Document:

EXHIBIT 10.2

 

 

 

 

TRANSGENOMIC,
INC. 2006 EQUITY INCENTIVE PLAN 

 

INCENTIVE
STOCK OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT
(this “Agreement”) is effective October 4, 2013 (the “Grant Date”) by and between Transgenomic, Inc., a
Delaware corporation (the “Company”) and Paul Kinnon (“Grantee”).

 

WHEREAS, the Company
sponsors and maintains the Transgenomic, Inc. 2006 Equity Incentive Plan (the “Plan”); and

 

WHEREAS, Grantee, as
an Eligible Person, has been selected to receive a grant of Incentive Stock Options under the Plan.

 

NOW, THEREFORE, the
Company and Grantee hereby agree as follows:

 

Section 1. General.
 This Agreement and the Incentive Stock Options granted hereunder are subject in all respects to the terms and conditions
of the Plan. Capitalized terms used in this Agreement without further definition shall have the same meanings given to such terms
in the Plan.

 

Section 2. Grant
of Options. The Company hereby awards to Grantee, as of the Grant Date, Incentive Stock Options (the “Options”)
equating to 2,150,000 shares of the Company’s common stock, $0.01 par value (the “Common Stock”). The
Options have an exercise price of $[●] per share (the “Exercise Price”), which is no less than 100% of the Fair
Market Value of a share of Common Stock on the Grant Date.

 

Section 3. Vesting
& Duration. Options may not be exercised until they are vested, and shall vest as follows: 716,666 Options shall vest on
the one-year anniversary of the Grant Date, with 59,722 Options vesting per month over the next 23 months and 59,728 Options vesting
on the three-year anniversary of the Grant Date, in each case provided that Grantee remains continuously employed with (or
is providing continued service to) the Company through the applicable vesting date, inclusive; and provided further that
if the Company terminates Grantee’s employment without Cause, or if Grantee terminates his employment with the Company for
Good Reason (each as defined under that certain Employment Agreement, effective October 1, 2013, by and between the Company and
Grantee (as may be amended or restated from time to time)) prior to the one-year anniversary of the Grant Date, a total of 716,666
Options shall be deemed automatically vested.

 

These Options shall be
exercised during such term only in accordance with the terms of the Plan.

 

Notwithstanding the
foregoing, Grantee’s Options will become 100% vested in the event of Grantee’s Termination of Service as a result of
Grantee’s Disability, death or Retirement, provided that Grantee has continuously served as a director, employee or
Advisor of the Company for the two-year period immediately preceding Grantee’s Termination of Service. Any fraction of a
share that becomes exercisable on any date will be rounded down to the next lowest whole number and any fraction of a share shall
be added to the portion of the Option becoming exercisable on the following vesting date.

 

    	1

    	 

    

 

 

Section 4. Term
of Options. The Options hereunder will expire ten years following the Grant Date. Notwithstanding the foregoing, Options
will terminate earlier as provided below.

 

(a)Termination
of Service. Upon Grantee’s Termination of Service by the election of the Company for any reason other than Grantee’s
death, Retirement or Disability (other than for Cause), Grantee may exercise an Option at any time within ninety days from Grantee’s
Termination of Service, but only to the extent that, as of the date of Grantee’s Termination of Service, Grantee’s
right to exercise the Options has vested and Grantee has not previously exercised the Options. Any Option unexercised following
such period shall be forfeited as of the expiration date of such period. Notwithstanding the foregoing, if Grantee suffers a Termination
of Service for Cause or the Termination of Service occurs by the election of Grantee (other than an election because of death,
Disability or Retirement), Grantee’s unexercised Options as of the date of his or her Termination of Service shall be cancelled
and forfeited as of such date.

 

(b)Death,
Retirement or Disability. Upon Grantee’s Termination of Service by reason of Grantee’s death, Retirement or
Disability, or if Grantee dies with exercise rights under Section 4(a) above, Grantee (or his or her beneficiary in the case of
death) may exercise the Options at any time within 12 months from Grantee’s Termination of Service, but only to the extent
that, at the date of Termination of Service, Grantee’s right to exercise the Options has vested and Grantee has not previously
exercised the Options. Any Options unexercised following such period shall be forfeited as of the expiration date of such period.

