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PRPO Precipio

Filed: 13 May 01, 8:00pm


                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is made effective as of March 30, 2001, by and
between Transgenomic, Inc., a Delaware corporation (the "Company"), and
Gregory J. Duman ("Employee").

         The Company and Employee desire to enter into an Employment
Agreement (this "Agreement"). Accordingly, the Company and Employee agree as
follows:

         Section 1. EFFECTIVE DATE; POSITION; TERM. This Agreement shall
become effective on April 2, 2001 (the "Effective Date"). The Company shall
employ Employee as Executive Vice President. The initial term of the
Agreement will be for a minimum of three (3) years from the Effective Date,
and the Agreement may be extended upon mutual consent of the parties.

         Section 2.  POSITION AND DUTIES.  During the Employment Period:

                  (a) Employee shall have the normal responsibilities, duties
         and authorities of Executive Vice President to be defined prior to the
         Effective Date.

                  (b) Employee shall report to the Chief Executive Officer of
         the Company and Employee shall perform faithfully the executive duties
         assigned to him to the best of his ability in a diligent, trustworthy,
         businesslike and efficient manner and will devote his full business
         time and attention to the business and affairs of the Company and its
         Subsidiaries and Affiliates; provided, however, that Employee may serve
         as a director of or a consultant to other corporations which do not
         compete with the Company, nonprofit corporations, civic organizations,
         professional groups and similar entities.

                  (c) For purposes of this Agreement, "Subsidiary" shall mean
         any corporation or other entity of which securities having a majority
         of the voting power in electing directors or comparable management are,
         at the time of determination, owned by the Company, directly or through
         one or more Subsidiaries.

                  (d) For purposes of this Agreement, "Affiliate" of any
         particular person means any other person controlling, controlled by or
         under common control with such particular person.



         Section 3.  BASIC COMPENSATION.

                  (a) BASE SALARY. As compensation for his services
         hereunder, the Company shall pay to Employee during the Employment
         Period an initial base salary of $200,000 per year.

                  Base Salary shall be payable in equal installments in arrears
         on a biweekly basis or as otherwise may be mutually agreed upon.

         The salary shall be increased over the previous year's salary as
         mutually agreed to.

         Section 4. BONUS. In addition to the Base Salary, Employee shall be
eligible to receive an annual bonus based on Employee's performance in
conjunction with specific mutually agreed goals and objectives defined prior
to such calendar year payable at such time or times during or following each
calendar year as shall be determined by the Chief Executive Officer and the
Board of Directors (the "Board") or a committee thereof in its sole
discretion and based on formulas to be determined each year by the Board or
such committee in its sole discretion for the Company's management bonus plan.

         Section 5. PARTICIPATION IN EMPLOYEE BENEFIT PLANS. Employee will be
entitled to participate in all Company salaried employee benefit plans and
programs, subject to the terms and conditions of each such employee benefit
plan or program and to the extent commensurate with his position as Chief of
Operations.

         Section 6.  OTHER BENEFITS.

                  (a) VACATION. Employee shall initially be entitled to four
         weeks' paid vacation each year.

                  (b) INSURANCE. The Company shall make available to Employee
         health and dental insurance (including dependent coverage), and other
         benefits from time to time provided to employees.

         Section 7. BUSINESS EXPENSES. The Company shall reimburse Employee
for all reasonable expenses incurred by him in the course of performing his
duties under this Agreement which are consistent with the Company's policies
in effect from time to time with respect to travel, entertainment and other
business expenses, subject to the Company's requirements with respect to
report and documentation of such expenses.



         Section 8. STOCK OPTIONS AND OPTION SHARES. Employee will be granted
200,000 shares subject to the approval of the Compensation Committee of the
Board of Directors. The price of the options will be the fair market value on
the date the options are granted. Twenty five percent (25%) of the options
will vest immediately on the date of the grant, the remaining options will
vest twenty five percent (25%) on the next three anniversary dates of the
date of the grant. All unvested options will vest upon the Company being
acquired or merged into another entity.



         Section 9.  TERMINATION OF EMPLOYMENT.

