EXHIBIT 10.49

 

APPLIED IMAGING CORP.

 

STAND-ALONE STOCK OPTION AGREEMENT

 

I. NOTICE OF STOCK OPTION GRANT

 

Name: Robin C. Stracey

 

You have been granted a Nonstatutory Stock Option to purchase Common Stock of
the Company, subject to the terms and conditions of this Agreement, as follows:

 

Date of Grant    November 17, 2003 Vesting Commencement Date    November 17,
2003 Exercise Price per Share    $1.41 Total Number of Shares Granted    200,000
Total Exercise Price    $282,000 Term/Expiration Date:    November 16, 2013

 

Vesting Schedule:

 

This Option will vest and may be exercised, in whole or in part, in accordance
with the following schedule:

 

25% of the Shares subject to the Option will vest one year after the Vesting
Commencement Date, and 1/48th of the Shares subject to the Option will vest each
month thereafter, so that the Option will be fully vested four (4) years from
the Vesting Commencement Date, subject to the Optionee continuing to be a
Service Provider on such dates.

 

Notwithstanding the foregoing, 100% of the Shares subject to this Option will
fully vest and become exercisable upon a Change of Control.

 

Termination Period

 

This Option may be exercised for three (3) months after Optionee ceases to be a
Service Provider in accordance with Section 8 of this Agreement. Upon the death
or Disability of the Optionee, this Option may be exercised for one year after
the Optionee ceases to be a Service

 

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Provider in accordance with Sections 9 and 10 of this Agreement. In no event
will this Option be exercised later than the Term/Expiration Date provided
above.

 

II. AGREEMENT

 

1. Definitions. As used herein, the following definitions will apply:

 

(a) “Agreement” means this stock option agreement between the Company and
Optionee evidencing the terms and conditions of this Option.

 

(b) “Applicable Laws” means the requirements relating to the administration of
stock options 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 that may apply to this Option.

 

(c) “Board” means the Board of Directors of the Company or any committee of the
Board that has been designated by the Board to administer this Agreement.

 

(d) “Change of Control” means the occurrence of any of the following events:

 

(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power represented by
the Company’s then outstanding voting securities;

 

(2) the approval by the stockholders of the Company of a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets;

 

(3) 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 transactions described in subsections
(i), (ii), or (iii) or in connection with an actual or threatened proxy contest
relating to the election of directors of the Company; or

 

(4) the approval by stockholders of the Company of 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.

 

(e) “Code” means the Internal Revenue Code of 1986, as amended.

 

(f) “Common Stock” means the common stock of the Company.

 

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(g) “Company” means Applied Imaging Corp., a Delaware 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, including Officers and Directors, employed by
the Company or any Parent or Subsidiary of the Company. An Employee will not
cease to be such 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 will 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:

 

(1) 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
will be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system on the day of determination,
as reported in The Wall Street Journal or such other source as the Administrator
deems reliable;

 

(2) If the Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, its Fair Market Value will be the mean
between the high bid and low asked prices for the Common Stock on the day of
determination; or

 

(3) In the absence of an established market for the Common Stock, the Fair
Market Value thereof will be determined in good faith by the Board.

 

(n) “Nonstatutory Stock Option” means an Option 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, in Part I of this Agreement,
evidencing certain the terms and conditions of this Option grant. The Notice of
Grant is part of the Option 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 this stock option.

 

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(r) “Optioned Stock” means the Common Stock subject to this Option.

 

(s) “Optionee” means the person named in the Notice of Stock Option Grant or
such person’s successor.

 

(t) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

 

(u) “Service Provider” means an Employee, Director or Consultant.

 

(v) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 11 of this Agreement.

 

(w) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter
existing, as defined in Section 424(f) of the Code.

 

2. Grant of Option. The Board hereby grants to the Optionee named in the Notice
of Grant attached as Part I of this Agreement the Option to purchase the number
of Shares, as set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the “Exercise Price”), subject to the terms
and conditions of this Agreement.