 

Section 5. Exercise
of Stock Options. Subject to the provisions hereof, including Section 3, this Option may be exercised in whole or in part
at any time, within the period permitted for the exercise thereof, with respect to whole shares only. To exercise this Option,
Grantee or the Successor of the Participant must give written notice of intent to exercise this Option with respect to a specified
number of shares delivered to the Company at its principal office and payment in full to the Company at said office of the amount
of the Exercise Price for the number of shares with respect to which this Option is being exercised. The Company will determine
the amount of any applicable taxes which require withholding as a result of the exercise, and Grantee must provide for such taxes
as required by Section 10 hereof and the Plan.

 

Section 6. Payment.
Payment of the Exercise Price shall be in cash; provided, however, the Compensation Committee, in its sole and absolute discretion,
may permit Grantee to pay for shares to be acquired by exercise under an Option in any combination of cash and the transfer and
delivery to the Company of stock of the Company having a Fair Market Value on the date of exercise of the Option at least equal
to the Exercise Price. Grantee shall also pay the amount of any Federal, state or local taxes required to be withheld at the time
of issuance of Common Stock hereunder. If no such taxes are required to be withheld at the time of such issuance, Grantee hereby
agrees to pay to the Company the amount of such taxes, if any, thereafter required to be withheld by the Company.

 

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Section 7. Issuance
of Shares. Following exercise of any portion of this Option, payment of any applicable taxes and satisfaction of any other
terms and conditions of this Agreement or the Plan, the Company will issue the number of shares of Common Stock purchased under
this Option. Grantee or the Successor of the Participant has no right or any privilege of a shareholder of the Company in respect
of any shares issuable on the exercise of this Option unless and until such shares have been recorded on the Company’s official
shareholder records as having been issued and transferred.

 

Section 8. Special
Rules of Incentive Stock Options. A grant of an Option hereunder shall be treated as an incentive stock option pursuant to
Section 422 of the Internal Revenue Code. Grantee acknowledges that the tax treatment of shares subject to an incentive stock
option or any events or transaction with respect thereto may be dependent upon various factors or events which are not determined
by the Plan or this Agreement. For example, shares acquired by Grantee by exercise of this Option within two years from the
date of this Agreement or one year from the date such Incentive Stock Option is exercised shall result in disqualification
of incentive stock option tax treatment. If an Incentive Stock Option fails to meet the requirements of Section 422 of the
Code, it shall automatically be redesignated as a Nonqualified Stock Option for federal income tax purposes. The Company makes
no representations with respect to and hereby disclaims all responsibility as to such tax treatment. Grantee should consult his
or her own tax advisor as to the tax treatment of an Incentive Stock Option.

 

Grantee further acknowledges
that an Incentive Stock Option will be deemed to be a Nonqualified Stock Option to the extent required by the $100,000 annual limitation
under Internal Revenue Code Section 422(d) and Section 7.4(a) of the Plan.

 

Section 9. Nontransferability
of Options. Except as the Company and Grantee may agree in accordance with Section 6.3 of the Plan,
the Options may not be sold, pledged, assigned, hypothecated, transferred or disposed of by Grantee in any manner other
than by will or the laws of descent and distribution. No transfer of an Option by will or the laws of descent and distribution
shall be effective to bind the Company unless the Company is furnished with written notice thereof and appropriate documentation
evidencing the rights of any successor(s) of the Participant as the Compensation Committee deems necessary or desirable.

 

Section 10. Tax
Treatment. By executing this Agreement, Grantee authorizes the Company to withhold, or Grantee agrees to pay to the Company,
the full amount of all Federal, state and local taxes (including, but not limited to income, employment, FICA and/or Medicare taxes)
applicable to any taxable income resulting from the exercise of rights pursuant to this Agreement and as permitted by Section 12.8
of the Plan.

 

Grantee acknowledges
and accepts that exercise of Options hereunder may result in application of the Alternate Minimum Tax and that estate and/or other
taxes may apply with respect to Options hereunder in the event of Grantee’s death. Grantee understands that he or she should
seek his or her own tax advice regarding this Option and any rights hereunder.

 

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Section 11. Miscellaneous
Provisions.

 

(a)No
Retention Rights. Nothing in this Agreement shall confer upon Grantee any right to continue in the employment or service
of the Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company
or of Grantee, which rights are hereby expressly reserved by each, to terminate his or her employment or service at any time and
for any reason, with or without cause.

