Exhibit 1
RESTRICTED STOCK AGREEMENT
UNDER THE INVERNESS MEDICAL INNOVATIONS, INC.
2001 STOCK OPTION AND INCENTIVE PLAN
NAME OF GRANTEE: Xxx Xxxxxxxxx (the "GRANTEE")
NO. OF SHARES: 152.741423722644 Shares of Common Stock
GRANT DATE: August 15, 2001
PER SHARE PURCHASE PRICE: $69,827.70993 (the "PER SHARE PURCHASE PRICE")
Pursuant to the Inverness Medical Innovations, Inc. 2001 Stock Option and
Incentive Plan (the "PLAN"), Inverness Medical Innovations, Inc., a Delaware
corporation (together with its successors, the "COMPANY"), hereby grants, sells
and issues to the individual named above, who is an officer, employee, director,
consultant or other key person of the Company or any of its subsidiaries, the
Shares (as defined below) at the Per Share Purchase Price subject to the terms
and conditions set forth herein and in the Plan. The Grantee agrees to the
provisions set forth herein and acknowledges that each such provision is a
material condition of the Company's agreement to issue and sell the Shares to
him or her. The Company hereby acknowledges receipt of the following
consideration in full payment for the Shares: (1) cash in the amount of $0.15;
and (2) a full recourse promissory note in the amount of $10,655,583.68. This
Agreement shall be subject to and governed by all the terms and conditions of
the Plan.
1. DEFINITIONS. For the purposes of this Agreement, the following terms
shall have the following respective meanings. All capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the
Plan.
"CAUSE" means a vote of the Board resolving that the Grantee has
committed willful misconduct or gross negligence in the performance of duty in
connection with the business affairs of the Company which, as determined in good
faith by the Board, would: (i) materially adversely affect the business or the
reputation of the Company with its current or prospective customers, suppliers,
lenders and/or other third parties with whom it does or might do business; or
(ii) expose the Company to a risk of civil or criminal legal damages,
liabilities or penalties; PROVIDED that if such willful misconduct or gross
negligence and the adverse effects or damages therefrom may be cured, the
Grantee shall have fourteen (14) days or such additional time as may be
reasonably determined by the Board to effect such cure from receipt by the
Grantee of a written demand from the Board.
"COMMON STOCK" means the Company's Common Stock, par value $0.001
per share, together with any shares into which Common Stock may be converted or
exchanged, as provided above and herein.
"CONSTRUCTIVE TERMINATION" means the occurrence of any of the
following events in the absence of Cause: (i) a significant adverse change in
the nature or scope of Grantee's responsibilities, authorities, powers,
functions or duties; (ii) a Change of Control of the Company, except for a
Change of Control which results from the Merger; or (iii) the sale of all or
substantially all of the assets of the Company.
"DISABILITY" means the Grantee's inability to perform his normal
required services for the Company and its subsidiaries by reason of his mental
or physical disability, as determined by the Board in good faith in its sole
discretion.
"FOUR-YEAR TERMINATION EVENT" means the termination of Xxxxxxx's
employment with the Company and its subsidiaries for any reason whatsoever,
regardless of the circumstances thereof, and including without limitation upon
death, Disability, retirement or discharge or resignation for any reason,
whether voluntary or involuntary. Upon a Four-Year Termination Event, the
Grantee shall cease to vest in any Four-Year Shares that are Restricted Shares.
"MERGER" means the merger of Inverness Medical Technology, Inc. with
a wholly-owned subsidiary of Xxxxxxx & Xxxxxxx pursuant to the Agreement and
Plan of Split-Off and Merger dated as of May 23, 2001, among Xxxxxxx & Xxxxxxx,
Sunrise Acquisition Corp. and Inverness Medical Technology, Inc. (the "Merger
Agreement")
"NEGATIVE VOTE" means the failure of the stockholders of Inverness
Medical Technology, Inc. entitled to vote at the Special Meeting to adopt the
Merger Agreement, approve the Company's 2001 Stock Option and Incentive Plan and
approve the Executive Bonus Plan, each as described in the Registration
Statement on Form S-4 filed by the Company with the Securities and Exchange
Commission on August 13, 2001, as the same may be amended from time to time.
