placement of appropriate legends on stock certificates) and/or require a
legal opinion from counsel for Optionee if, in the judgment of the Company and
its counsel, such restrictions and/or legal opinion are necessary or desirable
in order to achieve compliance with the provisions of the Act, the securities
laws of any state or any other law. In the event that the Shares issued upon the
exercise of the Option under this Agreement are not registered under the Act but
an exemption is available which requires an investment representation or other
representation, Optionee shall be required to represent that such Shares are
being acquired for investment, and not with a view to the sale or distribution
thereof, and to make such other representations as are deemed necessary or
appropriate by the Company and its counsel. Stock certificates evidencing Shares
acquired under this Agreement pursuant to an unregistered transaction shall bear
the following restrictive legend and such other restrictive legends as are
required or deemed advisable under the provisions of any applicable law:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT")
OR QUALIFIED UNDER THE CALIFORNIA SECURITIES LAW OF 1968, AS AMENDED
(THE "LAW"). IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THESE
SECURITIES, OR ANY INTEREST THEREIN, UNLESS SUCH SECURITIES ARE
EITHER REGISTERED UNDER THE ACT AND QUALIFIED UNDER THE LAW OR EXEMPT
FROM SUCH REGISTRATION AND QUALIFICATION.
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Exhibit 10.24
Any determination by the Company and its counsel in connection with
any of the matters set forth in this Section 8 shall be conclusive and binding
on all persons.
9. NO RIGHTS IN SHARES BEFORE ISSUANCE AND DELIVERY. Neither
Optionee, his estate nor his 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.
10. 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. During the
lifetime of Optionee, the Option shall be exercisable only by Optionee (or
Optionee's permitted transferee) or his guardian or legal representative.
11. CERTAIN REPRESENTATIONS AND WARRANTIES. Optionee expressly
acknowledges, represents and agrees as follows:
(a) Optionee shall accept as binding, conclusive and final
all decisions or interpretations of the Board or the Committee upon any
questions arising under the Plan or this Agreement;
(b) Optionee has been advised to consult with a competent
tax advisor regarding the applicable tax consequences arising from exercise of
the Option; and
(c) If Optionee is (as expected) a person subject to the
provisions of Section 16 of the Securities Exchange Act of 1934, 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 and exercise of the Option.
12. 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 his 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
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Exhibit 10.24
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.
13. 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.
14. AGREEMENT BINDING ON SUCCESSORS. The terms of this Agreement
shall be binding upon the executors, administrators, heirs, successors,
transferees and assigns of Optionee.
15. 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.
IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement effective as of the Grant Date.
QUIDEL CORPORATION, a
Delaware corporation
By: /S/ RICHARD C.E. MORGAN
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Chairman of the Board
/S/ ANDRE de BRUIN
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Andre de Bruin
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