1997 Executive Stock Purchase And Option Plan

Dade Behring Holdings, Inc.
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1997 EXECUTIVE STOCK PURCHASE AND OPTION PLAN
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1. Purpose of Plan. This 1997 Executive Stock Purchase and Option Plan (the "Plan") of Dade Behring Holdings, Inc. (the "Company") is designed to provide incentives to such present and future officers, employees, consultants or advisors of the Company or its subsidiaries as may be selected in the sole discretion of the Board (collectively, "Participants"), through the grant of Options by the Company to Participants or through the sale of Common Stock to Participants. Only those Participants who are employees of the Company and its Subsidiaries shall be eligible to receive incentive stock options.


2. Definitions. Certain terms used in this Plan have the meanings set forth below:


"Board" means the Company's board of directors.


"Cause" shall have the meaning assigned to such term in any individual Participant's written employment arrangements with the Company or any of its Subsidiaries or, in the absence of any such written employment arrangements, "Cause" shall mean (i) the intentional disregard of a written direction from the Board to a Participant to which such Participant has not objected within ten (10) days of receiving such written direction, which intentional disregard is materially injurious to the Company or any of its Subsidiaries, (ii) the knowing and intentional theft by such Participant of property of the Company or any of its Subsidiaries, which property has a substantial value, (iii) the commission by such Participant of an act of moral turpitude which is materially injurious to the Company or any of its Subsidiaries or (iv) any material breach of this or any employment agreement between the Company or its Subsidiaries and such Participant or any material breach of any executive agreement evidencing the purchase and sale of Common Stock or the grant of Options by the Company to such Participant.


"Class L Common" means the Company's Class L Common Stock, par value $.01 per share, or, in the event that the outstanding shares of Class L Common are hereafter recapitalized, converted into or exchanged for different stock or securities of the Company, such other stock or securities.


"Code" means the Internal Revenue Code of 1986, as it may be amended from time to time.


"Common" means the Company's Common Stock, par value $.01 per share, or, in the event that the outstanding shares of Common are hereafter recapitalized, converted into or exchanged for different stock or securities of the Company, such other stock or securities.


"Common Stock" means the Class L Common and the Common.


"Disability" means (i) any physical or mental incapacitation which results in a Participant's inability to perform his or her duties and responsibilities for the Company and its Subsidiaries for a total of 120 days during any 12 month period, as determined by the Board in its good faith judgment and (ii) shall be deemed to have occurred on the 120th day of such inability to perform.


"Executive Stock" with respect to a Participant, means any Common Stock purchased by such Participant hereunder and any Common Stock issued to such Participant upon exercise of any Options granted hereunder.


"Fair Market Value" of a share of Common Stock means (a) the mean between the highest and lowest reported sale prices of a share of Common Stock on the New York Stock Exchange--Composite Transactions Table (or, if not so reported, on any domestic stock exchanges on which the Common Stock is then listed); or (b) if the Common Stock is not listed on any domestic stock exchange, the mean between the closing high bid and low asked prices of a share of Common Stock as reported by the National Association of Securities Dealers Automated Quotation System (or, if not so reported, by the system then regarded as the most reliable source of such quotations); or (c) if the Common Stock is listed on a domestic stock exchange or quoted in the domestic over-the-counter market, but there are not reported sales or quotations, as the case may be, on the given date, the value determined pursuant to (a) or (b) above using the reported sale prices or quotations on the last previous date on which so reported; or (d) if none of the foregoing clauses apply, the fair market value of a share of Common Stock without discounts as determined in good faith by the Board and stated in writing in a notice delivered to the holders of the Common Stock involved (a "Determination Notice").


"Independent Third Party" means any person who, immediately prior to the contemplated transaction, does not own in excess of 5% of the Company's Common Stock on a fully-diluted basis (a "5% Owner"), who is not controlling, controlled by or under common control with any such 5% Owner and who is not the spouse or descendent (by birth or adoption) of any such 5% Owner or a trust for the benefit of such 5% Owner and/or such other persons.


"Investors" means the Persons listed on Schedule A hereto.


"Option" means any option enabling the holder thereof to purchase any class of Common Stock from the Company granted by the Board pursuant to the provisions of this Plan. Options to be granted under this Plan may be incentive stock options within the meaning of Section 422 of the Code ("Incentive Stock Options") or in such other form, consistent with this Plan, as the Board may determine.


"Original Value" for each share of Executive Stock will be equal to the price paid by the Participant for each share of Common Stock (as proportionally adjusted for all stock splits, stock dividends, and other recapitalizations affecting the Common Stock subsequent to the date of adoption hereof).


"Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time the option is granted, each of the corporations other than the last corporation in the chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.


3. Grant of Options. The Board shall have the right and power to grant to any Participant, at any time prior to the termination of this Plan, Options in such quantity, at such price, on such terms and subject to such conditions that are consistent with this Plan and established by the Board. Options granted under this Plan shall be in one of the forms described in this paragraph 3 below, or in such other form or forms as the Board may determine, and shall be subject to such additional terms and conditions and evidenced by agreements as shall be determined from time to time by the Board. Except as otherwise set forth in such an agreement between the Company and any Participant, Options shall be subject to all of the terms and conditions contained in this Plan.


(a) Target Options.


(i) A "Tranche I Option" shall entitle a Participant to purchase from
the Company one or more shares of Common and shall have an exercise price
per share as determined by the Board and evidenced in such Participant's
executive agreement (the "Tranche I Price").


