EXHIBIT 10.25
ADAC LABORATORIES
1999 SUPPLEMENTAL INCENTIVE PLAN
1. PURPOSES OF THE PLAN. The purpose of the ADAC Laboratories 1999
Supplemental Incentive Plan is to enable ADAC Laboratories to provide an
incentive to eligible Service Providers whose present and potential
contributions are important to the continued success of the Company, to afford
these individuals the opportunity to acquire a proprietary interest in the
Company, and to enable the Company to enlist and retain in its service the best
available talent for the successful conduct of its business and align the
interests of such persons with the interests of the Company's shareholders. It
is intended that these purposes will be effected through the granting of
Nonstatutory Stock Options and Stock Purchase Rights.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or such of its Committees as
shall be administering the Plan, in accordance with Section 5 of the Plan.
(b) "APPLICABLE LAWS" means the requirements relating to the
administration of the Plan under U. S. state corporate laws, U.S. federal and
state securities laws, the Code, any stock exchange or quotation system on which
the Common Stock is listed or quoted and the applicable laws of any foreign
country or jurisdiction where Options or Stock Purchase Rights are granted under
the Plan.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" means a committee of Directors appointed by the Board
in accordance with Section 5 of the Plan.
(f) "COMMON STOCK" means the Common Stock of the Company.
(g) "COMPANY" means ADAC Laboratories, a California corporation.
(h) "CONSULTANT" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.
(i) "DIRECTOR" means a member of the Board.
(j) "DISABILITY" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "EMPLOYEE" means any person, employed by the Company or any
Parent or Subsidiary of the Company. A Service Provider shall not cease to be
an Employee in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(m) "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "NONSTATUTORY STOCK OPTION" means an Option that is not intended
to qualify as an incentive stock option within the meaning of Section 422 of
the Code and the regulations promulgated thereunder.
(o) "NOTICE OF GRANT" means a written notice evidencing certain terms
and conditions of an individual Option or Stock Purchase Right. The Notice of
Grant is part of the Option Agreement or Stock Purchase Agreement.
(p) "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(q) "OPTION" means a stock option granted pursuant to the Plan.
(r) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option.
The Option Agreement is subject to the terms and conditions of the Plan.
(s) "OPTIONED STOCK" means the Common Stock subject to an Option or
Stock Purchase Right.
(t) "OPTIONEE" means the holder of an outstanding Option or Stock
Purchase Right.
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(u) "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(v) "PLAN" means this 1999 Supplemental Incentive Plan.
(w) "RESTRICTED STOCK" means shares of Common Stock subject to a
Restricted Stock Purchase Agreement acquired pursuant to a Stock Purchase Right
under Section 8 below.
(x) "RESTRICTED STOCK PURCHASE AGREEMENT" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
(y) "RULE 16B-3" means Rule 16b-3 of the Exchange Act, or any
successor rule thereto.
(z) "SERVICE PROVIDER" means an Employee, Director or Consultant.
(aa) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(bb) "STOCK PURCHASE RIGHT" means a right to purchase Common Stock
pursuant to Section 8 of the Plan.
(cc) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. ELIGIBILITY. Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Service Providers. If otherwise eligible, a Service Provider who
has been granted an Option or Stock Purchase Right may be granted additional
Options or Stock Purchase Rights.
4. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 10,
the maximum aggregate number of Shares that may be issued under the Plan is
500,000 Shares. The Shares may be authorized, but unissued, or reacquired
Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated); provided, however, that Shares that have actually been
issued under the Plan, whether upon exercise of an Option or Stock Purchase
Right, shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if Shares of Restricted Stock
are repurchased by the Company at their original purchase price, such Shares
shall become available for future grant under the Plan.
5. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE.
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(i) MULTIPLE ADMINISTRATIVE BODIES. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.