"PERMITTED TRANSFEREES" means any of the following to whom the
Grantee may transfer Restricted Shares hereunder (as set forth in Section 4):
the Grantee's spouse, children (natural or adopted), stepchildren, a trust for
the sole benefit of one or more such family members of which the Grantee is the
settlor, or a family limited partnership or family limited liability company of
which the limited partners or members, as the case may be, consist solely of one
or more such family members; PROVIDED, HOWEVER, that any such trust, family
limited partnership, or family limited liability company does not require or
permit distribution of any Restricted Shares during the term of this Agreement
unless subject to the terms of this Agreement. Upon the death of the Grantee (or
a Permitted Transferee to whom Restricted Shares have been transferred
hereunder), the term Permitted Transferees shall also include such deceased
Grantee's (or such deceased Permitted Transferee's) estate, executions,
administrations, personal representations, heirs, legatees and distributees, as
the case may be.
"PERSON" means any individual, corporation, partnership (limited or
general), limited liability company, limited liability partnership, association,
trust, joint venture, unincorporated organization or any similar entity.
"RESTRICTED SHARES" shall initially mean all of the Shares being
purchased by the Grantee on the date hereof, PROVIDED that for so long as the
Grantee remains an employee of the Company or any of its subsidiaries: (i)
101.827615815096 Shares shall become Vested Shares in 36 equal monthly
installments commencing on the last day of the calendar month during which the
Merger becomes effective (all Shares subject to vesting pursuant to (i), the
"THREE-YEAR SHARES") and (ii) 50.913807907548 Shares shall become Vested Shares
in 48 equal monthly installments commencing on the last day of the calendar
month during which the Merger becomes effective (all Shares subject to vesting
pursuant to (ii), the "FOUR-YEAR SHARES").
"SHARES" means the shares of Common Stock being purchased by the
Grantee on the date hereof and any additional shares of Common Stock or other
securities received in respect of the Shares, as a dividend on, or otherwise on
account of, the Shares.
"SPECIAL MEETING" means the special meeting of the stockholders of
Inverness Medical Technology, Inc. at which such stockholders will vote upon a
proposal to adopt the Merger Agreement, a proposal to approve the Company's 2001
Stock Option and Incentive Plan and a proposal to approve the Company's
Executive Bonus Plan.
"THREE-YEAR TERMINATION EVENT" means the termination of the
Grantee's employment with the Company and its subsidiaries for any reason
whatsoever, regardless of the circumstances thereof, and including without
limitation upon retirement or discharge or resignation for any reason, whether
voluntary or involuntary; PROVIDED, HOWEVER, that none of death, Disability,
Constructive Termination or termination by the Company or its subsidiaries of
Grantee's employment with the Company and its subsidiaries without Cause shall
be a Three-Year Termination Event. Upon a Three-Year Termination Event, the
Grantee shall cease to vest in any Three-Year Shares that are Restricted Shares,
notwithstanding anything to the contrary set forth herein.
"VESTED SHARES" means all Shares which are not Restricted Shares.
2. PURCHASE AND SALE OF SHARES; INVESTMENT REPRESENTATIONS.
(a) PURCHASE AND SALE. On the date hereof, the Company hereby sells
to the Grantee, and the Grantee hereby purchases from the Company, the number of
Shares set forth above for the Per Share Purchase Price multiplied by the number
of shares set forth above.
(b) INVESTMENT REPRESENTATIONS. In connection with the purchase and
sale of the Shares contemplated by Section 2(a) above, the Grantee hereby
represents and warrants to the Company as follows:
(i) The Grantee is purchasing the Shares for the Grantee's
own account for investment only, and not for resale or with a view to the
distribution thereof.