 

3. Exercise of Option.

 

(a) Right to Exercise. This Option is exercisable during its term in accordance
with the Vesting Schedule set out in the Notice of Grant and the applicable
provisions of this Agreement.

 

(b) Method of Exercise. This Option is exercisable by delivery of an exercise
notice, in the form attached as Exhibit A (the “Exercise Notice”), which will
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company. The Exercise
Notice will be completed by the Optionee and delivered to the Human Resources
Specialist of the Company or such other person as the Company may designate. The
Exercise Notice will be accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares. This Option will be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied by
such aggregate Exercise Price.

 

(c) Legal Compliance. No Shares will be issued pursuant to the exercise of this
Option unless such issuance and exercise comply with Applicable Laws. Assuming
such compliance, for income tax purposes the Exercised Shares will be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

 

4. Method of Payment. Payment of the aggregate Exercise Price will be by any of
the following, or a combination thereof, at the election of the Optionee:

 

(a) cash or check; or,

 

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(b) with the Board’s consent, consideration received by the Company under a
cashless exercise program implemented by the Company.

 

5. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by the Optionee. The terms of
this Agreement will be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

 

6. Term of Option. This Option may be exercised only within the term set out in
the Notice of Grant, and may be exercised during such term only in accordance
with the terms of this Agreement.

 

7. Termination of Relationship as a Service Provider. If the Optionee ceases to
be a Service Provider (other than for death or Disability), this Option may be
exercised for a period of three (3) months after the date of such termination
(but in no event later than the expiration date of this Option as set forth in
the Notice of Grant) to the extent that the Option is vested on the date of such
termination. To the extent that the Optionee does not exercise this Option
within the time specified herein, the Option will terminate.

 

8. Disability of Optionee. If the Optionee ceases to be a Service Provider as a
result of the Optionee’s Disability, this Option may be exercised for a period
of twelve (12) months after the date of such termination (but in no event later
than the expiration date of this Option as set forth in the Notice of Grant) to
the extent that the Option is vested on the date of such termination. To the
extent that Optionee does not exercise this Option within the time specified
herein, the Option will terminate.

 

9. Death of Optionee. If the Optionee dies while a Service Provider, the Option
may be exercised at any time within twelve (12) months following the date of
death (but in no event later than the expiration date of this Option as set
forth in the Notice of Grant), by the Optionee’s estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option at the date of
death. If, after death, the Optionee’s estate or a person who acquired the right
to exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option will terminate.

 

10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.

 

(a) Adjustments. In the event that any dividend or other distribution (whether
in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Board, in order to
prevent diminution or enlargement of the benefits or potential benefits intended
to be made available under this Option, may (in its sole discretion) adjust the
number, class, and Exercise Price of Shares covered by this Option.

 

(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Board will notify Optionee as soon as
practicable prior to the effective date of such proposed transaction. To the
extent it has not been previously exercised, the Option will terminate
immediately prior to the consummation of such proposed.

 

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(c) Change of Control. In the event of a Change of Control, the Option will be
assumed or an equivalent option substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Option, the
Optionee will fully vest in and have the right to exercise the Option as to all
of the Optioned Stock, including Shares as to which it would not otherwise be
vested or exercisable. If the Option becomes fully vested and exercisable in
lieu of assumption or substitution in the event of a Change of Control, the
Board will notify the Optionee in writing or electronically that the Option will
be fully exercisable for a period of time determined by the Board, and the
Option will terminate upon the expiration of such period. For the purposes of
this paragraph, the Option will be considered assumed if, following the Change
of Control, the option confers the right to purchase or receive, for each Share
subject to the Option immediately prior to the Change of Control, the
consideration (whether stock, cash, or other securities or property) received in
the Change of Control 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 Change of Control is not solely common stock of the successor corporation
or its Parent, the Board may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share subject to the Option, 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 Change of Control.

