Exhibit 10.4

 

INCENTIVE STOCK OPTION AGREEMENT
UNDER THE TRANSGENOMIC, INC.
2017 STOCK OPTION AND INCENTIVE PLAN

 

Name of Optionee:           No. of Option Shares:           Option Exercise
Price per Share: $     [FMV on Grant Date (110% of FMV if a 10% owner)]        
Grant Date:           Expiration Date:       [up to 10 years from the Grant Date
(5 if a 10% owner)]  

 

Pursuant to the Transgenomic, Inc. 2017 Stock Option and Incentive Plan as
amended through the date hereof (the “Plan”), Transgenomic, Inc. (the “Company”)
hereby grants to the Optionee named above, who is an employee of the Company or
a Subsidiary on the Grant Date, an option (the “Stock Option”) to purchase on or
prior to the Expiration Date specified above all or part of the number of shares
of Common Stock, par value $0.01 per share (the “Stock”), of the Company
specified above at the Option Exercise Price per Share specified above subject
to the terms and conditions set forth herein and in the Plan.

 

1.       Exercisability Schedule. No portion of this Stock Option may be
exercised until such portion shall have become exercisable. Except as set forth
below, and subject to the discretion of the Administrator (as defined in Section
2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock
Option shall be exercisable with respect to the following number of Option
Shares on the dates indicated so long as the Optionee remains an employee of the
Company or a Subsidiary on such dates:

 

Incremental Number of
Option Shares Exercisable* Exercisability Date _____________ (___%) ____________
_____________ (___%) ____________ _____________ (___%) ____________
_____________ (___%) ____________ _____________ (___%) ____________

* Max. of $100,000 per yr.

 

Notwithstanding the foregoing, this Stock Options will become 100% vested in the
event of a termination of the Optionee’s employment due to the Optionee’s death,
Disability or Retirement, provided Optionee has continuously served as a
director, employee or Consultant of the Company or a Subsidiary for the
three-year period immediately preceding the Optionee’s termination of employment
and that the Optionee was an employee of the Company or a Subsidiary on the
Grant Date. Once exercisable, this Stock Option shall continue to be exercisable
at any time or times prior to the close of business on the Expiration Date,
subject to the provisions hereof and of the Plan.

 

  

 

 

2.       Manner of Exercise.

 

(a)       The Optionee may exercise this Stock Option only in the following
manner: from time to time on or prior to the Expiration Date of this Stock
Option, the Optionee may give written notice to the Administrator of his or her
election to purchase some or all of the Option Shares purchasable at the time of
such notice. This notice shall specify the number of Option Shares to be
purchased.

 

Payment of the purchase price for the Option Shares may be made by one or more
of the following methods: (i) in cash, by certified or bank check or other
instrument acceptable to the Administrator; (ii) through the delivery (or
attestation to the ownership) of shares of Stock that have been purchased by the
Optionee on the open market or that are beneficially owned by the Optionee and
are not then subject to any restrictions under any Company plan and that
otherwise satisfy any holding periods as may be required by the Administrator;
or (iii) by the Optionee delivering to the Company a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver to
the Company cash or a check payable and acceptable to the Company to pay the
option purchase price, provided that in the event the Optionee chooses to pay
the option purchase price as so provided, the Optionee and the broker shall
comply with such procedures and enter into such agreements of indemnity and
other agreements as the Administrator shall prescribe as a condition of such
payment procedure; or (iv) a combination of (i), (ii) and (iii) above. Payment
instruments will be received subject to collection.

 

The transfer to the Optionee on the records of the Company or of the transfer
agent of the Option Shares will be contingent upon (i) the Company’s receipt
from the Optionee of the full purchase price for the Option Shares, as set forth
above, (ii) the fulfillment of any other requirements contained herein or in the
Plan or in any other agreement or provision of laws, and (iii) the receipt by
the Company of any agreement, statement or other evidence that the Company may
require to satisfy itself that the issuance of Stock to be purchased pursuant to
the exercise of Stock Options under the Plan and any subsequent resale of the
shares of Stock will be in compliance with applicable laws and regulations. In
the event the Optionee chooses to pay the purchase price by previously-owned
shares of Stock through the attestation method, the number of shares of Stock
transferred to the Optionee upon the exercise of the Stock Option shall be net
of the Shares attested to.

 

(b)       The shares of Stock purchased upon exercise of this Stock Option shall
be transferred to the Optionee on the records of the Company or of the transfer
agent upon compliance to the satisfaction of the Administrator with all
requirements under applicable laws or regulations in connection with such
transfer and with the requirements hereof and of the Plan. The determination of
the Administrator as to such compliance shall be final and binding on the
Optionee. The Optionee shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares of Stock subject to this
Stock Option unless and until this Stock Option shall have been exercised
pursuant to the terms hereof, the Company or the transfer agent shall have
transferred the shares to the Optionee, and the Optionee’s name shall have been
entered as the stockholder of record on the books of the Company. Thereupon, the
Optionee shall have full voting, dividend and other ownership rights with
respect to such shares of Stock.

 

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(c)       The minimum number of shares with respect to which this Stock Option
may be exercised at any one time shall be 100 shares, unless the number of
shares with respect to which this Stock Option is being exercised is the total
number of shares subject to exercise under this Stock Option at the time.

 

(d)       Notwithstanding any other provision hereof or of the Plan, no portion
of this Stock Option shall be exercisable after the Expiration Date hereof.

 

3.       Termination of Employment. If the Optionee’s employment by the Company
or a Subsidiary (as defined in the Plan) is terminated, the period within which
to exercise the Stock Option may be subject to earlier termination as set forth
below.