(ii) The Grantee has had such an opportunity as he or she has
deemed adequate to obtain from the Company such information as is
necessary to permit him or her to evaluate the merits and risks of the
Grantee's investment in the Company and has consulted with the Grantee's
own advisers with respect to the Grantee's investment in the Company.
(iii) The Grantee has sufficient experience in business,
financial and investment matters to be able to evaluate the risks
involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.
(iv) The Grantee can afford a complete loss of the value of
the Shares and is able to bear the economic risk of holding such Shares
for an indefinite period.
(v) The Grantee understands that the Shares are not
registered under the Securities Act of 1933, as amended (the "Act") (it
being understood that the Shares are being issued and sold in reliance on
the exemption provided in Rule 701 thereunder) or any applicable state
securities or "blue sky" laws and may not be sold or otherwise
transferred or disposed of in the absence of an effective registration
statement under the Act and under any applicable state securities or
"blue sky" laws (or exemptions from the registration requirements
thereof). The Grantee further acknowledges that certificates representing
the Shares will bear restrictive legends reflecting the foregoing.
3. REPURCHASE RIGHT.
(a) REPURCHASE. Upon the occurrence of a Three-Year Termination
Event or a Four-Year Termination Event the Company or its assigns shall have the
right and option to repurchase all or any portion of the Restricted Shares held
by the Grantee or any Permitted Transferee. Upon the occurrence of a Negative
Vote, the Company or its assigns shall repurchase the Restricted Shares held by
the Grantee or any Permitted Transferee. The purchase and sale arrangements
contemplated by the preceding sentences of this Section 3(a) are referred to
herein as the "REPURCHASE."
(b) REPURCHASE PRICE. The per share purchase price of the Restricted
Shares subject to the Repurchase (the "REPURCHASE PRICE") shall be the Per Share
Purchase Price.
(c) CLOSING PROCEDURE. The Company or its assigns shall effect the
Repurchase (if so elected) by delivering or mailing to the Grantee (and/or, if
applicable, any Permitted Transferee) written notice within six (6) months after
the Three-Year Termination Event, Four-Year Termination Event or Negative Vote,
specifying a date within such six-month period in which the Repurchase shall be
effected. Upon such notification, the Grantee and any Permitted Transferees
shall promptly surrender to the Company any certificates representing the
Restricted Shares being purchased, together with a duly executed stock power for
the transfer of such Restricted Shares to the Company or the Company's assignee
or assignees. Upon the Company's or its assignee's receipt of the certificates
from the Grantee or any Permitted Transferee, the Company or its assignee or
assignees shall deliver to him, her or them a check for the Repurchase Price of
the Restricted Shares being purchased, PROVIDED, HOWEVER, that the Company may
pay the Repurchase Price for such shares by offsetting and canceling any
indebtedness then owed by the Grantee to the Company. At such time, the Grantee
and/or any holder of the Restricted Shares shall deliver to the Company the
certificate or certificates representing the Restricted Shares so repurchased,
duly endorsed for transfer, free and clear of any liens or encumbrances. The
Repurchase right specified in this Section 3 shall survive and remain in effect
as to Restricted Shares following and notwithstanding any public offering by or
merger or other transaction involving the Company and certificates representing
such Restricted Shares shall bear legends to such effect.
4. RESTRICTIONS AND CONDITIONS.
(a) Shares of Restricted Shares granted herein may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of by the
Grantee prior to vesting.
(b) Any attempted disposition of Restricted Shares not in accordance
with the terms and conditions of this Section 4 shall be null and void, and the
Company shall not reflect on its records any change in record ownership of any
Restricted Shares as a result of any such disposition, shall otherwise refuse to
recognize any such disposition and shall not in any way give effect to any such
disposition of any Restricted Shares.