 

(b)Antidilution.
In the event that any change in the outstanding shares of Common Stock of the Company (including an exchange of Common Stock for
stock or other securities of another corporation) occurs by reason of a Common Stock dividend or split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate changes, other than for consideration received by the
Company therefore, the number of shares of stock granted hereunder or the Exercise Price may be appropriately adjusted by the Compensation
Committee in its sole and absolute discretion, whose determination shall be conclusive, final and binding; provided, however that
fractional shares shall be rounded to the nearest whole share. In the event of any other change in the Common Stock, the Compensation
Committee shall in its sole discretion determine whether such change equitably requires a change in the number or type of shares
of stock granted hereunder or the Exercise Price and any adjustment made by the Compensation Committee shall be conclusive, final
and binding.

 

(c)Determination
of Value. The Company makes no representation as to the value of this Option or whether Grantee will be able to realize
any profit from it.

 

(d)Plan.
The provisions of the Plan are incorporated by reference into these terms and conditions. To the extent any provision of this Agreement
conflicts with the Plan, the terms of the Plan shall govern. Grantee acknowledges receipt of a copy of the Plan and represents
that he or she has reviewed the Plan and is familiar with the terms and provisions thereof. Grantee hereby accepts this Agreement
and the terms of the Plan.

 

(e)Notices.
Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery,
upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or upon deposit
with a reputable overnight courier. Notice shall be addressed to the Company at its principal executive office and to Grantee at
the address most recently provided by Grantee to the Company.

 

(f)Blackout
Periods. In connection with certain corporate events, the Company reserves the right to designate periods during which
Grantee may not exercise this Option.

 

(g)Entire
Agreement; Amendments. This Agreement constitutes the entire contract between the parties hereto with regard to the subject
matter hereof. This Agreement supersedes any other agreements, representations or understandings (whether oral or written and whether
express or implied) which relate to the subject matter hereof. The Compensation Committee shall have authority, subject to the
express provisions of the Plan, to interpret this Agreement and the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, to modify the terms and provisions of this Agreement, and to make all other determinations in the judgment
of the Compensation Committee necessary or desirable for the administration of the Plan. The Compensation Committee may correct
any defect or supply any omission or reconcile any inconsistency in the Plan or in this Agreement in the manner and to the extent
it shall deem necessary or desirable to carry it into effect. All action by the Compensation Committee under the provisions of
this paragraph shall be final, conclusive and binding for all purposes.

 

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(h)Change
in Control. Unless provided otherwise in connection with the transaction resulting in the Change in Control, immediately
preceding the occurrence of a Change in Control of the Company, Unvested Stock Options shall immediately vest in full and to the
extent not expired or previously exercised become immediately exercisable.

 

(i)Choice
of Law.  This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State, without giving
effect to the choice of law provisions thereof.

 

(j)Successors.
This Agreement is personal to Grantee and, except as otherwise provided above, shall not be assignable by Grantee otherwise than
by will or the laws of descent and distribution, without the written consent of the Company. This Agreement shall inure to the
benefit of and be enforceable by Grantee’s legal representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors. It shall not be assignable by the Company except in connection with the sale or other disposition
of all or substantially all the assets or business of the Company.

 

(k)Severability.
If any provision of this Agreement for any reason should be found by any court of competent jurisdiction to be invalid, illegal
or unenforceable, in whole or in part, such declaration shall not affect the validity, legality or enforceability of any remaining
provision or portion hereof, which remaining provision or portion hereof shall remain in full force and effect as if this Agreement
had been adopted with the invalid, illegal or unenforceable provision or portion hereof eliminated.

 

(l)Headings.
The headings and captions in this Agreement shall not be construed to limit or modify the terms or meaning of this Agreement.

 

 

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This Agreement is executed
by the Company and Grantee as of the date and year first written above.

 

	Transgenomic, INC.
	 