 

11. Notices. Any notice to be given to the Company hereunder will be in writing
and will be addressed to the Company. at its then current principal executive
office or to such other address as the Company may hereafter designate to the
Optionee by notice as provided in this Section. Any notice to be given to the
Optionee hereunder will be addressed to the Optionee at the address set forth
beneath his signature hereto, or at such other address as the Optionee may
hereafter designate to the Company by notice as provided herein. A notice will
be deemed to have been duly given when personally delivered or mailed by
registered or certified mail to the party entitled to receive it.

 

12. Withholding Taxes. Optionee agrees to make appropriate arrangements with the
Company (or the Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all Federal, state, and local income and employment tax
withholding requirements applicable to the Option exercise. Optionee
acknowledges and agrees that the Company may refuse to honor the exercise and
refuse to deliver Shares if such withholding amounts are not delivered at the
time of exercise.

 

13. Entire Agreement; Governing Law. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee’s interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by the internal substantive
laws, but not the choice of law rules, of California.

 

14. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE
ACT OF BEING HIRED, BEING

 

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GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES
AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD,
FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT
ANY TIME, WITH OR WITHOUT CAUSE.

 

By Optionee’s signature and the signature of the Company’s representative below,
Optionee and the Company agree that this Option is granted under and governed by
the terms and conditions of this Agreement. Optionee has reviewed this Agreement
in its entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions relating to this Agreement.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.

 

OPTIONEE

     

APPLIED IMAGING CORP.

/s/ Robin Stracey

     

/s/ Barry Hotchkies

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Signature

     

By

Robin Stracey

     

CFO

Print Name

     

Title

         

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Residence Address

                 

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EXHIBIT 10.49

 

EXHIBIT A

 

APPLIED IMAGING CORP.

 

EXERCISE NOTICE

 

Applied Imaging Corp.

2380 Walsh Avenue

Santa Clara, CA, 95051

 

Attention:

 

1. Exercise of Option. Effective as of today,                     , 20    , the
undersigned (“Purchaser”) hereby elects to purchase                      shares
(the “Shares”) of the Common Stock of Applied Imaging Corp. (the “Company”)
under the option (the “Option”) represented by the Stock Option Agreement dated
[                    ] (the “Option Agreement”).

 

2. Delivery of Payment. Purchaser herewith delivers to the Company the full
purchase price for the Shares together with any required withholding taxes to be
paid in connection with the exercise of the Option.

 

3. Representations of Purchaser. Purchaser acknowledges that Purchaser has
received, read and understood the Option Agreement and agrees to abide by and be
bound by their terms and conditions.

 

4. Rights as Shareholder. 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 Shares, no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares so acquired will be
issued to the Purchaser as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date of issuance, except as provided in Section 11 of the Option
Agreement.

 

5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser’s purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted with any tax consultants
Purchaser deems advisable in connection with the purchase or disposition of the
Shares and that Purchaser is not relying on the Company for any tax advice.

 

6. Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this Exercise Notice will
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Exercise Notice will be
binding upon the Purchaser and his or her heirs, executors, administrators,
successors and assigns.

 

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7. Interpretation. Any dispute regarding the interpretation of this Exercise
Notice will be submitted by the Purchaser or by the Company forthwith to the
Board, which will review such dispute at its next regular meeting. The
resolution of such a dispute by the Board will be final and binding on all
parties.

 

8. Entire Agreement; Governing Law. The Option Agreement is incorporated herein
by reference together with any documents incorporated by reference therein. This
Agreement, and the Option Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Purchaser with
respect to the subject matter hereof, and may not be modified adversely to the
Purchaser’s interest except by means of a writing signed by the Company and
Purchaser. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of California.

 

Submitted by:

     

Accepted by:

OPTIONEE

     

APPLIED IMAGING CORP.

           

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Signature

                 

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Print Name

                 

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Address

     

Address

       

2380 Walsh Avenue

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Santa Clara, CA 95051

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Date Received:_____________________________________

 

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