(c) Notwithstanding the foregoing provisions, the Grantee (but not
any transferee thereof) may sell, assign, transfer or give away any or all of
the Restricted Shares to Permitted Transferees; PROVIDED, HOWEVER, that such
Permitted Transferee(s) shall, as a condition to any such transfer, agree to be
subject to the provisions of this Agreement (including, without limitation, the
provisions of Section 3 and this Section 4) and shall have delivered a written
acknowledgment to that effect to the Company.
5. ACCELERATED VESTING. Upon the death, Disability or Constructive
Termination of Grantee or upon the termination by the Company or its
subsidiaries of the Grantee's employment with the Company and its subsidiaries
without Cause, all Three-Year Shares that are Restricted Shares at the time of
such death, Disability or termination shall vest.
6. LEGEND. Certificates evidencing the Restricted Shares granted herein
shall bear an appropriate legend, as determined by the Administrator in its sole
discretion, to the effect that such Shares are subject to restrictions set forth
herein and in the Plan.
7. WITHHOLDING TAXES. The Grantee shall, not later than the date as of
which the receipt of this Award becomes a taxable event for Federal income tax
purposes, pay to the Company or make arrangements satisfactory to the
Administrator for payment of any Federal, state, and local taxes required by law
to be withheld on account of such taxable event. The Grantee may elect to have
the required minimum tax withholding obligation satisfied, in whole or in part,
by (i) authorizing the Company to withhold from shares of Stock to be issued, or
(ii) transferring to the Company, a number of shares of Stock with an aggregate
Fair Market Value that would satisfy the withholding amount due.
8. ELECTION UNDER SECTION 83(b). The Grantee and the Company hereby agree
that the Grantee shall, within 30 days following the date of this Agreement,
file with the Internal Revenue Service and the Company an election under Section
83(b) of the Internal Revenue Code.
9. ASSIGNMENT. At the discretion of the Board, the Company shall have the
right to assign its rights with respect to the Repurchase to any Person or
Persons, in whole or in part in any particular instance, upon the same terms and
conditions applicable to the exercise thereof by the Company, and such assignee
or assignees of the Company shall then take and hold any
Shares so acquired subject to such terms as may be specified by the Company in
connection with any such assignment.
10. MISCELLANEOUS PROVISIONS.
(a) ADJUSTMENT FOR STOCK-SPLIT. In the event that the Company
effectuates a stock split of its Common Stock in connection with the Merger, the
number of Shares purchased pursuant to this Agreement shall be adjusted to
reflect such split; provided, however, that if any fractional shares result from
such adjustment, the total number of Shares shall be rounded up to the nearest
whole number.
(b) RECORD OWNER; DIVIDENDS. The Grantee and any Permitted
Transferees, during the duration of this Agreement, shall be considered the
record owners of and shall be entitled to vote the Shares if and to the extent
the Shares are entitled to voting rights. The Grantee and any Permitted
Transferees shall be entitled to receive all dividends and any other
distributions declared on the Shares; PROVIDED, HOWEVER, that the Company is
under no duty to declare any such dividends or to make any such distribution.
(c) EQUITABLE RELIEF. The parties hereto agree and declare that
legal remedies are inadequate to enforce the provisions of this Agreement and
that equitable relief, including specific performance and injunctive relief, may
be used to enforce the provisions of this Agreement.
(d) CHANGE AND MODIFICATIONS. This Agreement may not be orally
changed, modified or terminated, nor shall any oral waiver of any of its terms
be effective. This Agreement may be changed, modified or terminated only by an
agreement in writing signed by the Company and the Grantee.
(e) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to conflict
of law principles.
(f) HEADINGS. The headings are intended only for convenience in
finding the subject matter and do not constitute part of the text of this
Agreement and shall not be considered in the interpretation of this Agreement.
(g) SAVING CLAUSE. If any provision(s) of this Agreement shall be
determined to be illegal or unenforceable, such determination shall in no manner
affect the legality or enforceability of any other provision hereof.