(ii) A "Tranche II Option" shall entitle a Participant to purchase
from the Company one or more shares of Common and shall have an exercise
price per share as determined by the Board and evidenced in such
Participant's executive agreement (the "Tranche II Price").


(iii) Tranche I Options and Tranche II Options are referred to herein
as "Target Options," and the shares issued upon exercise of the Tranche I
Options or the Tranche II Options are referred to herein as "Target Option
Shares". The number of Target Option Shares, the Tranche I Price and the
Tranche II Price will be equitably adjusted for any stock split, stock
dividend, reclassification or recapitalization of the Company which occurs
subsequent to the date of adoption hereof. The Target Options will expire
on the earlier of the tenth anniversary of the date of grant or the date of
termination of the respective Participant's employment with the Company or
any of its Subsidiaries for any reason (the "Termination Date"); provided
that any portion of the Target Options which has not vested and become
exercisable prior to the Termination Date shall expire on the Termination
Date and may not be exercised under any circumstance; provided further that
any portion of the Target Options which has vested and become exercisable
prior to the Termination Date will expire on the earlier of (i) 30 days
after the Termination Date and (ii) the tenth anniversary of the date such
options are granted. Target Options are not intended to be "incentive stock
options" within the meaning of Section 422A of the Internal Revenue Code.


(iv) Exercisability. Target Options will immediately vest and become
exercisable


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with respect to Target Option Shares on the date immediately prior to the
tenth anniversary of the date of adoption hereof; provided that upon the
occurrence of a Tranche I Acceleration Event, all of the Tranche I Options
will immediately vest and become exercisable and upon the occurrence of a
Tranche II Acceleration Event, all of the Tranche II Options will
immediately vest and become exercisable. For this purpose, a Tranche I
Acceleration Event shall be the date on which the purchasers of the
Company's common stock under that certain Stock Purchase Agreement dated as
of December 20, 1994 (the "Stock Purchase Agreement") as set forth on
Exhibit A attached hereto (collectively, the "Investors") have achieved an
Investor Return Multiple (as defined below) of at least three (a "Tranche I
Acceleration Event") and a Tranche II Acceleration Event shall be the date
on which the Investors have achieved an Investor Return Multiple of at
least five (a "Tranche II Acceleration Event"). A Tranche I Acceleration
Event and Tranche II Acceleration Event are also referred to herein as
"Acceleration Events."


(v) Vesting of Target Option Shares. Target Option Shares shall be
fully vested immediately upon exercise of the Target Options with respect
thereto.


(vi) Procedure for Exercise. At any time after all or any portion of
the Target Options have become exercisable with respect to any Target
Option Shares and prior to the Expiration Date, a Participant may exercise
all or a portion of his or her Target Options with respect to Target Option
Shares which have become vested and exercisable by delivering written
notice of exercise to the Company together with (i) a written
acknowledgment that such Participant has read and has been afforded an
opportunity to ask questions of management of the Company regarding all
financial and other information provided to such Participant regarding the
Company and (ii) payment in full by delivery of a cashier's, certified
check or wire transfer in the amount equal to the product of (A) in the
case of the Tranche I Option, the Tranche I Price multiplied by the number
of Tranche I Option Shares to be acquired and (B) in the case of the
Tranche II Option, the Tranche II Price multiplied by the number of Tranche
II Option Shares to be acquired. As a condition to any exercise of a Target
Option, a Participant will permit the Company to deliver to him or her all
financial and other information regarding the Company and its Subsidiaries
which it believes necessary to enable such Participant to make an informed
investment decision.


(vii) Determination of Investor Return Multiple.


(A) "Acceleration Event" will be the first to occur of (i) a Sale of the Company or (ii) on any date subsequent to the date that (A) the Company sells any shares of its common stock pursuant to a registration statement filed under the Securities Act of 1933, as amended and (B) the Investors or their affiliates cease to own in the aggregate at least 20% of the outstanding common stock of the Company.


(B) "Investor Return Multiple" means the number determined by dividing Cash Inflows (as defined below) by Cash Outflows (as defined below). The calculation of the


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Investor Return Multiple will be determined in good faith by the Board.


(C) "Cash Inflows" as used herein shall include the sum of all cash payments received by the Investors on the consummation of or prior to an Acceleration Event with respect to debt or equity securities of the Company purchased by the Investors (excluding all management fees, points, and other fees paid to the Investors by or on behalf of the Company and/or its Subsidiaries) prior to such Acceleration Event (whether such payments are received from the Company or any third party, and whether such payments are received as interest, dividends, proceeds with respect to sale or redemption of such securities, upon a liquidation of the Company or otherwise), including reimbursement for payments made by Investors in respect of fees and expenses incurred in connection therewith.


(D) "Cash Outflows" as used herein shall include the sum of all cash payments and investments made by the Investors to and in the Company and to others to acquire debt or equity securities of the Company prior to an Acceleration Event, including payments made by Investors in respect of fees and expenses incurred in connection therewith.


(E) "Sale of the Company" means any transaction involving the Company and an Independent Third Party or affiliated group of Independent Third Parties pursuant to which such party or parties acquire (i) a majority of the outstanding shares of capital stock of the Company entitled to vote generally in the election of the Company's board of directors (whether by merger, consolidation or sale or transfer of the Company's capital stock) or (ii) all or substantially all of the Company's assets determined on ...