2003 STOCK OPTION PLAN

Exhibit 10.29

 

 

 

 

 

 

AMERICAN MEDICAL INSTRUMENTS HOLDINGS, INC.

 

2003 STOCK OPTION PLAN

 

 

 

 

 

TABLE OF CONTENTS

ARTICLE I		ESTABLISHMENT AND PURPOSE
1.1	Establishment		1
1.2	Purpose		1
1.3	Type of Plan		1
1.4	Term of Plan		1
ARTICLE II		DEFINITIONS
2.1	"Affiliate"		2
2.2	"Agreement"		2
2.3	"Beneficiary"		2
2.4	"Board"		2
2.5	"Cause"		2
2.6	"Change in Control"		2
2.7	"Code"		2
2.8	"Commission"		2
2.9	"Committee"		2
2.10	"Common Stock"		3
2.11	"Company"		3
2.12	"Disability"		3
2.13	"Exchange Act"		3
2.14	"Fair Market Value"		3
2.15	"Grant Date"		4
2.16	"Option"		4
2.17	"Option Period"		4
2.18	"Option Price"		4
2.19	"Participant"		4
2.20	"Plan"		4
2.21	"Representative"		4
2.22	"Retirement"		4
2.23	"Rule 16b-3"		5
2.24	"Securities Act"		5
2.25	"Termination of Employment"		5
2.26	"Transfer"		5
ARTICLE III		ADMINISTRATION
3.1	Structure		5
3.2	Authority		6
3.3	Liability and Indemnification		8

 

 

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ARTICLE IV		STOCK SUBJECT TO PLAN
4.1	Number of Shares Available		9
4.2	Release of Shares		9
4.3	Conditions on Issuance of Shares		9
4.4	Shareholder Rights		10
4.5	Adjustment for Corporate Changes		10
ARTICLE V		ELIGIBILITY AND SELECTION
5.1	Eligibility.		11
5.2	Selection of Participants		11
5.3	Options in Substitution		11
ARTICLE VI		STOCK OPTIONS
6.1	General		12
6.2	Grant of Options		12
6.3	Terms and Conditions		12
6.4	Effect of Termination of Employment		14
6.5	Information Available to Participants		15
6.6	Exercise of Options		15
6.7	Withholding on Exercise		15
6.8	Cash-Out of Option		16
ARTICLE VII		PROVISIONS APPLICABLE TO ACQUIRED STOCK
7.1	General Restriction on Transfer		16
7.2	Transfer On Change in Control		16
7.3	Estate Planning Transfers		16
7.4	Binding Effect of Plan		16
7.5	Limited Transfer Dining Offering		17
ARTICLE VIII		CHANGE IN CONTROL PROVISIONS
8.1	Consent to Board Action		17
8.2	Transfer of Shares		17
8.3	Accelerated Vesting		17
8.4	Definition of Change in Control		17
ARTICLE IX		MISCELLANEOUS
9.1	Amendment and Termination		18
9.2	Fail-Safe for Rule. 16b-3		18
9.3	Fail-Safe for Mitigation of Excise Tax		18
9.4	No Creditor Rights		19
9.5	No Rights with Respect to Employment		19
9.6	Relationship to Other Benefits		19
9.7	Controlling Law		19

 

 

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9.8	Waiver, Cumulative Rights			20
9.9	Notices			20
9.10	Successors and Assigns			20
9.11	Headings			20
9.12	Severability.			20
9.13	Entire Agreement			20

 

 

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AMERICAN MEDICAL INSTRUMENTS HOLDINGS, INC.
2003 STOCK OPTION PLAN

 

 

ARTICLE I
ESTABLISHMENT AND PURPOSE

 

1.1

Establishment . This instrument, and the plan of compensation hereby established, shall be known as the American Medical Instruments Holdings, Inc. 2003 Stock Option Plan and shall be hereinafter referred to as the "Plan." The Plan is hereby promulgated by American Medical Instruments Holdings, Inc. (hereinafter referred to as the "Company"), effective as of April ___, 2003, as adopted by the Board of Directors of the Company.