 

(a)       Termination Due to Death, Disability or Retirement.1 If the Optionee’s
employment terminates by reason of the Optionee’s death, Disability or
Retirement, any portion of this Stock Option outstanding on such date, to the
extent exercisable on the date of termination due to death, Disability or
Retirement, may thereafter be exercised, including by the Optionee’s legal
representative or legatee, for a period of 12 months from the date of
termination or until the Expiration Date, if earlier. Any portion of this Stock
Option that is not exercisable on the date of termination (or that does not
become exercisable on such date pursuant to Section 1 of this Agreement) shall
terminate immediately and be of no further force or effect. For purposes of this
Agreement, (i) “Retirement” means, the termination of Optionee’s employment or
service (A) on or after the Optionee’s attainment of age 65 or (B) as determined
by the Administrator in its absolute discretion pursuant to such other standard
as may be adopted by the Administrator and (ii) “Disability” means “disability”
as defined in Section 422(c) of the Code.

 

(b)       Termination for Cause. If the Optionee’s employment terminates for
Cause, any portion of this Stock Option outstanding on such date shall terminate
immediately and be of no further force and effect. For purposes hereof, “Cause”
shall mean, unless otherwise provided in an employment agreement between the
Company or a Subsidiary and the Optionee, a determination by the Administrator
that the Optionee shall be dismissed as a result of (i) any material breach by
the Optionee of any agreement between the Optionee and the Company or a
Subsidiary; (ii) the conviction of, indictment for or plea of nolo contendere by
the Optionee to a felony or a crime involving moral turpitude; or (iii) any
material misconduct or willful and deliberate non-performance (other than by
reason of disability) by the Optionee of the Optionee’s duties to the Company or
a Subsidiary.

 

(c)       Other Termination. If the Optionee’s employment terminates for any
reason other than the Optionee’s death, Disability or Retirement, or Cause, and
unless otherwise determined by the Administrator, any portion of this Stock
Option outstanding on such date may be exercised, to the extent exercisable on
the date of termination, for a period of three months from the date of
termination or until the Expiration Date, if earlier. Any portion of this Stock
Option that is not exercisable on the date of termination shall terminate
immediately and be of no further force or effect.

 

 

 

1 NOTE – If the Option is exercised more than three months after the termination
of service due to retirement, the option will cease to qualify as an ISO.

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The Administrator’s determination of the reason for termination of the
Optionee’s employment shall be conclusive and binding on the Optionee and his or
her representatives or legatees.

 

4.       Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Stock Option shall be subject to and governed by all the terms and
conditions of the Plan, including the powers of the Administrator set forth in
Section 2(b) of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.

 

5.       Transferability. This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution. This
Stock Option is exercisable, during the Optionee’s lifetime, only by the
Optionee, and thereafter, only by the Optionee’s legal representative or
legatee.

 

6.       Status of the Stock Option. This Stock Option is intended to qualify as
an “incentive stock option” under Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”), but the Company does not represent or warrant
that this Stock Option qualifies as such. The Optionee should consult with his
or her own tax advisors regarding the tax effects of this Stock Option and the
requirements necessary to obtain favorable income tax treatment under
Section 422 of the Code, including, but not limited to, holding period
requirements. To the extent any portion of this Stock Option does not so qualify
as an “incentive stock option,” such portion shall be deemed to be a
non-qualified stock option. If the Optionee intends to dispose or does dispose
(whether by sale, gift, transfer or otherwise) of any Option Shares within the
one-year period beginning on the date after the transfer of such shares to him
or her, or within the two-year period beginning on the day after the grant of
this Stock Option, he or she will so notify the Company within 30 days after
such disposition.

 

7.       Tax Withholding. The Optionee shall, not later than the date as of
which the exercise of this Stock Option 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 Company shall have the
authority to cause the minimum required tax withholding obligation to be
satisfied, in whole or in part, by withholding from shares of Stock to be issued
to the Optionee a number of shares of Stock with an aggregate Fair Market Value
that would satisfy the minimum withholding amount due.

 

8.       No Obligation to Continue Employment. Neither the Company nor any
Subsidiary is obligated by or as a result of the Plan or this Agreement to
continue the Optionee in employment and neither the Plan nor this Agreement
shall interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of the Optionee at any time.

 

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9.       Integration. This Agreement constitutes the entire agreement between
the parties with respect to this Stock Option and supersedes all prior
agreements and discussions between the parties concerning such subject matter.

 

10.       Data Privacy Consent. In order to administer the Plan and this
Agreement and to implement or structure future equity grants, the Company, its
subsidiaries and affiliates and certain agents thereof (together, the “Relevant
Companies”) may process any and all personal or professional data, including but
not limited to Social Security or other identification number, home address and
telephone number, date of birth and other information that is necessary or
desirable for the administration of the Plan and/or this Agreement (the
“Relevant Information”). By entering into this Agreement, the Optionee (i)
authorizes the Company to collect, process, register and transfer to the
Relevant Companies all Relevant Information; (ii) waives any privacy rights the
Optionee may have with respect to the Relevant Information; (iii) authorizes the
Relevant Companies to store and transmit such information in electronic form;
and (iv) authorizes the transfer of the Relevant Information to any jurisdiction
in which the Relevant Companies consider appropriate. The Optionee shall have
access to, and the right to change, the Relevant Information. Relevant
Information will only be used in accordance with applicable law.

 

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11.       Notices. Notices hereunder shall be mailed or delivered to the Company
at its principal place of business and shall be mailed or delivered to the
Optionee at the address on file with the Company or, in either case, at such
other address as one party may subsequently furnish to the other party in
writing.

 

  TRANSGENOMIC, INC.             By:         Title:  

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned. Electronic acceptance of this Agreement
pursuant to the Company’s instructions to the Optionee (including through an
online acceptance process) is acceptable.

 

Dated:               Optionee’s Signature                             Optionee’s
name and address:                                                              
         

 

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