Exhibit 10.4

 

TRANSENTERIX, INC.

 

EMPLOYMENT INDUCEMENT STOCK OPTION AWARD AGREEMENT

 

 

1.          Grant of Option. TRANSENTERIX, INC. (the “Company”) hereby grants,
as of August 24, 2020 (the “Date of Grant”), to Shameze Rampertab (the
“Optionee”) a non-qualified stock option (the “Option”) to purchase up to
150,000 shares of the Company’s common stock, par value $0.001 per share (the
“Shares”), at an exercise price per share equal to $0.42 (the “Exercise Price”).
The Option is an employment inducement award exempt from the stockholder
approval requirements under the NYSE American Company Guide Section 711(a). This
Employment Inducement Stock Option Award Agreement (the “Option Agreement”),
along with other Employment Inducement awards made to the Optionee as of the
Date of Grant shall collectively constitute the “Plan” for purposes of the NYSE
American rules, the Ontario Employment Standards Act, 2000 (“ESA”) and, if
applicable, the securities regulations and laws of Ontario. The provisions set
forth in the TransEnterix, Inc. Amended and Restated Incentive Compensation
Plan, including its appendices, as adopted or amended from time to time (the
“TransEnterix Plan”) relating to non-qualified stock options that are not set
forth in this Option Agreement are hereby deemed incorporated by reference in
this Plan. The Optionee hereby acknowledges receipt of a copy of the Plan and
the TransEnterix Plan, and agrees to be bound by all of the terms and conditions
hereof and thereof and all applicable laws and regulations.

 

2.           Definitions. Capitalized terms used herein and not otherwise
defined shall have the respective meanings ascribed thereto in the TransEnterix
Plan; provided, however, that the following changes apply to this Plan:

 

(a)     the definition of “Disability” for purposes of this Plan is set forth in
the Employment Agreement between the Optionee and TransEnterix Canada, Inc.,
entered into on August 14, 2020 (the “Employment Agreement”) and not in the
TransEnterix Plan;

 

(b)      the definition of “Continuous Service” in the TransEnterix Plan is
amended to also refer to any ESA job-protected leave as a leave that does not
interrupt such Continuous Service; and

 

(c)     the definition of “Termination of Employment” for purposes of this Plan
is set forth in the Employment Agreement and not in the TransEnterix Plan.

 

3.          Exercise Schedule. Except as otherwise provided in Sections 6 or 9
of this Option Agreement, or in the TransEnterix Plan, the Option shall vest and
be exercisable one-third of the award on each of August 24, 2021, 2022 and 2023
(each, a “Vesting Date”), subject to Optionee’s Continuous Service through such
Vesting Date. Upon the termination of the Optionee’s Continuous Service prior to
a Vesting Date, the unvested portion of this Option shall terminate and be null
and void.

 

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4.           Method of Exercise. The vested portion of this Option shall be
exercisable, in whole or in part, by written notice, which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised, and such other representations and agreements as to
the holder’s investment intent with respect to such Shares as may be required by
the Company pursuant to the provisions of the TransEnterix Plan. Such written
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised after both (a) receipt by the Company of such written notice
accompanied by the Exercise Price and (b) arrangements that are satisfactory to
the Committee in its sole discretion have been made for Optionee’s payment to
the Company of the amount, if any, that is necessary to be withheld in
accordance with applicable federal, state, provincial or local withholding
requirements. No Shares shall be issued pursuant to the Option unless and until
such issuance and such exercise complies with all relevant provisions of
applicable law, including the requirements of any stock exchange upon which the
Shares may then be traded.

 

5.         Method of Payment. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; (c) to the extent permitted by the Committee, with Shares owned
by the Optionee, or the withholding of Shares that otherwise would be delivered
to the Optionee as a result of the exercise of the Option; (d) pursuant to a
“cashless exercise” procedure, by delivery of a properly executed exercise
notice together with such other documentation, and subject to such guidelines,
as the Committee shall require to effect an exercise of the Option and delivery
to the Company by a licensed broker acceptable to the Company of proceeds from
the sale of Shares or a margin loan (to the extent available to the Optionee)
sufficient to pay the Exercise Price and any applicable income or employment
taxes; or (e) such other consideration or in such other manner as may be
determined by the Committee in its absolute discretion.

