EXHIBIT 10.3
STOCK OPTION AGREEMENT
(2005 Plan Non-Qualified Option - Non-Officer)
Dated as of: ____________
To: _______________
Pursuant to the 2005 Stock Incentive Plan ("2005 Plan") of Somanetics
Corporation (the "Company") and with the approval of the Compensation Committee
of the Company's Board of Directors, in accordance with the 2005 Plan, the
Company hereby grants to you an option (the "Option") to purchase ___________
(_____) Common Shares, par value $.01 per share, of the Company (the "Shares")
at $_____ per Share, upon the terms and conditions contained in this Stock
Option Agreement and in the 2005 Plan, a copy of which is attached to, and made
a part of, this Stock Option Agreement.
1. The Option is intended to be a Non Qualified Stock Option, as
defined in the 2005 Plan.
2. The Option herein granted may not be transferred by you otherwise
than by will or by the laws of descent and distribution, and during your
lifetime the Option is exercisable only by you.
3. (a) Subject to the other terms of this Option and the 2005 Plan,
you may exercise the Option in accordance with the following schedule:
(i) Between the date of this Option and _________, none of the
Shares may be purchased.
(ii) Commencing _________, one-third (1/3) of the Shares may be
purchased.
(iii) Commencing _________, an additional one-third (1/3) of the
Shares may be purchased.
(iv) Commencing __________, the final one-third (1/3) of the Shares
may be purchased.
Notwithstanding anything in this Option to the contrary, but without limiting
the Company's or the Committee's rights under Section 4.8 of the 2005 Plan, the
Option shall become immediately exercisable in full upon a Change in Control, as
defined in Section 4.8(b) of the 2005 Plan.
(b) The Option shall expire (to the extent not previously
exercised), and all rights to exercise any unexercised portion of the Option
shall cease, on the earliest of the following:
- Ten Year Maximum Term. the 10th anniversary of the date of this
Option,
- Termination for Cause. the date you are terminated or removed for
cause from, or otherwise cease to hold for cause, any one or more
of the following positions with the Company or a Subsidiary: an
officer, an other employee, a director, a consultant, an advisor,
an independent contractor or an agent, and
- Other Termination. if you are terminated or removed from, or
otherwise cease to hold, all of your positions as an officer,
an other employee, a director, a consultant, an advisor, an
independent contractor or an agent of the Company and its
Subsidiaries other than because you are terminated or removed
from, or otherwise cease to hold, any of them for cause, the
following portions of the Option shall terminate at the
following times:
- Unvested Options. the portion of this Option, if any,
that is not exercisable at the date of such termination,
removal or other cessation shall terminate at the date
of such termination, removal or other cessation, and
- Vested Options. the portion of this Option, if any, that
is exercisable at the date of such termination, removal
or other cessation shall terminate, and (subject to
earlier termination as provided above) shall be
exercisable until, 90 days after the date of such
termination, removal or other cessation (one year after
the date of such termination, removal or other cessation
if such termination, removal or other cessation is a
result of your death or permanent disability).
4. The Option shall be exercised by giving a written notice of exercise
to the Treasurer of the Company and by executing such documents as the Company
may reasonably request. Such notice shall specify the number of whole Shares to
be purchased and shall be accompanied by payment by any of the methods described
in Sections 2.1(c) and 4.5 of the 2005 Plan. Such exercise shall be effective
only upon the actual receipt of such written notice, payment and other
documents, if any, and no rights or privileges of a shareholder of the Company
in respect of any of the Shares issuable upon the exercise of any part of the
Option shall inure to you, or any other person entitled to exercise the Option,
unless and until you become a shareholder of record with respect to such Shares.
If at the time of exercise, the Committee allows for payment of all or any part
of the exercise price to be made by promissory note, the interest rate for the
promissory note will be a market rate.
5. It is understood and agreed that nothing contained in the 2005 Plan
or in this Agreement, nor any action taken by the Committee, shall confer upon
you any right with respect to the continuation of your employment by, or service
with, the Company or any Subsidiary, nor interfere in any way with the right of
the Company or a Subsidiary to terminate your employment or service at any time.
Very truly yours,
SOMANETICS CORPORATION,
a Michigan corporation
By _______________________
Its ______________________
The above is agreed to and accepted.
________________________
Dated: _________________
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