Document:

Exhibit 10.2 Daley Stock Option Agreement

CELLULAR DYNAMICS INTERNATIONAL, INC. 
STOCK OPTION AGREEMENT
This Option Agreement, entered into as of July 10, 2014 (the “Date of Grant”), is between Cellular Dynamics International, Inc., a Wisconsin corporation (the “Company”), and Timothy D. Daley (the “Participant”).  All terms used herein and not otherwise defined shall have the same meaning as set forth in the Company’s 2013 Equity Incentive Plan (the “Plan”).
WITNESSETH:

WHEREAS, the Board of Directors of the Company (the “Board”) desires to induce the Participant to provide services to the Company as its Interim Chief Financial Officer following the resignation of David S. Snyder as the Company’s Chief Financial Officer, to provide the Participant with a stronger incentive to strive for a successful completion of Participant’s tenure as Interim Chief Financial Officer of the Company and a successful transition of his duties and responsibilities to a successor Chief Financial Officer, as well as to strive for the continued success and growth of the Company during his tenure as Interim Chief Financial Officer and to further align the Participant’s interests with those of the Company’s shareholders.
NOW THEREFORE, in consideration of the benefits that the Company expects to be derived in connection with the services to be hereinafter rendered by the Participant, the Company and the Participant hereby agree as follows:
ARTICLE I
Award of Option
1.1.    Option; Number of Shares; Option Price.  The Participant is granted the right and option to purchase (the “Option”) all or any part of an aggregate of 18,000 shares of Common Stock (individually, a “Share” and jointly, the “Shares”) at the purchase price of $12.13 per Share (the “Option Price”).  
1.2.    Vesting.  The vesting schedule for the Shares governed by this Option is as follows.  Except as otherwise provided in the Plan and this Section 1.2, the Option will vest as to 100% of shares upon the successful completion of Participant’s tenure as Interim Chief Financial Officer of the Company which shall be deemed to occur only if and when the Company has timely filed with the Securities and Exchange Commission each of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2014, the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2014, and the Company’s annual report on Form 10-K for the year ended December 31, 2014, provided that the Participant is still in the employ of the Company on each such filing date.  Notwithstanding the foregoing, the Option may, at the Committee’s discretion, become vested in full or in part as the Committee may determine following (a) the successful completion in part of Participant’s tenure as Interim Chief Financial Officer and/or (b) the Company’s hiring of, and transition of the Interim Chief Financial Officer’s duties and responsibilities to, a successor Chief Financial Officer to Mr. 

Snyder prior to the successful completion of Participant’s tenure as Interim Chief Financial Officer.  Any exercise by the Committee of such discretion to vest any portion of the Option shall be confirmed by written notice thereof given by or at the direction of the Committee.  Further notwithstanding the foregoing, the Option will become fully vested upon the first to occur of (a) the Participant’s death while in the employ of the Company or (b) the termination of the Participant’s employment due to Disability.  In the event of a Change in Control, the Option will be subject to the provisions set forth in Paragraph 17 of the Plan.  Capitalized terms used in this paragraph to have the meanings assigned to them in the Participant’s option agreement or, if not defined in such agreement, in the Plan
1.3.    Exercisability of Option. 
(a)    This Option (or any portion thereof) shall become exercisable at the time and to the extent which the underlying Shares are vested in accordance with Section 1.2 above, and shall expire in accordance with this Section 1.3 and the Plan, but in all events, and notwithstanding anything herein to the contrary, the Option shall expire no later than on the tenth anniversary of the Date of Grant.  
(b)    Except as otherwise provided in paragraphs (c) through (e) of this Section 1.3, if the employment of the Participant terminates, the Option, to the extent not exercised, shall terminate one hundred eighty (180) days after termination of employment with the Company.  In the event that the Participant changes his employment status with the Company, but continues to render services to the Company (e.g. changes from employee status to consultant status), such change in status shall constitute a termination of employment.
(c)    If the Participant’s termination of employment with the Company is for Cause, the Option may not be exercised and all of the Participant’s rights in the Option shall be forfeited upon such termination of employment.  
(d)    If the Participant’s termination of employment is due to Disability, the Option, to the extent not exercised, shall terminate one (1) year after the date of termination.
        
