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Exhibit 10.3
IDEXX LABORATORIES, INC.
1991 DIRECTOR OPTION PLAN
(AS OF JULY 21, 1999)
1. PURPOSE
The purpose of this 1991 Director Option Plan (the "Plan") of
IDEXX Laboratories, Inc. (the "Company") is to encourage ownership in the
Company by outside directors of the Company whose continued services are
considered essential to the Company's future progress and to provide them with a
further incentive to remain as directors of the Company.
2. ADMINISTRATION
The Board of Directors shall supervise and administer the Plan.
Grants of stock options under the Plan and the amount and nature of the awards
to be granted shall be automatic in accordance with Section 5. However, all
questions of interpretation of the Plan or of any options issued under it shall
be determined by the Board of Directors and such determination shall be final
and binding upon all persons having an interest in the Plan.
3. PARTICIPATION IN THE PLAN
Directors of the Company who are not employees of the Company or
any subsidiary of the Company shall be eligible to participate in the Plan.
4. STOCK SUBJECT TO THE PLAN
(a) The maximum number of shares which may be issued under the
Plan shall be 500,000 shares of the Company's Common Stock, par value $.10 per
share ("Common Stock"), subject to adjustment as provided in Section 9 of the
Plan.
(b) If any outstanding option under the Plan for any reason
expires or is terminated without having been exercised in full, the shares
allocable to the unexercised portion of such option shall again become available
for grant pursuant to the Plan.
(c) All options granted under the Plan shall be non-statutory
options not entitled to special tax treatment under Section 422 of the Internal
Revenue Code of 1986, as amended to date and as it may be amended from time to
time (the "Code").
5. TERMS, CONDITIONS AND FORM OF OPTIONS
Each option granted under the Plan shall be evidenced by a
written agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:
(a) OPTION GRANT DATES. Options shall be granted (i) to all
eligible directors who are directors as of April 24, 1991 on each date that he
or she is re-elected as a director, and (ii) to all other eligible directors
upon his or her initial election as a director and on each subsequent date that
he or she is re-elected as a director.
(b) SHARES SUBJECT TO OPTION. Except as provided below, each
option granted under the Plan shall be exercisable for 20,000 shares of Common
Stock. Notwithstanding anything to the contrary contained herein, the
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number of shares for which an option is granted under the Plan shall be reduced
below 20,000 shares of Common Stock (and the exercise period adjusted) in the
event of the following:
(1) If, after April 24, 1991, a director is initially
elected other than at an annual meeting of stockholders and such
director is re-elected at the next annual meeting of
stockholders, then:
(i) the option granted to such director under the
Plan in connection with his re-election (the "Second
Option") shall be exercisable for such number of shares as
is determined by multiplying 18.268493 (which is 6,668
divided by 365) by the number of days between (a) the date
which is the third anniversary of the date of grant of the
option received by such director under the Plan on the
date of his initial election as a director and (b) the
date which is the third anniversary of the date of grant
of the Second Option; and
(ii) all of such shares shall become exercisable
on the third anniversary of the date of grant of the
Second Option.
(2) If a director elected at an annual meeting of
stockholders is re-elected at a subsequent annual meeting of
stockholders which is earlier than the third annual meeting of
stockholders following his prior election, then:
(i) the option granted to such director under the
Plan in connection with his re-election (the "Subsequent
Option") shall be exercisable for either (a) 6,668 shares,
if the annual meeting at which such director is re-elected
is the first annual meeting following his prior election
or (b) 13,334 shares, if the annual meeting at which such
director is re-elected is the second annual meeting
following his prior election;
(ii) if the number of shares under the Subsequent
Option is 13,334, then 6,666 shares shall become
exercisable on the second anniversary of the date of grant
of the Subsequent Option and 6,668 shares shall become
exercisable on the third anniversary of the date of grant
of the Subsequent Option; and
(iii) if the number of shares under the Subsequent
Option is 6,668, then all of such shares shall become
exercisable on the third anniversary of the date of grant
of the Subsequent Option.
(c) OPTION EXERCISE PRICE. The option exercise price per share
for each option granted under the Plan shall equal (i) the last reported sales
price per share of the Company's Common Stock on the NASDAQ National Market
System (or, if the Company is traded on a nationally recognized securities
exchange on the date of grant, the reported closing sales price per share of the
Company's Common Stock by such exchange) on the date of grant (or if no such
price is reported on such date such price as reported on the nearest preceding
day) or (ii) if the Common Stock is not traded on NASDAQ or any exchange, the
fair market value per share on the date of grant as determined by the Board of
Directors.
(d) LIMITED TRANSFERABILITY. Each option granted under the Plan
shall not be transferable by the optionee otherwise than (i) by will, or by the
laws of descent and distribution, or (ii) with the approval of the Board of
Directors, by gift to (A) one or more members of the optionee's family or
entities controlled by, or for the benefit of the optionee or such family
members, or (B) to one or more charitable organizations (including charitable
trusts). Except as the Board of Directors may otherwise determine, no option or
interest therein may be transferred, assigned, pledged or hypothecated by the
optionee during his lifetime, whether by operation of the law or otherwise, or
be made subject to execution, attachment or similar process.