                  (a) EVENTS OF TERMINATION AND SEVERANCE PAYMENT. In the event
         that, during the term of this Agreement, Employee is discharged for any
         reason other than for Just Cause (as defined below), Employee shall be
         entitled to receive certain payment (the "Severance Payment") following
         termination of employment. Severance Payment will be made at the
         Employees then current base salary for an amount equal to 12 (twelve)
         months' salary. In addition, in case of such discharge, Employee will
         retain all vested stock options. All unvested stock options will lapse.

                  (b) "Just Cause" being defined as any criminal act (felony)
         being committed by employee, if employee commits fraud or dishonesty
         toward the Company, other significant activities materially harmful to
         the reputation of the Company as reasonably defined by the Company,
         willful refusal to perform or substantial disregard of the duties
         properly assigned, significant violation of any statutory or common law
         or a material violation of Section 11 or 12 below, or intentionally
         takes any other action materially inimical to the best interests of the
         Company

                  (c) EFFECT OF BREACH OF NONCOMPETITION PROVISIONS. In the
         event Employee breaches or otherwise fails to comply with the
         provisions of Section 11 or 12 below, then, in addition to any other
         remedies provided herein or at law or in equity, the Company shall have
         the right to require return of any severance payment made to the
         Employee. Return of such Severance Payment pursuant to the preceding
         sentence shall not relieve Employee's obligations pursuant to Section
         11 or 12 below.

         Section 10.  ASSIGNMENT AND SUCCESSION.

                  (a) The rights and obligations of the Company under this
         Agreement shall inure to the benefit of and be binding upon its
         respective successors and assigns, and Employee's rights and
         obligations hereunder shall inure to the benefit of and be binding upon
         his successors and permitted assigns, whether so expressed or not.

                  (b) Employee acknowledges that the services to be rendered by
         him hereunder are unique and personal. Accordingly, Employee may not
         pledge or assign any of his rights or delegate any of his duties or
         obligations under this Agreement without the express prior written
         consent of the Company.

                  (c) The Company may not assign its interest in or obligations
         under this Agreement without the prior written consent of Employee.



         Section 11.    CONFIDENTIAL INFORMATION.

                  (a) COMPANY INFORMATION. Employee agrees at all times during
         the term of his Relationship with the Company and thereafter, to hold
         in strictest confidence, and not to use, except for the benefit of the
         Company, or to disclose to any person, firm, corporation or other
         entity without written authorization of the Board of Directors of the
         Company, any Confidential Information of the Company which Employee
         obtains or creates, by whatever means. Employee further agrees not to
         make copies of such Confidential Information except as authorized by
         the Company. Employee understands that "CONFIDENTIAL INFORMATION" means
         any Company proprietary information, technical data, trade secrets or
         know-how, including, but not limited to, research. product plans,
         products, services, suppliers, customer lists and customers (including,
         but not limited to, customers of the Company on whom Employee called or
         with whom Employee became acquainted during the Relationship), prices
         and costs, markets, software, developments, inventions, laboratory
         notebooks, processes, formulas, technology, designs, drawings,
         engineering, hardware configuration information, marketing, licenses,
         finances, budgets or other business information disclosed to Employee
         by the Company either directly or indirectly in writing, orally or by
         drawings or observation of parts or equipment or created by Employee
         during the period of the Relationship, whether or not during working
         hours. Employee understands that "CONFIDENTIAL INFORMATION" includes,
         but is not limited to, information pertaining to any aspects of the
         Company's business which is either information not known by actual or
         potential competitors of the Company or is proprietary information of
         the Company or its customers or suppliers, whether of a technical
         nature or otherwise. Employee further understands that "CONFIDENTIAL
         INFORMATION" does not include any of the foregoing items which have
         become publicly and widely known and made generally available through
         no wrongful act of Employee's or of others who were under
         confidentiality obligations as to the item or items involved.

                  (b) FORMER EMPLOYER INFORMATION. Employee represents that as
         an employee of the Company, he has not breached and will not breach any
         agreement to keep in confidence proprietary information, knowledge or
         data acquired by Employee in confidence or trust prior or subsequent to
         the commencement of Employee's Relationship with the Company, and
         Employee will not disclose to the Company, or induce the Company to
         use, any inventions, confidential or proprietary information or
         material belonging to any previous employer or any other party.