(e)    If termination of employment results from the death of the Participant, the personal representative of the Participant’s estate, or a person who by bequest, inheritance, or otherwise by reason of the Participant’s death acquired the right to exercise the Option, may exercise any Option at any time within one (1) year after the death of the Participant.  
1.4.    Method of Exercising Option. The Option may be exercised in whole or in part by delivery to the Company, at its offices in Madison, Wisconsin, of (a) written notice identifying the Option and stating the number of Shares with respect to which it is being exercised, in the form attached hereto as Exhibit A, (b) payment in full of the Option Price of the Shares then 

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being acquired in the form permitted by Paragraph 8(f) of the Plan and (c) payment in full of any necessary withholding taxes associated with the exercise (except where the Participant has made other arrangements with the Company to satisfy the necessary withholding taxes).  If the Company has established alternative procedures for the exercise of the Option at the time of exercise, such alternative procedures may also be used to exercise the Option.  The Company shall have the right to delay the issue or delivery of any Shares to be delivered hereunder until (i) the completion of such registration or qualification of such Shares under any federal, state or foreign law, ruling or regulation as the Company shall deem to be necessary or advisable, and (ii) receipt from the Participant of such documents and information as the Company may deem necessary or appropriate in connection with such registration or qualification or the issuance of Shares hereunder.
1.5.    Prohibitions Against Transfer.  The Option, and the rights and privileges conferred hereby, may not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) by the Participant, or be subject to execution, attachment or similar process, and shall be exercisable only by the Participant, except as provided in Paragraph 8(i) of the Plan.
1.6.    Nonstatutory Stock Option Treatment. It is intended that the Option shall not qualify as an incentive stock option pursuant to Section 422 of the Code.
ARTICLE II
Miscellaneous
2.1.    Provisions of the Plan Control.  This Option Agreement shall be governed by the provisions of the Plan, the terms and conditions of which are incorporated herein by reference.  In the event that the provisions of this Option Agreement and the Plan conflict, the Plan shall control.  The Plan empowers the Committee to make interpretations, rules and regulations thereunder, and, in general, provides that determinations of the Committee with respect to the Plan shall be binding upon the Participant.  A copy of the Plan has been delivered to the Participant in connection with the execution and delivery of this Option Agreement and an additional copy thereof will be delivered to the Participant upon reasonable request.
2.2.    Additional Shares.  Notwithstanding any term or implication herein to the contrary, the term “Shares” shall be deemed to include, and the provisions of this Option Agreement shall apply with respect to, any new, substituted or additional shares of stock, other securities or property that may be acquired upon exercise of this Option in accordance with an adjustment thereto made pursuant to Paragraph 14 of the Plan.  For purposes of clarification, in the case of such an adjustment or such a stock dividend, stock split, recapitalization or other change, such new, substituted or additional stock or other securities or property shall be subject to and be vested or will vest in accordance with the vesting schedule set forth in Section 1.2 to the same extent as this Option.
2.3.    Taxes.  The Company may require payment or reimbursement of or may withhold any tax that it believes is required as a result of the exercise of the Option or issuance of shares, 

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and the Company may defer making delivery of the Shares until arrangements satisfactory to the Company have been made with respect to such withholding obligations.
2.4.    Notices.  Any notice to be given to the Company under the terms of this Option Agreement shall be given in writing to the Company in care of its then principal executive officer at its then principal place of business.  Any notice to be given to the Participant may be addressed to him at his address as it appears on the payroll or other records of the Company or any affiliate thereof.  Any such notice will be deemed to have been duly given:  (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt at the Participant’s or the Company’s address.
2.5.    Entire Agreement; Amendments.  This Option Agreement (including the Plan, which is incorporated herein pursuant to Section 2.1) and the agreements and documents executed and delivered hereunder constitute a complete statement of all of the arrangements between the parties as of the date hereof with respect to the transactions contemplated hereby, and thereby supersedes all prior agreements and understandings between them with respect thereto and cannot be changed or terminated orally.  This Option Agreement may be amended as set forth in the Plan and as set forth in the written agreement of the Participant and the Company.
2.6.    Governing Law.  This Option Agreement and all questions arising hereunder or in connection herewith shall be determined in accordance with the laws of the State of Wisconsin, without giving effect to the laws of any other jurisdiction that otherwise would govern under the principles of conflicts of laws thereof.  THE PARTIES VOLUNTARILY AND KNOWINGLY WAIVE ANY RIGHT THEY HAVE TO A JURY TRIAL PURSUANT TO ANY COURT ACTION BY EITHER THE COMPANY OR THE PARTICIPANT.
2.7.    No Employment Rights.  This Option Agreement shall not confer upon the Participant any right with respect to continuation of employment by the Company, nor shall it interfere in any way with the right of the Company to terminate the Participant’s employment at any time.
2.8.    Multiple Copies.  One or more copies of this Option Agreement may be executed, each of which will be deemed an original, but all of which together will constitute one and the same agreement.

