ROCHESTER MEDICAL CORPORATION 2010 STOCK INCENTIVE PLAN NON-INCENTIVE STOCK OPTION AGREEMENT
Exhibit 10.4
ROCHESTER MEDICAL CORPORATION
2010 STOCK INCENTIVE PLAN
2010 STOCK INCENTIVE PLAN
This NON-INCENTIVE STOCK OPTION AGREEMENT (the “Agreement”) is made effective this
day of , , by and between Rochester Medical Corporation, a Minnesota corporation (the
“Company”) and , an individual resident of , (“Participant”).
1. Grant of Option. The Company hereby grants Participant the option (the “Option”)
to purchase all or any part of an aggregate of [ ] shares (the “Shares”) of Common Stock of
the Company at the exercise price of $[ ] per share according to the terms and conditions set
forth in this Agreement and in the Rochester Medical Corporation 2010 Stock Incentive Plan (the
“Plan”). The Option will not be treated as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). The Option is issued
under the Plan and is subject to its terms and conditions. Words and phrases not otherwise defined
herein shall have the meanings ascribed to them, respectively, in the Plan. A copy of the Plan
will be furnished upon request of Participant.
The Option shall terminate at the close of business [ten] years from the date hereof.
2. Vesting of Option Rights.
(a) Except as otherwise provided in this Agreement, the Option may be exercised by Participant
in accordance with the following schedule:
| Number of Shares | ||||
| On or after each of | with respect to which | Cumulative | ||
| the following dates | the Option is exercisable | Total | ||
(b) During the lifetime of Participant, the Option shall be exercisable only by Participant
and shall not be assignable or transferable by Participant, other than by will or the laws of
descent and distribution. Notwithstanding the foregoing, Participant may transfer the Option to
any Family Member (as such term is defined in the General Instructions to Form S-8 (or successor to
such Instructions or such Form)), provided, however, that (i) Participant may not receive any
consideration for such transfer, (ii) the Family Member must agree in writing not to make any
subsequent transfers of the Option other than by will or the laws of the descent and distribution
and (iii) the Company receives prior written notice of such transfer.
Participant may designate a beneficiary or beneficiaries to exercise Participant’s rights with
respect to the Option upon Participant’s death. In the absence of any such designation, benefits
remaining unpaid at death shall be paid to Participant’s estate.
[Director — Non-ISO]
3. Exercise of Option after Termination of Directorship, Death or Disability. The
Option shall terminate and may no longer be exercised if Participant ceases to be a director of the
Company or its Affiliates, except that:
(a) If Participant’s term as a director shall be terminated for any reason, voluntary or
involuntary, other than for Participant’s death or disability (within the meaning of
Section 22(e)(3) of the Code), Participant may at any time within a period of twelve (12) months
after such termination exercise the Option to the extent the Option was exercisable by Participant
on the date of the termination of Participant’s directorship.
(b) If Participant shall die while the Option is still exercisable according to its terms or
if directorship is terminated because Participant has become disabled (within the meaning of
Section 22(e)(3) of the Code) while a director of the Company and Participant shall not have fully
exercised the Option, such Option may be exercised at any time within twelve (12) months after
Participant’s death or date of termination of employment for disability by Participant, personal
representatives or administrators or guardians of Participant, as applicable or by any person or
persons to whom the Option is transferred by will or the applicable laws of descent and
distribution, to the extent of the full number of Shares Participant was entitled to purchase under
the Option on (i) the date of death or (ii) the date of termination for such disability, as
applicable.
(c) Notwithstanding the above, in no case may the Option be exercised to any extent by anyone
after the termination date of the Option.