                  (c) THIRD PARTY INFORMATION. Employee recognizes that the
         Company has received and in the future will receive confidential or
         proprietary information from third parties subject to a duty on the
         Company's part to maintain the confidentiality of such information and
         to use it only for certain limited purposes. Employee agrees to hold
         all such confidential or proprietary information in the strictest
         confidence and not to disclose it to any person, firm or corporation or
         to use it except as necessary in carrying out Employee's work for the
         Company consistent with the Company's agreement with such third party.



         Section 12. RETURN OF COMPANY DOCUMENTS. Employee agrees that, at
the time of termination of his Relationship with the Company, he will deliver
to the Company (and will not keep in his possession, recreate or deliver to
anyone else) any and all devices, records, data, notes, reports, proposals,
lists, correspondence, specifications, drawings, blueprints, sketches,
laboratory notebooks, materials, flow charts; equipment, other documents or
property, or reproductions of any aforementioned items developed by Employee
pursuant to the Relationship or otherwise belonging to the Company, its
successors or assigns. Employee further agrees that any property situated on
the Company's premises and owned by the Company, including disks and other
storage media, filing cabinets or other work areas, is subject to inspection
by Company personnel at any time with or without notice. In the event of the
termination of the Relationship, Employee agrees to sign and deliver the
"Termination Certification" attached hereto as Exhibit "A."

            Section 13. NONCOMPETITION. Independent of any obligation under
any other contract or agreement between Employee and the Company, for a
period of one (1) year following the termination of Employee's employment
relationship with the Company, Employee shall not, directly or indirectly,
whether as an individual for his own account, or for or with any other
person, firm, corporation, partnership, joint venture, association, or other
entity whatsoever, which is or intends to be engaged in biotechnology
business and, more particularly, that provides technologies for DNA/RNA
analysis and purification utilization DHPLC technologies (provided, however,
that the restrictions set forth in this clause shall not apply to involvement
that consists solely of "beneficially owning," as such term is used in Rule
13d-3 promulgated under the Exchange Act 2% or less of the outstanding
securities of any class of securities issued by a publicly-traded entity):

                  (a) Solicit, interfere with, or endeavor to entice away from
         the Company, any person, firm, corporation, partnership, or entity of
         any kind whatsoever, which was or is a client or licensor of the
         Company, for which the Company performed services, with respect to any
         business, product or service that is competitive to the products or
         services offered by the Company, or under development by the Company,
         as of the date of the termination of Employee's relationship with the
         Company. This restriction shall apply only to such clients or licensors
         of the Company as were serviced or solicited by Employee at any time
         during the one (1) year prior to the separation of Employee's
         relationship with the Company, either as an independent contractor or
         as an employee of the Company;

                  (b) Solicit or endeavor to induce any of the Company's
         employees or consultants to terminate their relationship with the
         Company, or take away such employees or consultants, or attempt to
         solicit, induce, recruit, encourage or take away employees or
         consultants of the Company, either for Employee or for any other person
         or entity;

                  (c ) Induce or attempt to induce any supplier, licensee or
         other business relation of the Company to cease doing business with the
         Company, or in any way interfere with the relationship between any such
         supplier, licensee or business relation and the Company.



          Section 14. BUSINESS OPPORTUNITY. Employee represents and
acknowledges that the foregoing restrictions will not prevent him from
obtaining gainful employment in his field of expertise or cause him undue
hardship; and that there are numerous other employment opportunities
available to him that are not affected by the foregoing restrictions.
Employee further acknowledges that the foregoing restrictions are reasonable
and necessary, in order to protect the Company's legitimate interests, and
that any violation thereof would result in irreparable injury to the Company.

         Section 15. CONFLICTS OF INTEREST POLICIES. Employee shall
diligently adhere to the Company's Conflict of Interest Policy as adopted by
the Board and in effect from time to time.