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IN WITNESS WHEREOF, the Company has caused this Option Agreement to be executed as of the date and year first written above, which is the date of the granting of the Option evidenced hereby.
CELLULAR DYNAMICS INTERNATIONAL, INC.

By:    /s/ Thomas M. Palay
Thomas M. Palay, Vice Chairman of the Board of Directors and President
The undersigned Participant hereby accepts the foregoing Option and agrees to the several terms and conditions hereof and of the Plan.
Participant:

/s/ Timothy D. Daley
Timothy D. Daley

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EXHIBIT A

CELLULAR DYNAMICS INTERNATIONAL, INC.
2013 EQUITY INCENTIVE PLAN

EXERCISE NOTICE
1.    Exercise of Option.  Effective as of today, _____________________, 20__, the undersigned (the “Participant”) hereby elects to exercise the Participant’s option to purchase ___________ shares of Common Stock (the “Shares”) of Cellular Dynamics International, Inc. (the “Company”) under and pursuant to the Company’s 2013 Equity Incentive Plan (the “Plan”), and the Option Agreement dated as of July 10, 2014 (the “Option Agreement”).  All terms used herein and not otherwise defined shall have the meaning set forth in the Plan or the Option Agreement.
2.    Representations of the Participant.  The Participant acknowledges that the Participant has received, read and understands the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.  
3.    Rights as Shareholder.  Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a Shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised, subject to the terms of the Option Agreement.
4.    Delivery of Payment.  The Participant delivers to the Company with this Exercise Notice payment of the Option Price for the Shares.
5.    Interpretation.  Any dispute regarding the interpretation of this Exercise Notice shall be submitted by the Participant or by the Company forthwith to the Committee, which shall review such dispute at its next regular meeting.  The resolution of such a dispute by the Committee shall be final and binding on all persons.
6.    Governing Law; Severability.  This Exercise Notice shall be governed by and construed in accordance with the laws of the State of Wisconsin, without giving effect to the laws of any other jurisdiction that otherwise would govern under the principles of conflicts of laws thereof.  Should any provision of this Exercise Notice be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.
7.    Further Instruments.  The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this agreement.

	
		
	Participant:
	Accepted by:

	 
	CELLULAR DYNAMICS INTERNATIONAL, INC.

	 
	

	____________________________________
Print name:___________________________
	By:____________________________________
Its: ____________________________________

 

A-2EMPLOYMENT AGREEMENT

EXHIBIT 10.4

EMPLOYMENT AGREEMENT

This Employment Agreement (this "Agreement") is made effective as of February 15, 2013 (the “Effective Date”), by and between IGSM Group Inc.  or successor company (”IGSM” or “the Company”), of East 2929 Commercial Blvd, Suite PH-D, Fort Lauderdale, Florida, 33308 and John Marino JR.(“Executive” or “Employee”) of IGSM is engaged in the business of a railroad management company acquiring and providing consulting services to short line railroad and railroad-related service companies. 

A.

IGSM desires to have the services of Executive. 

B.

Executive is willing to be employed by IGSM. 

  Therefore, the parties agree as follows: 

1. EMPLOYMENT. IGSM shall employ Executive as Cheif Executive Officer. Executive shall provide to IGSM the following services: duties as needed. Executive accepts and agrees to such employment, and agrees to be subject to the general supervision, advice and direction of IGSM and IGSM's supervisory personnel. Executive shall also perform (i) such other duties as are customarily performed by an employee in a similar position, and (ii) such other related services and duties as may be assigned to Executive from time to time by IGSM. 