 

1.2

Purpose . The purpose of the Plan is to provide additional incentive to persons who can make or are making, and can continue to make, substantial contributions to the growth and success of the Company, in order to attract and retain the employment and services of such persons and to encourage and reward such contributions, by providing these individuals with the opportunity to directly, on a long-tern basis, participate in the Company's growth and success through stock ownership; it being the judgment of the Board of Directors of the Company that so providing such additional incentive to such persons advances the overall interests of the Company's business and enhances the value of the Company for all of its shareholders.

 

1.3

Type of Plan . Options granted under the Plan shall be nonqualified stock options, meaning options to purchase Common Stock in the Company which do not qualify as incentive stock options within the meaning of Section 422(b) of the Code. The Plan is intended to be an "unfunded" plan of compensation; and shall not constitute any type of "employee benefit plan" subject to the Employee Retirement Income Security Act of 1974 ("ERISA").

 

1.4

Term of Plan . The Plan shall continue in effect from the effective date set forth in Section 1.1 hereof until the earlier of the Plan's termination by the Board of Directors of the Company, as provided in Section 9.1 hereof, or the date on which all shares of Common Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan have lapsed.

 

 

ARTICLE II

DEFINITIONS

 

For purposes of the Plan, the following terms shall be defined as set forth below:

 

 

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2.1.

" Affiliate " shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Company including, without limitation, any member of an affiliated group of which the Company is a common parent corporation as provided in Section 1504 of the Code.

 

2.2

" Agreement " shall mean, individually or collectively, any agreement entered into pursuant to Section 6.2 hereof, pursuant to which an Option is granted to a Participant, including any amendments thereto made pursuant to Section 9.1 hereof.

 

2.3

" Beneficiary " shall mean the person, persons, trust or trusts which have been designated by a Participant in his or her most recent written beneficiary designation filed with the Company to receive the benefits specified under the Plan upon such Participant's death or to which Options or other rights are transferred if and to the extent permitted hereunder. If, upon a Participant's death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary shall mean the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits.

 

2.4

" Board " shall mean the Board of Directors of the Company.

 

2.5

" Cause " shall mean, for purposes of whether and when a Participant has incurred a Termination of Employment for Cause, any act or omission which permits the Company to terminate the written agreement or arrangement between the Participant and the Company for "cause" as defined in such agreement or arrangement, or in the event there is no such agreement or arrangement or the agreement or arrangement does not define the term "cause" or a substantially equivalent term, then Cause shall mean (a) any act or omission which, constitutes cause under the Company's established practices, policies or guidelines applicable to the Participant; (b) the material breach of a fiduciary duty owing to the Company, including without limitation, fraud and embezzlement or (c) conduct or the omission of conduct on the part of the Participant which constitutes a material breach of any statutory or common-law duty of loyalty to the Company.

 

2.6

" Change in Control " shall have the meaning set forth in Section 8.4.

 

2.7

" Code " shall mean the Internal Revenue Code of 1986, as amended or replaced from time to time, and the regulations thereunder..

 

2.8

" Commission " shall mean the Securities and Exchange Commission orany successor thereto.

 

2.9

" Committee " shall mean any person or persons who may be appointed or designated by the Board to administer the Plan, as described in Section 3.1 below.

 

 

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2.10

" Common Stock " shall mean the shares of the Company's regular voting common stock, no par value, whether presently or hereafter issued, and any other stock or security resulting from adjustment thereof as described hereinafter or the common stock of any successor to the Company which is designated for the purposes of the Plan.

 

2.11

" Company " shall mean American Medical Instruments Holdings, Inc., a StateplaceDelaware corporation, and includes any successor or assignee corporation or corporations into which the Company may be merged, changed or consolidated.