(e) EXERCISE PERIOD. Each option may be exercised on a cumulative
basis as to one-third of the shares subject to the option on each of the first,
second and third anniversaries of the date of grant of such option, provided
that, subject to the provisions of Section 5(f), no option may be exercised more
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than 90 days after the optionee ceases to serve as a director of the Company. No
option shall be exercisable after the expiration of ten years from the date of
grant.
(f) EXERCISE PERIOD UPON DISABILITY OR DEATH. Notwithstanding the
provisions of Section 5(e), any option granted under the Plan may be exercised,
to the extent then exercisable, by an optionee who becomes disabled (within the
meaning of Section 22(e)(3) of the Code or any successor provision thereto)
while acting as a director of the Company, or may be exercised, to the extent
then exercisable, upon the death of such optionee while a director of the
Company by the person to whom it is transferred by will, by the laws of descent
and distribution, or by written notice filed pursuant to Section 5(h), in each
case within the period of one year after the date the optionee ceases to be such
a director by reason of such disability or death; provided that, no option shall
be exercisable after the expiration of ten years from the date of grant.
(g) EXERCISE PROCEDURE. Options may be exercised only by written
notice to the Company at its principal office accompanied by payment in cash of
the full consideration for the shares as to which they are exercised.
(h) EXERCISE BY REPRESENTATIVE FOLLOWING DEATH OF DIRECTOR. A
director, by written notice to the Company, may designate one or more persons
(and from time to time change such designation) including his legal
representative, who, by reason of the director's death, shall acquire the right
to exercise all or a portion of the option. If the person or persons so
designated wish to exercise any portion of the option, they must do so within
the term of the option as provided herein. Any exercise by a representative
shall be subject to the provisions of the Plan.
6. ASSIGNMENTS
The rights and benefits under the Plan may not be assigned except
for the designation of a beneficiary as provided in Section 5.
7. TIME FOR GRANTING OPTIONS
All options for shares subject to the Plan shall be granted, if
at all, not later than five years after the approval of the Plan by the
Company's stockholders.
8. LIMITATION OF RIGHTS
(a) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan, nor the
granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a director for any period of time.
(b) NO STOCKHOLDERS' RIGHTS FOR OPTIONS. An optionee shall have
no rights as a stockholder with respect to the shares covered by his options
until the date of the issuance to him of a stock certificate therefor, and no
adjustment will be made for dividends or other rights (except as provided in
Section 9) for which the record date is prior to the date such certificate is
issued.
9. CHANGES IN COMMON STOCK
(a) If the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all of
the assets of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Common Stock, or other securities, an appropriate and
proportionate adjustment will be made in (i) the maximum number and kind of
shares reserved for issuance under the Plan, (ii) the number and kind of shares
or other securities subject to then outstanding options under the Plan and (iii)
the price for each share subject to any then outstanding options under the Plan,
without changing the aggregate purchase price as to which such options remain
exercisable. No fractional shares will be issued under the Plan on account of
any such adjustments.
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(b) In the event that the Company is merged or consolidated into
or with another corporation (in which consolidation or merger the stockholders
of the Company receive distribution of cash or securities of another issuer as a
result thereof), or in the event that all or substantially all of the assets of
the Company are acquired by any other person or entity, or in the event of a
reorganization or liquidation of the Company, the Board of Directors of the
Company or the board of directors of any corporation assuming the obligations of
the Company, shall, as to outstanding options, either (i) provide that such
options shall be assumed, or equivalent options shall be substituted, by the
acquiring or successor corporation (or an affiliate thereof), or (ii) upon
written notice to the optionees, provide that all unexercised options will
terminate immediately prior to the consummation of such merger, consolidation,
acquisition, reorganization or liquidations unless exercised by the optionee
within a specified number of days following the date of such notice.
10. AMENDMENT OF THE PLAN
The Board of Directors may suspend or discontinue the Plan or
review or amend it in any respect whatsoever; provided, however, that without
approval of the stockholders of the Company no revision or amendment shall
change the number of shares subject to the Plan (except as provided in Section
9), change the designation of the class of directors eligible to receive
options, or materially increase the benefits accruing to participants under the
Plan. The Plan may not be amended more than once in any six-month period.
11. NOTICE
Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the Treasurer of the Company and
shall become effective when it is received.
12. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Delaware.
Approved by the Board of Directors on April 24, 1991
Approved by the Stockholders on June 10, 1991
Amended by the Board of Directors on December 15, 1992
Amended by the Board of Directors on February 26, 1993, with amendment
to become effective on June 16, 1993 after approval by Stockholders
Amendment approved by Stockholders on May 18, 1993, with amendment
effective on June 16, 1993
Number of shares covered by the Plan reflects 2 for 1 stock split in
the form of a stock dividend paid on October 1, 1993
Amended by the Board of Directors on February 9, 1995
Amendment approved by Stockholders on May 26, 1995
Number of shares covered by the Plan reflects 2 for 1 stock split in
the form of a stock dividend paid on June 5, 1995
Amended by the Board of Directors on March 5, 1996; amendment approved
by the Stockholders on May 24, 1996.
Amended by the Board of Directors on July 21, 1999.
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