MICROLIN BIOINC.
NONQUALIFIED STOCKOPTIONAGREEMENT
Notice of StockOptionGrant
MicroLin BioInc.,aDelawarecorporation(the"Company"),grantstothe Grantee namedbelow,inaccordancewiththeterms oftheMicrolinBioInc.EquityIncentive Plan(the "Plan") and this Nonqualified Stock OptionAgreement(this "Agreement"), anoption (the "Stock Option") to purchase the number of Shares at the exercise price pershare ("Exercise Price") as follows:
| Name ofGrantee: | John N.Bonfiglio |
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| Number ofShares: | 10,000 |
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| Exercise Price: | $12.65 perShare |
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| Date ofGrant: | December 31,2013 |
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| Vesting Dates: | First anniversaryoftheDateofGrantandthefirst dayofeachmonthbetweenthefirstandfourth anniversaries of the Dateof Grant |
Terms ofAgreement
1. GrantofStock Option.Subjecttoandupontheterms, conditionsand restrictions setforthinthisAgreementandin thePlan, theCompanyhereby grants to the Grantee as ofthe Dateof Grant thisStock Option topurchase the number of Sharesat the Exercise Priceas set forth above. This StockOptionis intended to be a nonqualified stock option and shall not be treatedas an "incentive stock option" within the meaning ofthat term under Section 422 of the Code.
2. VestingofStockOption.
(a) Unlessanduntil terminatedashereinafterprovided,theStockOptionshall vestandbecomeexercisableasfollows:
(i) Withrespecttotwenty-fivepercent(25%)of theSharessubjectto theStockOption,onthefirstanniversaryoftheDateofGrant,providedthattheGranteeshall haveremainedinthecontinuous employmentorotherserviceofthe CompanyoraSubsidiary throughsuch Vesting Date; and
(ii) Withrespecttoseventy-fivepercent(75%)oftheSharessubjectto theStockOption,ratably,onthefirstdayof each month betweenthefirst anniversaryofthe Date of Grant and the fourth anniversaryof the Date of Grant, provided that the Grantee shall haveremainedinthe continuous employmentor other serviceof the Company ora Subsidiary througheach such VestingDate.
(b) Notwithstanding theprovisionsofSection2(a),theStockOptionwill becomeimmediatelyvested andexercisableinfullif,priortothe applicable Vesting Date: (i) the Grantee's employmentor service with the Companyand its Subsidiaries terminatesby reason of theGrantee's death or"Disability" (definedas permanentand total disability within the meaning ofSection22(e)(3) oftheCode); or (ii) the Grantee's employment or service is terminated within two years aftera Changein Control: (A) by the Companyand its Subsidiaries without Cause and not as a result of Disability; or(B) bythe Grantee for Good Reason (defined as inSection 2(c) of thisAgreement).
(c) Forpurposes ofthisAgreement,"GoodReason"shallmeanthe occurrenceofanyofthefollowingwithouttheGrantee'sconsent:(i) a materialreduction of the Grantee's annual base salary; (ii) a material reduction in the Grantee's title, authority, responsibilities or reporting relationship as in effect immediatelypriorto the Change in Control; or (iii)theCompany's requirement that in orderto performhis obligations totheCompany,the Grantee mustrelocate hisresidence toalocation more than fifty (50)miles from the Grantee's principal officelocation immediately prior toa Change in Control. A terminationof the Grantee's employment or service by the Grantee shall not be deemed to be for Good Reason unless (x) the Grantee givesnotice tothe Company ofthe existence of the event or condition constituting GoodReason within 60 calendar days after such event orcondition initially occurs or exists, and(y) the Company fails to cure such eventor conditionwithin 30 calendar days after receivingsuch notice.
(d) Forpurposes ofthisAgreement,thecontinuousemploymentorserviceof theGranteewiththeCompanyanditsSubsidiariesshallnot bedeemedto have beeninterrupted, and theGrantee shallnotbedeemed to have ceased tobean employee of, orservice provider to, the Companyand itsSubsidiaries, byreasonofthetransfer of hisemployment or serviceamong theCompany and itsSubsidiaries ora leave of absence approved by the Board.
3. ForfeitureofStockOption.
(a) Tothe extentthattheStockOptionhasnotyetvestedpursuanttoSection 2above,itshallbeforfeitedautomaticallywithout furtheractionornoticeiftheGranteeceases tobe employed by, or to provideservicesto, the Company andits Subsidiaries prior to the applicable VestingDate other thanas providedin Section 2(b).
(b) Theprovisions ofSection17ofthePlanregardingforfeitureofAwards shallapplytotheStockOptionandanySharesdeliveredhereunder. This Section3(b) shall surviveand continue in full force in accordance withits terms notwithstandingany termination of theGrantee's employment or service or theexercise of the Stock Option as provided herein.