         Section 16. ARBITRATION AND EQUITABLE REMEDIES.

                  a) Except as provide in Section 16 (b) hereof, the parties
      agree that any dispute or controversy arising out of, relating to, or
      concerning the interpretation, construction, performance or breach of this
      Agreement, shall be settled by arbitration to be held in Nebraska, in
      accordance with the Employment Dispute Resolution rules of the American
      Arbitration Association then in effect. The arbitrator may grant
      injunctions or other relief in such dispute or controversy and the
      decision of the arbitrator shall be final, conclusive and binding on the
      parties to the arbitration. Judgment may be entered on the arbitrator's
      decision in any court having jurisdiction. The Company and Employee shall
      each pay one-half of the costs and expenses of such arbitration, and each
      shall separately pay the fees and expenses of their respective legal
      counsel.

                  THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S
         RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES
         RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP.

         (b) Notwithstanding paragraph (a) of this Section 16, the parties agree
      that, in the event of the breach or threatened breach of Sections 11, 13
      or 14 of this Agreement by Employee, monetary damages alone would not be
      an adequate remedy to the Company and its Subsidiaries for the injury that
      would result from such breach, and that the Company and its Subsidiaries
      shall be entitled to apply to any court of competent jurisdiction for
      specific performance and/or injunctive relief (without posting bond or
      other security) in order to enforce or prevent any violation of such
      provisions of this Agreement. Employee further agrees that any such
      injunctive relief obtained by the Company or any of its Subsidiaries shall
      be in addition to monetary damages.

         Section 17. INDEMNIFICATION. The Company agrees to indemnify and
hold harmless Employee for any and all actions taken by Employee in carrying
out his duties under this Agreement.

         Section 18. ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matters covered hereby
and shall supersede any



prior understandings, agreements or representations by or between the
parties, written or oral, which may have related to the subject matter hereof
in any way and shall not be amended or waived except in a writing signed by
the parties hereto.

         Section 19. NOTICES. Any notice or request required or permitted to
be given hereunder shall be in writing and will be deemed to have been given
(i) when delivered personally, sent by telecopy (with hard copy to follow) or
overnight express courier or (ii) five days following mailing by certified or
registered mail, postage prepaid and return receipt requested, to the
addresses below unless another address is specified by such party in writing:

         To the Company:           Transgenomic, Inc.
                                   12325 Emmet Street
                                   Omaha, NE  68164
                                   Attention:  Chief Executive Officer
                                   Telephone:  (402) 452-5433
                                   Telecopy:   (402) 452-5447

         To the Employee:          Gregory J. Duman
                                   17540 Bay Wood Circle
                                   Omaha, NE 68130

         Section 20. HEADINGS. The article and section headings herein are
for convenience of reference only and shall not define or limit the
provisions hereof.

         Section 21. APPLICABLE LAW. The corporate law of the State of
Delaware will govern all questions concerning the relative rights of the
Company and its stockholders. All other questions concerning the
construction, validity and interpretation of this Agreement shall be governed
by the internal laws of the State of Nebraska.

         Section 22. SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held
prohibited by, invalid or unenforceable in any respect under applicable law,
such provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

         Section 23. AMENDMENTS AND WAIVERS. Any provision of this Agreement
may be amended or waived only with the prior written consent of the Company
and Employee.

         Section 24. NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be
applied against any party hereto.



         Section 25. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same agreement.

         Section 26. EMPLOYEE REPRESENTATIONS. Employee hereby represents and
warrants to the Company that (i) the execution, delivery and performance of
this Agreement by Employee does not and will not conflict with, breach,
violate or cause a default under any contract, agreement, instrument, order,
judgment or decree to which Employee is a party or by which he is bound, (ii)
Employee is not a party to or bound by any employment agreement, noncompete
agreement or confidentiality agreement with any other person or entity and
(iii) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of Employee, enforceable
in accordance with its terms.

         Section 27. SURVIVAL. Sections 8, 11, 12 and 15 shall survive and
continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period.

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
signed by its duly authorized officer and Employee has signed this Agreement.

                                       TRANSGENOMIC, INC.


                                       By
                                          ---------------------------------
                                          Name:  Collin D'Silva
                                          Title: Chief Executive Officer

                                       EMPLOYEE

                                       ------------------------------------
                                       Name: Gregory J. Duman