annually and agreed upon by the Board, and 1/4 on subjective performance evaluation by the Board. The Bonus shall be paid in one lump sum following the completion of Companys annual compensation review process and shall be paid at the same time that other employees annual bonuses are paid, but in no event later than March 15th of the calendar year immediately following the end of the annual performance review process, provided that you remain employed by the Company on the date of any such payment. Base Salary earned from your Start Date through December 31, 2013 is bonus eligible compensation and such Bonus will be determined and paid in accordance with this Section 4.
5. Options. It is the Boards intention to grant you an option as soon as practicable after your Start Date to purchase 250,000 shares of Proteons common stock (the Initial Option) subject to the Companys 2006 Equity Incentive Plan (as amended and in effect from time to time, the Plan) and the Companys standard form of Stock Option Grant Notice and related Stock Option Agreement (collectively Stock Agreement) between you and the Company. The Initial Option will be an incentive stock option (ISO) to the extent permissible under Section 422 of the Internal Revenue Code and will have an exercise price equal to $1.40 per share or the then-current fair market value of the common stock as determined by the Board, whichever is greater. The Initial Option will vest as follows: 62,500 shares of common stock upon the first anniversary of your Start Date and 15,625 shares of common stock quarterly thereafter. In addition, you may be eligible for a grant, at the Boards discretion, after the next financing that raises in excess of $10 million, but no later than the date on which the Companys common stock becomes publicly traded on any national securities exchange or the OTC Buletting Board (or a successor), of an additional option to purchase a number of shares of Proteons common stock (the Additional Option) such that the Initial Option and the Additional Option, collectively, would equal one percent (1%) of the fully diluted shares outstanding at the time of grant of the Additional Option. The Additional Option (i) will be an ISO to the extent permissible under Section 422 of the Internal Revenue Code, (ii) will have an exercise price equal to the then-current fair market value of common stock as determined by the Board, and (iii) will be subject to the Plan and the Companys Stock Agreement.
6. Benefits. You will be entitled to participate in any and all employee benefit plans, programs and perquisites from time to time in effect for employees of the Company generally, on terms no less favorable than those provided to any other employee.
7. Vacation. In the year that this Agreement becomes effective and in each year of employment thereafter, you will accrue vacation on a monthly basis per standard Company policy. However, your vacation benefit shall not be less than three (3) weeks per annum and it shall be taken at such times and intervals as shall be determined by you, subject to the reasonable business needs of the Company. Carry-over privileges for unused vacation time shall be consistent with Company policy.
8. Business Expenses. The Company shall pay or reimburse you for all reasonable business expenses incurred or paid by you in the performance of your duties and responsibilities hereunder, subject to such reasonable documentation as may be specified by the Company.
9. Termination of Employment and Severance Benefits.
(a) By the Company for Cause. The Company may terminate your employment