4. Exercise ofStock Option.
(a) Tothe extentthattheStockOptionhasbecomevestedandexercisablein accordancewiththisAgreement,itmaybeexercisedinwhole or in part from timeto time by written noticeto theCompanystating the number of whole Shares for whichtheStock Option is being exercised, theintended manner of payment,and such otherprovisions as may berequired bythe Company. The StockOption maybeexercised, duringthelifetime of theGrantee,only by the Grantee, or in the event of his legal incapacity, by his guardian orlegal representative actingon behalfof theGranteein a fiduciary capacityunder statelaw and/or court supervision. Ifthe Grantee dies before theexpirationof the Stock Option,all or part of this Stock Option may be exercised(prior toexpiration) bythe personal representative of the Grantee or by any person who has acquired this Stock Option directly from the Grantee by will, bequest or inheritance, but only to the extent that the Stock Option was vested and exercisable upon the Grantee's death.
(b) TheExercise Priceispayableincashorbycertifiedorcashier'scheckor othercashequivalentacceptabletothe Boardpayable tothe order of the Company.
5. Term of StockOption.Subject toSection3(b)hereof, the Stock Option will terminate on the earliest ofthefollowing dates (the "Expiration Date"):
(a) Twelve(12) monthsafterthetermination of theGrantee'semploymentorserviceasaresultof death or Disability;
(b) Immediately upon termination of theGrantee'semploymentorserviceby theCompanyforCause;
(c) Ninety(90) daysaftertheterminationoftheGrantee's employmentorserviceforanyotherreason;or
(d) Midnightonthedayimmediatelyprecedingthetenthanniversaryofthe DateofGrant.
6. Delivery of Shares.Subject tothetermsandconditionsofthisAgreementand thePlan,Shares shallbeissuableto theGrantee as soon asadministrativelypracticable following the date the Grantee (a)exercises the Stock Option in accordance with Section 4 hereof, (b) makes full payment tothe Company ofthe Exercise Price and(c) makesarrangements satisfactory to the Company(orany Subsidiary, if applicable)forthepayment of any required withholding taxesrelatedto theexerciseof the Stock Option. TheGrantee shall not possessany incidents of ownership (including,without limitation, dividend or voting rights) in the Shares until such Shares have been issued to the Granteeinaccordance withthis Section6.
7. Transferability.TheStock Optionmaynotbesold,exchanged,assigned, transferred,pledged,encumbered or otherwisedisposedof bythe Grantee; provided that theGrantee's rights withrespect tosuch Stock Option maybe transferred by will or pursuantto the laws ofdescentanddistribution. Any purported transferor encumbrance in violation ofthe provisions of thisSection 7shall bevoid,and theother party toanysuch purported transaction shall not obtain any rights to or interest in such Stock Option.
8. Restrictions onResale.Unless and untilregistered under the Securities Act of 1933,asamended (the"SecuritiesAct"),anyShares purchasedpursuant to the Stock Option will be illiquid andwill be deemed to be "restricted securities" forpurposes of the Securities Act. Accordingly,any such Shares maybe soldonly in compliancewith the registrationrequirements ofthe Securities Act oran exemption therefrom andmayneed tobe held indefinitely. Unless and until the Shareshave been registered under the Securities Act, each certificate evidencing anyof the Shares shall bear a restrictive legendspecifiedby the Company.
9. Company's Right toRepurchaseShares.
(a) TheCompany shallhavetheright(the"RepurchaseRight") torepurchase all,butnotlessthanall,oftheSharespurchasedbythe Granteepursuantto theStock Option, uponwritten noticeto theGrantee within ninety (90)daysafter thetermination of the Grantee'semployment orservice with theCompany anditsSubsidiaries, voluntarily or involuntarily, for anyreasonwhatsoever other than bythe Company forCause,includingas a result ofdeathor Disability. The RepurchaseRightshall beexercised bytheCompanybygiving the holder of the Shareswritten notice of itsintention to exercisethe Repurchase Right, and,together with such notice,tenderingtothe holder an amount equal tothe FairMarketValue of theShares. Upon timely exercise ofthe Repurchase Rightin the manner provided inthis Section9(a),the holder of the Sharesshall deliver to theCompany any stock certificateorcertificates representing the Shares being repurchased, dulyendorsed and free and clear of any and all liens, charges and encumbrances. If Shares arenotrepurchased undertheRepurchase Right, theGrantee andhis successorininterest,if any, will continue to hold theShares subjecttoall oftheprovisions of this Agreement and the Plan.
(b) Inthe eventthat theCompanyoraSubsidiaryterminatestheGrantee's employmentorservice forCause,theCompany'srightswithrespecttoanyShares purchased by the Grantee pursuant to the StockOptionshall be governedby Section 3(b) of this Agreement and Section 17 of the Plan.
10. No Right toContinuedEmploymentorService.Nothing containedinthisAgreement shallconferupon the Granteeany right withrespect to continuance of employment by or service withthe Company and its Subsidiaries, nor limit or affect in any manner the right of the Companyand its Subsidiaries to terminate the employmentor service ofthe Grantee or adjust the Grantee's compensation.