4. Change in Control. If a Change in Control shall occur, the Continuing
Directors in their sole discretion, and without the consent of Participant, may determine that
Participant shall receive, in lieu of some or all of the shares of Common Stock subject to this
Option, as of the effective date of any such Change in Control, cash in an amount equal to the
excess, if any, of the Fair Market Value of such shares on the effective date of such Change in
Control over the exercise price per share of this Option, subject to any applicable withholding for
income or payroll taxes. A “Change in Control” shall mean any of the following: (i) the
consummation of a merger or consolidation of the Company with or into another entity or any other
corporate reorganization, if more than 50% of the combined voting power of the continuing or
surviving entity’s securities outstanding immediately after such merger, consolidation or other
corporate reorganization are owned by persons who were not shareholders of the Company immediately
prior to such merger, consolidation or other corporate reorganization, (ii) a public announcement
(which, for purposes of this definition, shall include, without limitation, a report filed pursuant
to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that any
person or group has acquired beneficial ownership of more than 50% of the then outstanding shares
of Common Stock and, for this purpose, the terms “person,” “group” and “beneficial ownership” shall
have the meanings provided in Section 13(d) of the Exchange Act or related rules promulgated by the
Securities and Exchange Commission; (iii) the Continuing Directors (as defined below) cease to
constitute a majority of the Company’s Board of Directors; (iv) a sale of all or substantially all
of the assets of the Company or the dissolution of the Company; (v) the commencement of or public
announcement of an intention to make a tender or exchange offer for more than 50% of the then
outstanding shares of the Common Stock; or (vi) the majority of Continuing Directors, in their sole
and absolute discretion, determine that there has been a change in control of the Company.
“Continuing Director” shall mean any person who is a
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member of the Board of Directors of the Company, who (A) was a member of the Board of
Directors on the date of this Agreement or (B) subsequently becomes a member of the Board of
Directors, if such person’s initial nomination for election or initial election to the Board of
Directors is recommended or approved by a majority of the Continuing Directors.
5. Method of Exercise of Option. Subject to the foregoing, the Option may be
exercised in whole or in part from time to time by serving written notice of exercise on the
Company at its principal office within the Option period. The notice shall state the number of
Shares as to which the Option is being exercised and the manner of payment, and shall be
accompanied by payment in full of the exercise price for all Shares designated in the notice.
Payment of the exercise price shall be made (i) in cash (including bank check, personal check or
money order payable to the Company), (ii) with the approval of the Company (which may be given in
its sole discretion), by delivering to the Company for cancellation shares of the Company’s Common
Stock already owned by Participant having a Fair Market Value equal to the full exercise price of
the Shares being acquired, or (iii) with the approval of the Company (which may be given in its
sole discretion) by delivering to the Company a combination thereof. Participant shall represent
and warrant in writing that Participant is the owner of any shares so delivered, free and clear of
all liens, encumbrances, security interests and restrictions. In addition, the Option may be
exercised by instructing the Company to deliver a number of Shares having an aggregate Fair Market
Value (determined as of the date of exercise) equal to the excess, if positive, of the Fair Market
Value of the Shares underlying the Option being exercised, on the date of exercise, over the
exercise price of the Option for such Shares.
6. Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Shares, other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or
exchange of Shares or other securities of the Company, issuance of warrants or other rights to
purchase Shares or other securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is necessary in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available under the Option, then the
Committee shall, in such manner as it may deem equitable, adjust the number and type of Shares
subject to the Option and the exercise price with respect to the Option.
7. Miscellaneous.
(a) Income Tax Matters.
(i) In order to comply with all applicable federal or state income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure that all
applicable federal or state payroll, withholding, income or other taxes, which are the sole
and absolute responsibility of Participant, are withheld or collected from Participant.
(ii) In accordance with the terms of the Plan, and such rules as may be adopted under
the Plan, Participant may elect to satisfy Participant’s federal and state income tax
withholding obligations arising upon exercise of the Option by (i) delivering cash, check
(bank check, certified check or personal check) or money order payable to the Company, (ii)
having the Company withhold a portion of the Shares otherwise to be
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delivered having a Fair Market Value equal to the amount of such taxes, or (iii)
delivering to the Company shares of Common Stock already owned by Participant having a Fair
Market Value equal to the amount of such taxes. Any such shares already owned by
Participant shall have been owned by Participant for no less than six months prior to the
date delivered to the Company if such shares were acquired upon the exercise of an option or
upon the vesting of restricted stock units or other restricted stock. Participant shall
represent and warrant in writing that Participant is the owner of the shares so delivered,
free and clear of all liens, encumbrances, security interests and restrictions.
Participant’s election must be made on or before the date that the amount of tax to be
withheld is determined.