(ii) RULE 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(iii) OTHER ADMINISTRATION. Other than as provided above, the
Plan shall be administered by (A) the Board or (B) a Committee, which
Committee shall be constituted to satisfy Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine Fair Market Value;
(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock to be
covered by each Option or Stock Purchase Right;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of Options and Stock Purchase Rights. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options or Stock Purchase Rights may be exercised (which may be based
on performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Purchase Right or the shares of Common Stock relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall
determine;
(vi) to construe and interpret the terms of the Plan;
(vii) to prescribe, amend and rescind rules and regulations
relating to the Plan;
(viii) to modify or amend each Option or Stock Purchase Right
(subject to Section 13 of the Plan);
(ix) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option or Stock Purchase Right
previously granted by the Administrator;
(x) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option or Stock Purchase Right that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that
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the amount of tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may deem necessary or
advisable;
(xi) to determine the terms and restrictions applicable to
Options and Stock Purchase Rights and any Restricted Stock; and
(xii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
6. DURATION OF THE PLAN. The Plan shall remain in effect until
terminated by the Board under the terms of the Plan.
7. OPTIONS. The Administrator, in its discretion, may grant Options to
eligible participants. Each Option shall be evidenced by a Notice of Grant
which shall be in such form and contain such provisions as the Administrator
shall from time to time deem appropriate, provided that Option Agreements shall
contain the following terms and conditions:
(a) OPTION EXERCISE PRICE. The per Share exercise price for the
Shares to be issued pursuant to the exercise of an Option shall be determined by
the Administrator.
(b) WAITING PERIOD AND EXERCISE DATES. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised, and shall determine any conditions that must be satisfied before the
Option may be exercised.
(c) FORM OF PAYMENT. The consideration to be paid for the Shares to
be issued upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option,
shall be determined at the time of grant) and may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (1) in the case of Shares acquired from
the Company, have been owned by the Optionee for more than six months on the
date of surrender, and (2) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee;
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(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
(d) METHOD OF EXERCISE.
(i) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. An Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator and as shall be permissible under the terms
of the Plan. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Administrator
and permitted by the Option Agreement, consist of any consideration and method
of payment allowable under Section 7(c). Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. No adjustment shall be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter shall be available, both for
purposes of the Plan and for issuance under the Option, by the number of Shares
as to which the Option is exercised.
(ii) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. In the
event that an Optionee ceases to be a Service Provider (other than upon the
Optionee's death or Disability), the Optionee may exercise his or her Option
within such period of time as is determined by the Administrator at the time of
grant, but only to the extent that the Optionee was entitled to exercise the
Option at the date of such termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). In
the absence of a determination by the Administrator, the Option shall remain
exercisable for three (3) months following the Optionee's termination. To the
extent that Optionee was not entitled to exercise an Option at the date of such
termination, and to the extent that the Optionee does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the
Option shall terminate.
(iii) DISABILITY OF OPTIONEE. In the event an Optionee ceases to
be a Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is determined by the
Administrator at the time of grant (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement) as to all of the
Shares subject thereto, including Shares as to which the Option is not otherwise
exercisable at the date of Optionee's termination. In the absence of a
determination by the Administrator, the Option shall remain exercisable for
twelve (12) months following the Optionee's termination. To the extent that the
Optionee does not exercise such Option within the time specified herein, the
Option shall terminate.
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(iv) DEATH OF OPTIONEE. In the event of an Optionee's death, the
Optionee's estate or the person(s) who acquired the right to exercise the
Optionee's Option by bequest or inheritance may exercise the Option within such
period of time as is determined by the Administrator at the time of grant (but
in no event later than the expiration of the term of such Option as set forth in
the Option Agreement) as to all of the Shares subject thereto, including Shares
as to which the Option is not otherwise exercisable at the date of Optionee's
termination. In the absence of a determination by the Administrator, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. To the extent that the Optionee's estate or a person who acquired
the right to exercise such Option does not exercise such Option within the time
specified herein, the Option shall terminate.
8. STOCK PURCHASE RIGHTS.
(a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with Options and/or cash awards made outside
of the Plan. After the Administrator determines that it will offer Stock
Purchase Rights under the Plan, it shall advise the offeree in writing or
electronically, by means of a Notice of Grant, of the terms, conditions and
restrictions related to the offer, including the number of Shares that the
offeree shall be entitled to purchase, the price to be paid, and the time within
which the offeree must accept such offer. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the
Administrator.
(b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.
(c) OTHER PROVISIONS. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
(d) RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 11
of the Plan.
9. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Unless
determined otherwise by the Administrator, Options, Stock Purchase Rights and
Restricted Stock may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by
the Optionee. If the Administrator makes an Option or Stock Purchase Right
transferable, such Option or Stock Purchase Right may contain such additional
terms and conditions as the Administrator deems appropriate.