	 
	By:	 
	Name:	Rodney S. Markin, M.D., Ph.D.
	Title:	Chairman of the Board of Directors
	 
	GRANTEE
	 
	 
	 
	Paul Kinnon

	 	 	 
	 
	 	 

 

    	6EXHIBIT 10.3

 

 

 

 

TRANSGENOMIC,
INC. 2006 EQUITY INCENTIVE PLAN 

 

STOCK
APPRECIATION RIGHTS AGREEMENT 

 

 

THIS STOCK APPRECIATION
RIGHTS AGREEMENT (this “Agreement”) is effective October 4, 2013 (the “Grant Date”)
by and between Transgenomic, Inc., a Delaware corporation (the “Company”) and Paul Kinnon (“Grantee”).

 

WHEREAS, the Company
sponsors and maintains the Transgenomic, Inc. 2006 Equity Incentive Plan, a copy of which is attached hereto as Exhibit
A (the “Plan”); and

 

WHEREAS, Grantee,
as an Eligible Person, has been selected to receive a grant of Stock Appreciation Rights under the Plan.

 

NOW, THEREFORE, the
Company and Grantee hereby agree as follows:

 

Section 1. General.
This Agreement and the Stock Appreciation Rights granted hereunder are subject in all respects to the terms and conditions of the
Plan. Capitalized terms used in this Agreement without further definition shall have the same meanings given to such terms in the
Plan. The award of Stock Appreciation Rights of the Company described herein (this “Award”) is conditioned
on Grantee’s execution of the Award within ten (10) days after the Grant Date.

 

Section 2. Grant
of Stock Appreciation Rights. The Company hereby awards to Grantee, as of the Grant Date, Stock Appreciation Rights with the
following terms:

 

	Grant Date	October 4, 2013
	Vesting Commencement Date	October 4, 2013
	Number of Shares measuring the value of the Award	1,000,000 Shares (the “SAR Shares”)
	Exercise Price per SAR Share	$[_____._____]
    per Share (the “Exercise Price”)

 

    	 

    	 

    

 

	Vesting Schedule	
        340,000 of the SAR Shares
        shall vest on the one-year anniversary of the Vesting Commencement Date, with 27,500 of the SAR Shares vesting per month over the
        remaining 24 months, in each case provided that Grantee remains continuously employed with (or is providing continued service
        to) the Company through the applicable vesting date, inclusive; and provided further that if the Company terminates Grantee’s
        employment without Cause, or if Grantee terminates his employment with the Company for Good Reason (each as defined under that
        certain Employment Agreement, effective October 1, 2013, by and between the Company and Grantee (as may be amended or restated
        from time to time)) prior to the one-year anniversary of the Vesting Commencement Date, a total of 340,000 of the SAR Shares shall
        be deemed automatically vested.

         

        Notwithstanding the foregoing,
        Grantee’s SAR Shares will become 100% vested upon the earlier to occur of: (i) Grantee’s Termination of Service as
        a result of Grantee’s Disability, death or Retirement; provided that Grantee has continuously served as a director,
        employee or Advisor of the Company for the two-year period immediately preceding Grantee’s Termination of Service; and (ii)
        as of immediately prior to, and contingent upon, a Qualified Change in Control; provided that Grantee remains continuously
        employed with (or is providing continued service to) the Company through immediately prior to the effectiveness of such Qualified
        Change in Control.

         

        For purposes of this
        Award, a “Qualified Change in Control” means a Change in Control whereby (i) the acquiring party (or
        parties) in such Change in Control offers cash, in whole or in part, to some or all of the Company’s stockholders as consideration
        for the shares of capital stock of the Company held thereby, and (ii) the Fair Market Value as of the last trading day immediately
        preceding the Change in Control or the aggregate per share price payable by the acquiring party in such Change in Control for the
        Common Stock is greater than the Exercise Price.

         

        Any fraction of a share
        that becomes exercisable on any date will be rounded down to the next lowest whole number and any fraction of a share shall be
        added to the portion of the SAR Shares becoming exercisable on the following vesting date.

         

	Expiration Date	October 4, 2023, subject to Section 6.

 

    	- 2 -

    	 

    

Section 3. Adjustments
to Number of SAR Shares and Exercise Price. No shares of Common Stock will be issued and no cash will be paid to Grantee before
the Award vests in accordance with the “Vesting Schedule” noted in Section 2 and is exercised. The amount Grantee receives
upon exercise will equal the product of:

 

		(a)	the number of SAR Shares that Grantee designates for exercise, and

 

		(b)	the excess of 100% of the Fair Market Value of one share of Common Stock on the date of exercise
over the Exercise Price stated in Section 2.