2. BEST EFFORTS OF EMPLOYEE. Executive agrees to perform faithfully, industriously, and to the best of Executive's ability, experience, and talents, all of the duties that may be required by the express and implicit terms of this Agreement. Such duties shall be provided at such place(s) as the needs, business, or opportunities of IGSM may require from time to time. 

3. COMPENSATION OF EMPLOYEE.  As compensation for the services provided by Executive under this Agreement, IGSM will:

a)

Pay Executive $7,000.00 per month commencing on the Effective Date. This amount shall be paid semi-monthly on the first day and the fifteenth day of the month. Upon termination of this Agreement, payments under this paragraph shall cease; provided, however, that Executive shall be entitled to payments for periods or partial periods that occurred prior to the date of termination and for which Executive has not yet been paid, and for any payments earned in accordance with IGSM's customary procedures, if applicable. Accrued vacation will be paid in accordance with state law and IGSM's customary procedures. This section of the Agreement is included only for accounting and payroll purposes and should not be construed as establishing a minimum or definite term of employment.

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b)

pay Executive $3,000.00 per month in deferred compensation, commencing on the Effective Date. This amount shall be paid in a lump sum ($36,000.00) on the one-year anniversary of the Effective Date, provided Executive is an employee of IGSM. If Executive is terminated without Cause (as defined below) by IGSM, Executive shall be entitled to all deferred compensation payments through the end of that month in which Executive was terminated.

4. BONUS PAYMENTS. In addition to the payments under the preceding paragraph, IGSM will make quarterly bonus payments to Executive for the added value and based on a percentage of Earnings Before Interest, Taxes, Depreciation and Amortization per IGSM quarterly 10Q statements (EBITDA percentage to be determined at a later date). The amount will be determined by Board of Directors. 

5. APPOINTMENT TO BOARD OF DIRECTORS: Executive shall be appointed to the Board of Directors of IGSM upon the Effective Date.

6. EXPENSE REIMBURSEMENT. IGSM will reimburse Executive for "out-of-pocket" expenses incurred by Executive in accordance with IGSM's policies in effect from time to time. “Out-of-pocket” expenses shall include, but not be limited to, items such as travel related business expenses, per diem, home office expenses, and other expenses incurred in the performance of Executive’s duties for IGSM.

7. RECOMMENDATIONS FOR IMPROVING OPERATIONS. Executive shall provide IGSM with all information, suggestions, and recommendations regarding IGSM's business, of which Executive has knowledge that will be of benefit to IGSM. 

8. CONFIDENTIALITY. Executive recognizes that IGSM has and will have information regarding the following: 

·

inventions 

·

products 

·

product design 

·

processes 

·

technical matters 

·

trade secrets 

·

copyrights 

·

customer lists 

·

prices 

·

costs 

·

discounts 

·

business affairs 

·

future plans 

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and other vital information items (collectively, "Information") which are proprietary and non-public assets of IGSM. Information does not include information which: (i) is already in the possession of Executive prior to it being furnished by the Company; (ii) is or becomes generally available to the public; (iii) is or becomes available to Executive on a non-confidential basis from a source other than the Company; or (iv) is required, or ordered to be disclosed pursuant to applicable laws or regulations or by any subpoena or similar legal process.  Executive agrees that Executive will not at any time or in any manner, either directly or indirectly, within the normal course of his duties, divulge, disclose, or communicate any Information to any third party, excluding those who have executed confidentiality agreements, without the prior consent of IGSM. Executive will protect the Information and treat it as strictly confidential. A violation by Executive of this paragraph shall be a material violation of this Agreement. 

9. UNAUTHORIZED DISCLOSURE OF INFORMATION. If it appears that Executive has disclosed (or has threatened to disclose) Information in violation of this Agreement, IGSM may be entitled to an injunction to restrain Executive from disclosing, in whole or in part, such Information, or from providing any services to any party to whom such Information has been disclosed or may be disclosed. IGSM shall not be prohibited by this provision from pursuing other remedies, including a claim for losses and damages. 