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10. LIMITATIONS. Neither the Plan nor any Option, Stock Purchase Right or
Restricted Stock shall confer upon an Optionee any right with respect to
continuing the Optionee's relationship as a Service Provider with the Company,
nor shall they interfere in any way with the Optionee's right or the Company's
right to terminate such relationship at any time, with or without cause.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER, ASSET
SALE OR CHANGE OF CONTROL.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; PROVIDED, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option
or Stock Purchase Right.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Stock
Purchase Right has not been previously exercised, it will terminate immediately
prior to the consummation of such proposed action. The Administrator may, in
the exercise of its sole discretion in such instances, declare that any Option
or Stock Purchase Right shall terminate as of a date fixed by the Administrator
and give each Optionee the right to exercise his or her Option or Stock Purchase
Right as to all or any part of the Optioned Stock, including Shares as to which
the Option or Stock Purchase Right would not otherwise be exercisable.
(c) MERGER OR ASSET SALE. Subject to the provisions of paragraph (d)
hereof, in the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the Company, each
outstanding Option and Stock Purchase Right shall be assumed or an equivalent
Option or Stock Purchase Right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation does not agree to assume the Option or Stock Purchase
Right, or to substitute an equivalent option or stock purchase right, the
Optionee shall fully vest in and have the right to exercise the Option or Stock
Purchase Right as to all of the Optioned Stock, including Shares as to which it
would not otherwise be vested or exercisable. If an Option or Stock Purchase
Right becomes fully vested and exercisable in lieu of assumption or substitution
in the event of a merger or sale of assets, the Administrator shall notify the
Optionee that the Option or Stock Purchase Right shall be exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For
the purposes of this paragraph, the Option or Stock Purchase Right
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shall be considered assumed if, immediately following the merger or sale of
assets, the Option or Stock Purchase Right confers the right to purchase, for
each Share of Optioned Stock subject to the Option or Stock Purchase Right
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale
of assets by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); PROVIDED, however, that if such consideration
received in the merger or sale of assets was not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent
of the successor corporation, provide for the consideration to be received
upon the exercise of the Option or Stock Purchase Right, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in Fair Market
Value to the per share consideration received by holders of Common Stock in
the merger or sale of assets.
(d) CHANGE IN CONTROL. In the event of a "Change in Control" of the
Company, as defined in paragraph (e) below, any Options, Stock Purchase Rights
and Restricted Stock outstanding on the date such Change in Control is
determined to have occurred that are not yet fully exercisable and vested on
such date shall become fully exercisable and vested.
(e) DEFINITION OF "CHANGE IN CONTROL". For purposes of this
Section 10, a "Change in Control" means the happening of any of the following:
(i) When any "person," as such term is used in Sections 13(d)
and 14(d) of the Exchange Act (other than the Company, a Subsidiary or a Company
employee benefit plan, including any trustee of such plan acting as trustee) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or
(ii) A merger or consolidation of the Company with any other
corporation, other than 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 the surviving entity) more than fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or the shareholders of the Company approve an agreement for the
sale or disposition by the Company of all or substantially all the Company's
assets; or
(iii) A change in the composition of the Board, as a result of
which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (A) are directors of the
Company as of the date hereof, or (B) are elected, or nominated for election, to
the Board with the affirmative votes of at least a majority of those directors
whose election or nomination was not in connection with any transaction
described in subsections (i) or (ii) or in connection with an actual or
threatened proxy contest relating to the election of directors of the Company.
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12. DATE OF GRANT. The date of grant of an Option or Stock Purchase Right
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Administrator may at any time
amend, alter, suspend or terminate the Plan.
(b) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee
under any previously granted Option or Stock Purchase Right, unless mutually
agreed otherwise between the Optionee and the Administrator, which agreement
must be in writing and signed by the Optionee and the Company. Termination of
the Plan shall not affect the Administrator's ability to exercise the powers
granted to it hereunder with respect to Options or Stock Purchase Rights granted
under the Plan prior to the date of such termination.
14. CONDITIONS UPON ISSUANCE OF SHARES.
(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with all Applicable Laws, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
15. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
16. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
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