(b) Plan Provisions Control. In the event that any provision of this Agreement
conflicts with or is inconsistent in any respect with the terms of the Plan, the terms of the Plan
shall control.
(c) No Rights of Shareholders. Neither Participant, Participant’s legal
representative nor a permissible assignee of this Option shall be, or have any of the rights and
privileges of, a shareholder of the Company with respect to the Shares issuable upon the exercise
of this Option, in whole or in part, unless and until such Shares have been issued in the name of
Participant, Participant’s legal representative or permissible assignee, as applicable.
(d) No Right to Directorship. The grant of the Option shall not be construed as
giving Participant the right to continue as a director of the Company or any Affiliate nor will it
affect in any way the right of the Company or an Affiliate to remove a director in accordance with
applicable law. In addition, the Company or an Affiliate may at any time remove a director of the
Company or an Affiliate, free from any liability or any claim under the Plan or this Agreement,
unless otherwise expressly provided in the Plan. By participating in the Plan, Participant shall
be deemed to have accepted all the conditions of the Plan and the Agreement and the terms and
conditions of any rules and regulations adopted by the Committee and shall be fully bound thereby.
(e) Governing Law. The internal law, and not the law of conflicts, of the State of
Minnesota shall govern all questions concerning the validity, construction and effect of the Plan
and this Agreement, and any rules and regulations relating to the Plan and this Agreement.
(f) Severability. If any provision of the Plan or this Agreement is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or
this Agreement under any law deemed applicable by the Committee, such provision shall be construed
or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the purpose or intent of the
Plan or the Agreement, such provision shall be stricken as to such jurisdiction or the Agreement,
and the remainder of this Agreement shall remain in full force and effect.
(g) No Trust or Fund Created. Neither the Plan nor this Agreement shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the
Company or any Affiliate and Participant or any other Person. To the extent that Participant
acquires a right to receive payments from the Company or any Affiliate pursuant to this
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Agreement, such right shall be no greater than the right of any unsecured general creditor of
the Company or any Affiliate.
(h) No Fractional Shares. No fractional shares shall be issued or delivered pursuant
to this Agreement. The Company will pay, in lieu thereof, the Fair Market Value of such fractional
share.
(i) Headings. Headings are given to the Sections and subsections of the Agreement
solely as a convenience to facilitate reference. Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of this Agreement or any provision
hereof.
(j) Conditions Precedent to Issuance of Shares. Shares shall not be issued pursuant
to the exercise of the Option unless such exercise and the issuance and delivery of the applicable
Shares pursuant thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, the requirements of any applicable stock
exchange or the Nasdaq Stock Market and the Minnesota Business Corporation Act. As a condition to
the exercise of the purchase price relating to the Option, the Company may require that the person
exercising or paying the purchase price represent and warrant that the Shares are being purchased
only for investment and without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation and warranty is required by law.
(k) Consultation With Professional Tax and Investment Advisors. The holder of this
Award acknowledges that the grant, exercise, vesting or any payment with respect to this Award, and
the sale or other taxable disposition of the Shares acquired pursuant to the exercise thereof, may
have tax consequences pursuant to the Code or under local, state or international tax laws. The
holder further acknowledges that such holder is relying solely and exclusively on the holder’s own
professional tax and investment advisors with respect to any and all such matters (and is not
relying, in any manner, on the Company or any of its employees or representatives). Finally, the
holder understands and agrees that any and all tax consequences resulting from the Award and its
grant, exercise, vesting or any payment with respect thereto, and the sale or other taxable
disposition of the Shares acquired pursuant to the Plan, is solely and exclusively the
responsibility of the holder without any expectation or understanding that the Company or any of
its employees or representatives will pay or reimburse such holder for such taxes or other items.
{Signature page follows}
IN WITNESS WHEREOF, the Company and Participant have executed this Agreement on the date set
forth in the first paragraph.
| ROCHESTER MEDICAL CORPORATION |
||||
| By: | ||||
| Name: | ||||
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| Title: | ||||
| [DIRECTOR] | ||||
| Name: | ||||
{Signature Page to Non-Incentive Stock Option Agreement/
Rochester Medical Corporation 2010 Stock Incentive Plan}
Rochester Medical Corporation 2010 Stock Incentive Plan}
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