 

2.12

" Disability " shall mean a mental or physical illness that entitles the Participant to receive benefits under the long-term disability plan of the Company, or if the Participant is not covered by such a plan or the Participant is not an employee of the Company, a mental or physical illness that renders a Participant totally and permanently incapable of performing the Participant's duties for the Company. Notwithstanding the foregoing, a Disability shall not qualify under this Plan if it is the result of (i) a willfully self-inflicted injury or willfully self-induced sickness; or (ii) an injury or disease contracted, suffered, or incurred while participating in a felony criminal offense. The determination of Disability shall be made by the Board. The determination of Disability for purposes of this Plan shall not be construed to be an admission of disability by any entity or person for any other purpose.

 

2.13

" Exchange Act " shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

2.14

" Fair Market Value " shall mean, as of any date, the value of one share of Common Stock, determined pursuant to the applicable method described below:

 

(a)

if the Common Stock is listed on a national securities exchange or quoted on NASDAQ, the closing price of the Common Stock on the relevant date (or, if such date is not a business day or a day on which quotations are reported, then on the immediately preceding date on which quotations were reported), as reported by the principal national exchange on which such shares are traded (in the case of an exchange) or by NASDAQ, as the case may be;

 

(b)

if the Common Stock is not listed on a national securities exchange or quoted 'on NASDAQ, but is actively traded in the over-the-counter market, the average of the closing bid and asked prices for the Common Stock on the relevant date (or, if such date is not a business day or a day on which quotations are reported, then on the immediately preceding date on which quotations were reported), or the most recent preceding date for which such quotations are reported; and

 

(c)

if, on the relevant date, the Common Stock is not publicly traded or reported as described in (a) or (b) above, the value determined in good faith by the Board.

 

 

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2.15

" Grant Date " shall mean the date as of which the Board makes a grant of an Option to a person eligible to participate in the Plan, or any other date determined by the Board.

2.16 "Option" shall mean a right, granted to a Participant under Section 6.1 hereof, to purchase Common Stock at a specified price during specified time periods.

 

2.17

" Option Period " shall mean the period during which an Option shall be exercisable in accordance with the related Agreement and Article VI.

 

2.18

" Option Price " shall mean the price at which the Common Stock may be purchased under an Option as provided in Section 6.3(b).

 

2.19

" Participant " shall mean a person who satisfies the eligibility conditions of Article V and with whom an Agreement has been entered into and remains effective under the Plan, and in the event a Representative is appointed for a Participant or another person becomes a Representative, then the term "Participant" shall mean such Representative. The term shall also include a trust for the benefit of the Participant, the Participant's parents, spouse or descendants, or a custodian under a uniform gifts to minors act or similar statute for the benefit of the Participant's descendants, to the extent permitted by the Board and not inconsistent with Rule 16b-3. Notwithstanding the foregoing, the term "Termination of Employment" shall mean the Termination of Employment of the person to whom the Option was originally granted.

 

2.20

" Plan " shall mean this American Medical Instruments Holdings, Inc. 2003 Stock Option Plan, as herein set forth and as may be amended from time to time.

 

2.21

" Representative " shall mean (a) the person or entity acting as the executor or administrator of a Participant's estate pursuant to the last will and testament of a Participant or pursuant to the laws of the jurisdiction in which the Participant had the Participant's primary residence at the date of the Participant's death; (b) the person or entity acting as the guardian or temporary guardian of a Participant subject to court supervision; (c) the person or entity which is the Beneficiary of the Participant upon or following the Participant's death; or (d) any person to whom an Option has been permissibly transferred; provided that only one of the foregoing shall be the Representative at any point in time as determined under applicable law and recognized by the Board. Any Representative shall be subject to all terms and conditions applicable to the Participant.

 

2.22

" Retirement " shall mean the Participant's Termination of Employment after attaining either the normal retirement age or the early retirement age as defined in the principal (as determined by the Board) tax-qualified plan of the Company, if the Participant is covered by such a plan, or if the Participant is not covered by such a plan, then age sixty-five (65).