(h) NOTICES. All notices, requests, consents and other
communications shall be in writing and be deemed given when delivered
personally, by facsimile transmission or when received if mailed by first class
registered or certified mail, postage prepaid. Notices to the Company or the
Grantee shall be addressed as set forth underneath their signatures below, or to
such other address or addresses as may have been furnished by such party in
writing to the other. Notices to any holder of the Shares other than the Grantee
shall be addressed to the address furnished by such holder to the Company.
(i) BENEFIT AND BINDING EFFECT. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, their respective
successors, assigns, and legal representatives. Without limitation of the
foregoing, upon any stock-for-stock merger in which the Company is not the
surviving entity, shares of the Company's successor issued in respect of the
Shares shall remain subject to vesting and Repurchase hereunder. The Company has
the right to assign this Agreement, and such assignee shall become entitled to
all the rights of the Company hereunder to the extent of such assignment.
(j) DISPUTE RESOLUTION. Except as provided below, any dispute
arising out of or relating to this Agreement or the breach, termination or
validity hereof shall be finally settled by binding arbitration conducted
expeditiously in accordance with the Comprehensive Arbitration Rules and
Procedures of JAMS or its successors (the "JAMS RULES"). The arbitration shall
be governed by the United States Arbitration Act, 9 U.S.C. sections 1-16, and
judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. The place of arbitration shall be Boston,
Massachusetts.
The parties covenant and agree that the arbitration shall commence within
60 days of the date on which a written demand for arbitration is filed by any
party hereto. In connection with the arbitration proceeding, the arbitrator
shall have the power to order the production of documents by each party and any
third-party witnesses. In addition, each party may take up to three depositions
as of right, and the arbitrator may in his or her discretion allow additional
depositions upon good cause shown by the moving party. However, the arbitrator
shall not have the power to order the answering of interrogatories or the
response to requests for admission. In connection with any arbitration, each
party shall provide to the other, no later than seven (7) business days before
the date of the arbitration, the identity of all persons that may testify at the
arbitration and a copy of all documents that may be introduced at the
arbitration or considered or used by a party's witness or expert. The
arbitrator's decision and award shall be made and delivered within six (6)
months of the selection of the arbitrator. The arbitrator's decision shall set
forth a reasoned basis for any award of damages or finding of liability. The
arbitrator shall not have power to award damages in excess of actual
compensatory damages and shall not multiply actual damages or award punitive
damages or any other damages that are specifically excluded under this
Agreement, and each party hereby irrevocably waives any claim to such damages.
The parties covenant and agree that they will participate in the
arbitration in good faith. This Section 10(j) applies equally to requests for
temporary, preliminary or permanent injunctive relief, except that in the case
of temporary or preliminary injunctive relief any party may proceed in court
without prior arbitration for the limited purpose of avoiding immediate and
irreparable harm.
Each of the parties hereto (i) hereby irrevocably submits to the
jurisdiction of any United States District Court of competent jurisdiction for
the purpose of enforcing the award or decision in any such proceeding, (ii)
hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution (except as protected
by applicable law), that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter hereof may
not be enforced in or by such court, and hereby waives and agrees not to seek
any review by any court of any other jurisdiction which may be called upon to
grant an enforcement of the judgment of any such court. Each of the parties
hereto hereby consents to service of process by registered mail at the address
to which notices are to be given. Each of the parties hereto agrees that its,
his or her submission to jurisdiction and its, his or her consent to service of
process by mail is made for the express benefit of the other parties hereto.
Final judgment against any party hereto in any such action, suit or proceeding
may be enforced in other jurisdictions by suit, action or proceeding on the
judgment, or in any other manner provided by or pursuant to the laws of such
other jurisdiction.
(k) COUNTERPARTS. For the convenience of the parties and to
facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
IN WITNESS WHEREOF, the Company and the Grantee have executed this
Restricted Stock Agreement as of the date first above written.
COMPANY
INVERNESS MEDICAL INNOVATIONS, INC.
By: /s/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
Title: Treasurer
GRANTEE
/s/ XXX XXXXXXXXX
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Name: Xxx Xxxxxxxxx
Address:
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