10. CONFIDENTIALITY AFTER TERMINATION OF EMPLOYMENT. The confidentiality provisions of this Agreement shall remain in full force and effect for a 1-year period after the termination of Executive's employment. 

11. EMPLOYEE'S INABILITY TO CONTRACT FOR EMPLOYER. Executive shall not have the right to make any contracts or commitments with value in excess of $5,000.00 for or on behalf of IGSM without first obtaining the express written consent of IGSM.  

12. INDEMNIFICATION OF EMPLOYEE: Executive shall not be personally liable for any indebtedness, liability or obligation of the Company and the Company shall indemnify and hold Executive harmless from and against any and all claims, demands, liabilities, damages, losses and reasonable costs and expenses (including reasonable attorneys fees and disbursements), actions, suits or proceedings, whether civil criminal, administrative or investigative suffered or incurred by Executive by reason of his affiliation or employment by the Company.  

13. TERM/TERMINATION. Executive's employment under this Agreement shall be for an unspecified term on an "at will" basis. This Agreement may be terminated by IGSM upon 30 days written notice, and by Executive upon 30 days written notice. If Executive is in violation of this Agreement, IGSM may terminate employment 

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without notice and with compensation to Executive only to the date of such termination. The compensation paid under this Agreement shall be Executive's exclusive remedy. This Agreement shall be automatically terminated and Executive’s compensation restructured when audited revenue for IGSM exceeds $3,000,000.00 per quarter.

14. TERMINATION FOR CAUSE: Executive may be terminated for Cause by IGSM. Cause means any of the following:

(i) a conviction of the Executive, or a plea of nolo contendere, to a felony involving moral turpitude; or

(ii) willful misconduct or gross negligence by the Executive resulting, in either case, in material economic harm to the Company of any of Related Entities; or

(iii) a willful continued failure by the Executive to carry out the reasonable and lawful directions of the Board [or the Chief Executive Officer [or President] of the Company]; or

(iv) fraud, embezzlement, theft or dishonesty of a material nature by the Executive against the Company or any Related Entity, or a willful material violation by the Executive of a policy or procedure of the Company or any Related Entity, resulting, in any case, in material economic harm to the Company or any Related Entity; or

(v) a willful material breach by the Executive of this Agreement.

An act or failure to act shall not be “willful” if (i) done by the Executive in good faith or (ii) the Executive reasonably believed that such action or inaction was in the best interests of the Company.

15. TERMINATION FOR DISABILITY. IGSM shall have the option to terminate this Agreement, if Executive becomes permanently disabled and is no longer able to perform the essential functions of the position with reasonable accommodation. IGSM shall exercise this option by giving 30 days written notice to Executive. 

16. COMPLIANCE WITH EMPLOYER'S RULES. Executive agrees to comply with all of the rules and regulations of IGSM, a copy of which will be provided to Executive within 30 days of the Effective Date. 

17. RETURN OF PROPERTY. Upon termination of this Agreement, Executive shall deliver to IGSM all property which is IGSM's property or related to IGSM's business (including keys, records, notes, data, memoranda, models, and equipment) that is in Executive's possession or under Executive's control. Such obligation shall be governed by any separate confidentiality or proprietary rights agreement signed by Executive. 

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18. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered in person or on the third day after being deposited in the United States mail, postage paid, addressed as follows: 

Employer: 

IGSM Group Inc. 

Neil Swartz 

Chairman of the Board 

East 2929 Commercial Blvd., Suite PH-D 

Fort Lauderdale, Florida 33308 

  

Employee: 

John Marino JR. Such addresses may be changed from time to time by either party by providing written notice in the manner set forth above. 

19. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties. 

20. AMENDMENT. This Agreement may be modified or amended, if the amendment is made in writing and is signed by both parties. 

21. SEVERABILITY. If any provisions of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.  

22. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement. 

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23. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Florida.   

  

EMPLOYER: 

IGSM Group Inc. 

  

By: /s/ Neil Swartz      Date: June 25, 2013  

       Neil Swartz   

       Chairman of the Board   

  

AGREED TO AND ACCEPTED. 

EMPLOYEE: 

By: /s/ John Marino Jr.    Date: June 25, 2013

       John Marino JR. 

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