 

 

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2.23

" Rule 16b-3 " shall mean Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated by the Commission under Section 16 of the Exchange Act.

 

2.24

" Securities Act " shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

2.25

" Termination of Employment " shall mean the occurrence of any act or event that actually or effectively causes or results in a person, ceasing, for whatever reason, to be an employee, officer, director, consultant or other service provider of the Company, including, without limitation, Retirement, death, Disability, cessation at the election of the Participant, or dismissal by the Company. A transfer of employment from the Company to an entity which is an Affiliate as defined in Section 2.1 or from such an entity to the Company, shall not be a Termination of Employment, unless expressly determined by the Board. With, respect to any person who is not an employee of the Company, the Board may determine and include in such person's Agreement more detailed or particular provisions concerning what act or event shall constitute a Termination of Employment with respect to that person.

 

2.26

" Transfer " shall mean any sale, gift, assignment, distribution, conveyance, pledge, hypothecation, encumbrance or other transfer of title, whether by operation of law or otherwise.

 

In addition, certain other terms used herein shall have the definitions given to such terms in the first place in which the terms are used.

 

ARTICLE III
ADMINISTRATION

 

3.1

Structure . The Plan shall be administered by the Board. The Board may appoint a committee (the "Committee") comprised of one or more members of the Board to exercise designated functions of the Board under the Plan.

 

In the event that the Board appoints a Committee, the term "Board" shall be deemed to refer to the Committee to the extent required and consistent with the specific terms' of the Board's appointment of the Committee. A majority of the members of an appointed Committee shall constitute a quorum, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by all of the members, shall be the acts of the. Committee. A member of the Committee shall not exercise any discretion respecting himself or herself under the Plan. The Board shall have the authority to remove, replace or fill any vacancy of any member of the Committee upon notice to the Committee and the affected member. Any member of the Committee may resign upon notice to the Board. The Committee may allocate among one or more of its members, or may delegate to one or more of its agents, such duties and responsibilities as it determines.

 

 

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Notwithstanding anything herein to the contrary, with respect to grants of Options to individuals who are "Officers" and "Directors" (as such terms are defined for purposes of Section 16 of the Exchange Act) of the Company, at such time or in such circumstances as such individuals are subject to Section 16 of the Exchange Act, such grants shall be made and administered by a "Rule 16b-3 Committee" appointed by the Board. Such Rule 16b-3 Committee shall consist solely of two. (2) or more "Non-Employee Directors" (as defined for purposes of Rule 16b-3) and shall otherwise be constituted and act in such manner as to permit such grants to Officers and Directors and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3.

 

Further notwithstanding anything herein to the contrary, with respect to grants of Options to individuals who are "Covered Employees" (as defined for purposes of Section 162(m) of the Code), at such time or in such circumstances as Section 162(m) of the Code may be applicable to the Company as a 'Publicly Held Company" (as defined for purposes of Section 162(m) of the Code), such grants shall be made and administered by a "Section 162(m) Committee" appointed by the Board. Such Section 162(m) Committee shall consist solely of two (2) or more "Outside Directors" and shall otherwise be constituted and act in such manner as to permit such grants to Covered Employees to qualify as "Performance-Based Compensation" excludable from "Applicable Employee Remuneration" (as said terms are defined for purposes of Section 162(m) of the Code) in order that the Company not be subject to the limitation on deductions allowed for Applicable Employee Remuneration set forth in Section 162(m) of the Code.

 

Any Rule 16b-3 Committee or Section 162(m) Committee appointed by the Board shall function and have authority, and be subject to the constitutional and procedural provisions, as herein provided with respect to any Committee appointed by the Board, applicable to the making and administration of the grants of Options with .respect to which the Committee is appointed. A Rule 16-b Committee or Section 162(m) Committee may be a subcommittee of a Committee otherwise appointed by the Board.