 

6.           Termination of Option.

 

(a)          General. Any vested and unexercised portion of the Option shall
automatically and without notice terminate and become null and void at the time
of the earliest of the following to occur:

 

(i)     unless the Committee otherwise determines in writing in its sole
discretion, on the later of (i) the end of the minimum statutory notice of
termination period required by the ESA (if applicable) if the Optionee is
entitled to notice of termination of employment by the Company pursuant to the
ESA, or (ii) three months after the date on which the Optionee’s Continuous
Service terminates, other than by reason of (A) by the Company or a Related
Entity for Cause, (B) a Disability of the Optionee as determined by a medical
doctor satisfactory to the Committee, or (C) the death of the Optionee;

 

(ii)     immediately upon the termination of the Optionee’s Continuous Service
by the Company or a Related Entity for Cause, or on the expiry of the minimum
notice of termination period required by the ESA (if applicable) if, despite the
“Cause”, the Optionee is entitled to notice of termination pursuant to the ESA;

 

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(iii)     twelve months after the date on which the Optionee’s Continuous
Service is terminated by reason of a Disability as determined by a medical
doctor satisfactory to the Committee;

 

(iv)     (A) twelve months after the date of termination of the Optionee’s
Continuous Service by reason of the death of the Optionee, or, if later, (B)
three months after the date on which the Optionee dies if such death occurs
during the one year period specified in Section 6(a)(iii) hereof; or

 

(v)     the seventh (7th) anniversary of the date as of which the Option is
granted.

 

(b)        Cancellation. To the extent not previously exercised, (i) the Option
shall terminate immediately in the event of (A) the liquidation or dissolution
of the Company, or (B) any reorganization, merger, consolidation or other form
of corporate transaction in which the Company does not survive or the Shares are
exchanged for or converted into securities issued by another entity, or an
affiliate of such successor or acquiring entity, unless the successor or
acquiring entity, or an affiliate thereof, assumes the Option or substitutes an
equivalent option or right pursuant to Section 9(b) of the TransEnterix Plan,
and (ii) the Committee in its sole discretion may by written notice
(“cancellation notice”) cancel, effective upon the consummation of any
transaction that constitutes a Change in Control, the Option (or portion
thereof) that remains unexercised on such date. The Committee shall give written
notice of any proposed transaction referred to in this Section 6(b) a reasonable
period of time prior to the closing date for such transaction (which notice may
be given either before or after approval of such transaction), in order that the
Optionee may have a reasonable period of time prior to the closing date of such
transaction within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may become
exercisable upon the closing date of such transaction). The Optionee may
condition his or her exercise of the Option upon the consummation of a
transaction referred to in this Section 6(b).

 

7.         Transferability. Unless otherwise determined by the Committee, the
Option is not transferable, and, during the lifetime of the Optionee, the Option
shall be exercisable only by the Optionee, or the Optionee’s guardian or legal
representative. In addition, the Option shall not be assigned, negotiated,
pledged or hypothecated in any way (whether by operation of law or otherwise),
and the Option shall not be subject to execution, attachment or similar process.
Upon any attempt to transfer, assign, negotiate, pledge or hypothecate the
Option, or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option
shall immediately become null and void. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee. Notwithstanding the foregoing or anything in the Plan, the Optionee
hereby acknowledges that he may not dispose of any Option or Share issuable upon
the exercise of the Option other than in accordance with applicable securities
laws.

 

8.           No Stockholder Rights. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any Shares issuable
upon the exercise of the Option, in whole or in part, prior to the date on which
the Shares are issued.

 

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9.           Acceleration of Exercisability of Option.

 

(a)          Acceleration upon Certain Terminations or Cancellations of Option.
This Option shall become immediately fully exercisable prior to the termination
of the Option pursuant to Section 6 hereof, in the event that, (i) the Option
will be terminated pursuant to Section 6(b)(i) hereof, or (ii) the Company
exercises its discretion to provide a cancellation notice with respect to the
Option pursuant to Section 6(b)(ii) hereof.