11. RelationtoOtherBenefits.Any economicorother benefittotheGranteeunder thisAgreementorthePlanshallnotbetaken intoaccount indetermining any benefitsto which the Grantee maybe entitled underany profit-sharing, retirementorotherbenefitor compensation planor arrangement maintained bytheCompany or a Subsidiary.
12. Taxes and Withholding.TheGranteeshallpaytotheCompany,ormake arrangementssatisfactoryto theCompanyfor paymentof,anyfederal,state, local orothertaxes that the Company or any Subsidiary is required to withhold in connection with the delivery of Shares underthis Agreement.The obligation of theCompany todeliver Shares under this Agreement shall be conditioned on such paymentor arrangements, and the Companyand its Subsidiariesshall, to the extent permittedby Applicable Law, have theright to deduct any such taxesfromany paymentotherwise due to the Grantee.
13. Compliance withApplicableLaw.The Company shallmakereasonableefforts tocomplywithApplicableLaw(includingapplicablefederalandstatesecurities laws)with respect totheStock Option; provided that, notwithstanding any otherprovision of this Agreement, and only to theextent permitted under Section 409Aof the Code, theCompany shall not beobligatedto deliverany Sharespursuant to this Agreement ifthe delivery thereof would resultin a violationof Applicable Law.
14. Adjustments.TheExercisePriceandthenumberandkindofsharesofstock coveredbythisAgreementshall be subject to adjustment as provided in Section 13 of the Plan.
15. Amendments.Subjecttotheterms ofthePlan,theBoardmaymodifythis Agreementuponwrittennoticetothe Grantee.Anyamendmenttothe Plan shall be deemed to be an amendment tothis Agreement tothe extent that the amendment is applicable hereto. Notwithstanding the foregoing, no amendmentof the Plan or this Agreement shall adversely affect the rights of the Grantee under this Agreementin amaterial way without the Grantee's consent, except as otherwise may be provided in the Plan.
16. Severability.Inthe eventthatoneormoreoftheprovisionsofthisAgreement shallbeinvalidatedforanyreasonbyacourtofcompetentjurisdiction, anyprovision so invalidated shall bedeemed to be separablefrom the other provisionshereof, and theremaining provisions hereof shall continue to be valid and fully enforceable.
17. Relation toPlan.This Agreementissubjecttothetermsandconditionsofthe Plan,includingtheforfeitureprovisionsofSection17 of the Plan. This Agreement and the Plan containtheentireagreement and understanding oftheparties withrespect to the subject matter contained in thisAgreement, and supersede all prior written ororal communications, representations and negotiationsin respectthereto . In the event of any inconsistency betweenthe provisionsof thisAgreement and the Plan, the Planshall govern.Capitalized terms usedherein without definition shall have themeanings assigned tothem inthe Plan.TheBoard shallhave the right to determine any questions which arise in connection with the grant ofthe Stock Option.
18. Successors andAssigns.Without limitingSection7hereof,theprovisionsof thisAgreementshallinuretothebenefitof,andbe binding upon, the successors, administrators, heirs, legal representatives andassigns of the Grantee, andthe successors and assigns of the Company.
19. Governing Law.The interpretation,performance,andenforcementofthis AgreementshallbegovernedbythelawsoftheStateofDelaware, excluding any conflictsor choiceof law rule or principle that might otherwiserefer interpretation orenforcement of the Agreement to the substantive law of another jurisdiction.
20. Use ofGrantee'sInformation.Information abouttheGranteeandtheGrantee's participation inthe Plan maybecollected,recordedandheld, usedand disclosedfor any purpose related tothe administration ofthe Plan.The Granteeunderstands that such processing ofthis information mayneedto becarried outbythe Company and itsSubsidiaries andbythirdparty administrators whether such personsare locatedwithin the Grantee's country or elsewhere, including theUnited States ofAmerica . The Grantee consentstotheprocessingof information relatingto the Grantee and the Grantee'sparticipation in thePlan inany one or more ofthe ways referred to above.
[SIGNATURE PAGEFOLLOWS]
IN WITNESSWHEREOF,the Companyhascausedthis Agreementtobeexecutedonits behalfbyits dulyauthorizedofficerandtheGrantee hasalsoexecutedthis Agreement, as of the Date of Grant.
MICROLIN BIOINC.
By:/s/ Joseph Hernandez
Joseph Hernandez
Executive Chairman
The undersignedGranteehereby acknowledges receiptofacopyofthePlan.The Granteerepresentsthatheisfamiliarwiththetermsand provisions of thePlan, hashad an opportunity toobtain the advice of counselprior to executing this Agreement, andhereby accepts the Stock Option on the terms and conditions set forth herein and inthe Plan.
GRANTEE
/s/ John N. Bonfiglio
John N. Bonfiglio