 

3.2

Authority . Subject to the terms of the Plan, the Board, and any Committee appointed by the Board subject to the specific terms of the Board's appointment of the Committee, shall have the authority:

 

(a)

to select those persons to whom Options may be granted from time to tune; to determine whether and to what extent Options are to be granted hereunder; and to determine the number of shares of Common Stock to be covered by each Option granted hereunder;

 

(b)

to determine the terms and conditions of any Option granted hereunder (including, but not limited to, the Option Price, the Option Period, any exercise restriction or limitation and any exercise acceleration, forfeiture or waiver regarding any Option or any shares of Common Stock relating thereto, any performance criteria and the satisfaction of such criteria);

 

 

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(c)

to determine the Fair Market Value of one share of Common Stock as of any date;

 

(d)

to adjust the terms and conditions, at any time or from time to time, of any Option, subject to the limitations of Section 9.1;

 

(e)

to provide for the forms of Agreements to be utilized in connection with the Plan;

 

(f)

to prescribe the manner in which and the form on which Participants may designate a Beneficiary;

 

(g)

to• determine the• identity of a Participant's. Beneficiary or Representative for purposes of the Plan;

 

(h)

to determine whether a Participant has a Disability or a Retirement; and to determine whether and with what effect a Participant has incurred a Termination of Employment;

 

(i)

to determine what securities law requirements are applicable to the Plan, Options and the issuance of shares of Common Stock under the Plan and to require of a Participant that appropriate action be taken with respect to such requirements;

 

(j)

to cancel, with the consent of the Participant or as otherwise provided in the Plan or an Agreement, outstanding Options;

 

(k)

to interpret and make final determinations with respect to the remaining number of shares of Common Stock available under the Plan;

 

(l)

to determine the restrictions or limitations on the transfer of Common Stock; and to determine whether the Company or any other person has a right or obligation to purchase Common Stock from a Participant and, if so, the terms and conditions on which such Common Stock is to be purchased;

 

(m)

to determine whether an Option is to be adjusted, modified or purchased, or is to become fully exercisable, under the Plan or the terms of an Agreement;

 

(n)

to determine the permissible methods of Option exercise and. payment;

 

 

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(o)

to adopt, amend and rescind such rules, guidelines, procedures and practices as, in its opinion, may be advisable in the administration of the Plan (and which may differ with respect to Options granted at different times or to different Participants);

 

(p)

to suspend or delay any time period described in the Plan or any Agreement if the Board (or, as the case may be, Committee) determines the applicable action may constitute a violation of any law, or result in liability under any law to the Company or a shareholder of the Company, until such time as the action required or permitted shall not constitute such violation of law or result in such liability;

 

(q)

to appoint and compensate agents, counsel, auditors or other specialists to aid it in the discharge of its duties; and

 

(r)

to otherwise interpret and apply the terms and provisions of the Plan and any Option issued under the Plan (and any Agreement), and to otherwise supervise the administration of the Plan.

 

Any determination made by the Board (or, as the case may be, Committee) pursuant to the provisions of the Plan shall be made in its sole discretion, and in the case of any determination relating to an Option, may be made at the time of the grant of the Option or, unless in contravention of any express term of the Plan or an Agreement, at any time thereafter. All determinations and decisions made, and actions undertaken, by the Board (or, as the case may be, Committee) pursuant to the provisions of the Plan shall be final and binding for all purposes and on all persons, including the Company and Participants. No determination shall be subject to de novo review if challenged in court.

 

3.3

Liability and Indemnification . No member of the Board or any Committee shall be liable for any action or determination made or taken by the member, or the Board or Committee, in good faith with respect to the Plan. Each member of the Board or any Committee shall be fully justified in relying or acting in good faith upon any report made by the independent public accountants of the Company, and upon any other information furnished in connection with the Plan. In no event shall any person who is or shall have. been a member of the Board or any Committee b