 

Section 4.
 Form of Payments to Grantee. Except with respect to an Automatic Exercise (as defined below), the Company will make any
payment to Grantee under the Award, as determined by the Board or the Committee following the exercise, in the form of cash, net
of any applicable tax withholding obligations or shares of Common Stock, with cash paid in lieu of fractional shares of Common
Stock, based on the Fair Market Value on the date of exercise. Any shares of Common Stock that Grantee receives will be free from
vesting restrictions (but subject to such legends as the Company determines to be appropriate). Notwithstanding the foregoing,
the Company will not issue certificates representing shares of Common Stock issuable upon the exercise of the Award to Grantee
unless Grantee has made arrangements satisfactory to the Board or the Committee to satisfy any applicable tax withholding obligations.
Grantee may satisfy minimum withholding requirements through the surrender of shares of Common Stock that are both subject to the
Award and that have a Fair Market Value equal to the minimum statutory tax withholding associated with the shares of Common Stock
giving rise to the taxable income. Grantee or the Successor of the Participant has no right or any privilege of a stockholder of
the Company in respect of any shares issuable on the exercise of the award unless and until such shares have been recorded on the
Company’s official stockholder records as having been issued and transferred.

 

Section 5. Automatic
Exercise. Notwithstanding anything herein to the contrary, this Award shall be deemed automatically exercised in full, without
any further action on the part of Grantee or the Company, effective as of immediately prior to, and contingent upon, a Qualified
Change in Control; provided that Grantee has remained continuously employed with (or has provided continued service to)
the Company from the Grant Date through immediately prior to the effectiveness of such Qualified Change in Control (an “Automatic
Exercise”). In the event of such Automatic Exercise, the Company will make a payment to Grantee under the Award in
the form of cash, net of any applicable tax withholding obligations.

 

Section 6. Failure
of Vesting Restrictions. By executing this Agreement, Grantee acknowledges and agrees that the Award will terminate
prior to the Expiration Date as provided below:

 

(a)Termination
of Service. Upon Grantee’s Termination of Service by the election of the Company for any reason other than Grantee’s
death, Retirement or Disability (other than for Cause), Grantee may exercise the Award at any time within three months from Grantee’s
Termination of Service, but only to the extent that, as of the date of Grantee’s Termination of Service, Grantee’s
right to exercise the Award has vested and Grantee has not previously exercised the Award. Any portion of the Award unexercised
following such period shall be forfeited as of the expiration date of such period. Notwithstanding the foregoing, if Grantee suffers
a Termination of Service for Cause or the Termination of Service occurs by the election of Grantee (other than an election because
of death, Retirement or Disability), Grantee’s unexercised Award as of the date of his or her Termination of Service shall
be cancelled and forfeited as of such date.

 

    	- 3 -

    	 

    

(b)Death,
Retirement or Disability. Upon Grantee’s Termination of Service by reason of Grantee’s death, Retirement or
Disability, or if Grantee dies with exercise rights under Section 6(a), Grantee (or his or her beneficiary in the case of death)
may exercise the Award at any time within 12 months from Grantee’s Termination of Service, but only to the extent that, at
the date of Termination of Service, Grantee’s right to exercise the Award has vested and Grantee has not previously exercised
the Award. Any portion of the Award unexercised following such period shall be forfeited as of the expiration date of such period.

 

Section 7. Exercise.
Subject to the provisions hereof, including Section 2 and Section 5, the Award may be exercised in whole or in part at
any time, within the period permitted for the exercise thereof, with respect to whole shares only. To exercise the Award, other
than pursuant to an Automatic Exercise, Grantee or the Successor of the Participant must deliver a Notice of Exercise in the form
attached hereto as Exhibit B (the
“Notice of Exercise”) to the Company at its principal office together with such additional documents
as the Company may then require. The Company will determine the amount of any applicable taxes which require withholding as a result
of the exercise, and Grantee must provide for such taxes as required by Section 9 and the Plan.

 

Section 8. Nontransferability
of Award. Except as the Company and Grantee may agree in accordance with Section 6.3 of the Plan,
the Award may not be sold, pledged, assigned, hypothecated, transferred or disposed of by Grantee in any manner other than
by will or the laws of descent and distribution. No transfer of any portion of the Award by will or the laws of descent and distribution
shall be effective to bind the Company unless the Company is furnished with written notice thereof and appropriate documentation
evidencing the rights of any Successor(s) of the Participant as the Committee deems necessary or desirable.

 

Section 9. Withholding
Obligations.

 

(a)At
the time Grantee exercises the Award, or this Award is otherwise deemed exercised pursuant to an Automatic Exercise, in either
case, in whole or in part, or at any time thereafter as requested by the Company, Grantee hereby authorizes withholding from payroll
and any other amounts payable to Grantee, and otherwise agree to make adequate provision for, any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection
with the exercise of the Award. By exercising the Award, Grantee agrees that, as a condition to any exercise of the Award, the
Company may require Grantee to enter into an arrangement providing for the payment by Grantee to the Company of any tax withholding
obligation of the Company arising by reason of the exercise of the Award.

 

    	- 4 -

    	 

    

 

(b)Upon
Grantee’s request and subject to approval by the Company, in its sole discretion, and compliance with any applicable legal
conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to Grantee upon
the exercise of the Award a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be
necessary to avoid variable award accounting). If the date of determination of any tax withholding obligation is deferred to a
date later than the date of exercise of the Award, share withholding pursuant to the preceding sentence shall not be permitted
unless Grantee makes a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares
of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination
of such tax withholding obligation to the date of exercise of the Award. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of the Award
that are otherwise issuable to Grantee upon such exercise. Any adverse consequences to Grantee arising in connection with such
share withholding procedure shall be Grantee’s sole responsibility.

 

(c)Grantee
may not exercise the Award unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly,
Grantee may not be able to exercise the Award when desired even though the Award is vested, and the Company shall have no obligation
to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein
unless such obligations are satisfied.

 

Section 10. Miscellaneous
Provisions.

 

(a)No
Retention Rights. Nothing in this Agreement shall confer upon Grantee any right to continue in the employment or service
of the Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company
or of Grantee, which rights are hereby expressly reserved by each, to terminate his or her employment or service at any time and
for any reason, with or without cause.

 

(b)Antidilution.
In the event that any change in the outstanding shares of Common Stock of the Company (including an exchange of Common Stock for
stock or other securities of another corporation) occurs by reason of a Common Stock dividend or split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate changes, other than for consideration received by the
Company therefore, the number of shares of stock granted hereunder or the Exercise Price may be appropriately adjusted by the Committee
in its sole and absolute discretion, whose determination shall be conclusive, final and binding; provided, however
that fractional shares shall be rounded to the nearest whole share. In the event of any other change in the Common Stock, the Committee
shall in its sole discretion determine whether such change equitably requires a change in the number or type of shares of stock
granted hereunder or the Exercise Price and any adjustment made by the Committee shall be conclusive, final and binding.

 

    	- 5 -

    	 

    

 

(c)Determination
of Value. The Company makes no representation as to the value of the Award or whether Grantee will be able to realize any
profit from it.

 

(d)Plan.
The provisions of the Plan are incorporated by reference into these terms and conditions. To the extent any provision of this Agreement
conflicts with the Plan, the terms of the Plan shall govern. Grantee acknowledges receipt of a copy of the Plan and represents
that he has reviewed the Plan and is familiar with the terms and provisions thereof. Grantee hereby accepts this Agreement and
the terms of the Plan.

 

(e)Notices.
Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery,
upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or upon deposit
with a reputable overnight courier. Notice shall be addressed to the Company at its principal executive office and to Grantee at
the address most recently provided by Grantee to the Company.

 

(f)Blackout
Periods. In connection with certain corporate events, the Company reserves the right to designate periods during which
Grantee may not exercise the Award; provided that no such blackout period shall limit or delay an Automatic Exercise, as
provided under Section 5.

 

(g)Entire
Agreement; Amendments. This Agreement constitutes the entire contract between the parties hereto with regard to the subject
matter hereof. This Agreement supersedes any other agreements, representations or understandings (whether oral or written and whether
express or implied) which relate to the subject matter hereof. The Committee shall have authority, subject to the express provisions
of the Plan, to interpret this Agreement and the Plan, to establish, amend and rescind any rules and regulations relating to the
Plan, to modify the terms and provisions of this Agreement, and to make all other determinations in the judgment of the Committee
necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in this Agreement in the manner and to the extent it shall deem necessary or desirable to carry
it into effect. All action by the Committee under the provisions of this paragraph shall be final, conclusive and binding for all
purposes.

 

(h)Change
in Control. Unless provided otherwise in connection with the transaction resulting in the Change in Control, immediately
preceding the occurrence of a Change in Control of the Company, any unvested portion of the Award shall immediately vest in full
and to the extent not expired or previously exercised become immediately exercisable.

 

(i)Choice
of Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State, without giving
effect to the choice of law provisions thereof.

 

    	- 6 -

    	 

    

 

(j)Successors.
This Agreement is personal to Grantee and, except as otherwise provided above, shall not be assignable by Grantee otherwise than
by will or the laws of descent and distribution, without the written consent of the Company. This Agreement shall inure to the
benefit of and be enforceable by Grantee’s legal representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors. It shall not be assignable by the Company except in connection with the sale or other disposition
of all or substantially all the assets or business of the Company.

 

(k)Severability.
If any provision of this Agreement for any reason should be found by any court of competent jurisdiction to be invalid, illegal
or unenforceable, in whole or in part, such declaration shall not affect the validity, legality or enforceability of any remaining
provision or portion hereof, which remaining provision or portion hereof shall remain in full force and effect as if this Agreement
had been adopted with the invalid, illegal or unenforceable provision or portion hereof eliminated.

 

(l)Headings.
The headings and captions in this Agreement shall not be construed to limit or modify the terms or meaning of this Agreement.

 

[Remainder
of Page Intentionally Left Blank]

 

    	- 7 -

    	 

    

BY GRANTEE’S
SIGNATURE BELOW, along with the signature of the Company’s representative, Grantee and the Company agree that the Stock Appreciation
Rights are awarded under and governed by the terms and conditions of this Agreement, the Plan and, in the event of exercise of
the Award, the Notice of Exercise.

 

 

	Transgenomic, INC.
	 
	 
	By:	 
	 
	Name:	Rodney S. Markin, M.D., Ph.D.
	 
	Title:	Chairman of the Board of Directors
	 
	GRANTEE
	The undersigned Grantee hereby accepts the terms of this Agreement, the Plan and, in the event of exercise of the Award, the Notice of Exercise.
	By:	 	 
	 
	Name of Grantee:	Paul Kinnon

  

 

 

 

[Signature
Page to Stock Appreciation Rights Agreement]

    	 

    	 

    

Exhibit
A

 

TRANSGENOMIC, INC.

 

2006
Equity Incentive Plan

 

 

 

 

 

 

 

 

A-1

    	 

    	 

    

Exhibit
B

 

TRANSGENOMIC, INC.

 

STOCK
APPRECIATION RIGHTS

 

NOTICE
OF EXERCISE

 

 

 

Transgenomic, Inc.

12325 Emmet Street

Omaha, Nebraska 68164

 

	 	Date of Exercise: _______________

 

Ladies and Gentlemen:

 

This constitutes notice
under my Stock Appreciation Rights Agreement with Transgenomic, Inc., a Delaware corporation (the “Company”),
identified below that I elect to exercise my Stock Appreciation Rights with respect to the number of shares set forth below.

 

	Grant Date of Stock Appreciation Rights Agreement:	 	October 4, 2013    
	Number of shares as

to which SAR is

exercised:	 	___________________________
	[Certificates to be

issued in name of:	 	___________________________]

 

By this exercise, I
agree (i) to provide such additional documents as the Company may require pursuant to the terms of the Transgenomic, Inc.
2006 Equity Incentive Plan (the “Plan”), and (ii) that the Company will satisfy its obligations
arising from this exercise notice through withholding a portion of the cash payment payable hereunder equal to the amount of such
obligations and/or issuing shares of common stock of the Company (net of shares of common stock of the Company having a Fair Market
Value (as defined in the Plan) equal to the minimum statutory taxes and withholding due; except to the extent the undersigned pays
cash herewith to settle such obligations).

 

	Very truly yours,
	By:	 	 
	 
	Name:	Paul Kinnon
	 

 

 

 

 

B-1

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