 

(b)          Acceleration upon Change in Control. This Option shall become
immediately fully exercisable in the event that, prior to the termination of the
Option pursuant to Section 6 hereof, and during the Optionee’s Continuous
Service, there is a “Change in Control,” as defined in Section 9(b) of the
TransEnterix Plan and the Optionee’s employment is terminated, other than for
Cause, in connection with or as a result of such Change in Control.

 

(c)          Exception to Acceleration upon Change in Control. Notwithstanding
the foregoing, if in the event of a Change in Control the successor company
assumes or substitutes for the Option, the vesting of the Option shall not be
accelerated as described in Section 9(b). For the purposes of this paragraph,
the Option shall be considered assumed or substituted for if following the
Change in Control the Option or substituted option confers the right to
purchase, for each Share subject to the Option immediately prior to the Change
in Control, the consideration (whether stock, cash or other securities or
property) received in the transaction constituting a Change in Control by
holders of Shares for each Share held on the effective date of such transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the transaction
constituting a Change in Control is not solely common stock of the successor
company or its parent or subsidiary, the Committee may, with the consent of the
successor company, or its parent or subsidiary, provide that the consideration
to be received upon the exercise or vesting of the Option will be solely common
stock of the successor company or its parent or subsidiary substantially equal
in Fair Market Value to the per share consideration received by holders of
Shares in the transaction constituting a Change in Control. The determination of
such substantial equality of value of consideration shall be made by the
Committee in its sole discretion and its determination shall be conclusive and
binding. Notwithstanding the foregoing, on such terms and conditions as may be
set forth in an Award Agreement, in the event of a termination of the Optionee’s
employment in such successor company (other than for Cause) within 24 months
following such Change in Control, the option held by the Optionee at the time of
the Change in Control shall be accelerated as described in paragraph (b) of this
Section 9.

 

10.         Representations and Warranties of Optionee. The Optionee represents
and warrants that (i) he is an employee of the Company and/or a Subsidiary, and
(ii) his participation in this distribution is voluntary.

 

11.        Prospectus Exemption. For purposes of compliance with National
Instrument 45-106 - Prospectus Exemptions, the prospectus requirement does not
apply to a distribution by an issuer in a security of its own issue with an
employee, executive officer, director or consultant of the issuer or a related
entity of the issuer provided participation in the distribution is voluntary,
and accordingly, the Options, and Shares issuable upon exercise of the Options,
acquired under the Plan are acquired pursuant to the prospectus exemptions under
Ontario securities laws.

 

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12.       Resale Restrictions. Shares issuable upon exercise of the Options are
subject to certain restrictions on resale imposed by Ontario securities laws.
Notwithstanding any provision of the Plan to the contrary, any transfer or
resale of any Shares issuable upon exercise of the Options must be in accordance
with the resale rules under Ontario Securities Commission Rule 72-503
Distributions Outside of Canada (“72-503”), if the Optionee is a resident in the
Province of Ontario. In Ontario, the prospectus requirement does not apply to
the first trade of shares issued in connection with the exercise of the Options,
provided the conditions set forth in section 2.8 of 72-503 are satisfied. The
Optionee is advised to consult their legal advisor prior to any resale of
Shares.

 

12.         No Right to Continued Employment. Neither the Option nor this Option
Agreement shall confer upon the Optionee any right to continued employment or
service with the Company.

 

13.         Governing Law. This Option Agreement shall be governed in accordance
with and by the internal laws of the State of Delaware; provided, however, that
the applicable provisions of ESA and the securities regulations and the laws of
the Province of Ontario, and the Federal laws of Canada applicable therein,
shall control to the extent required by such laws.

 

14.        Interpretation / Provisions of Plan Control. This Option Agreement is
subject to all the terms, conditions and provisions of the TransEnterix Plan,
including, without limitation, the amendment provisions thereof, and to such
rules, regulations and interpretations relating to the TransEnterix Plan adopted
by the Committee as may be in effect from time to time. If and to the extent
that this Option Agreement conflicts or is inconsistent with the terms,
conditions and provisions of the TransEnterix Plan, the TransEnterix Plan shall
control, and this Option Agreement shall be deemed to be modified accordingly.
The Optionee accepts the Option subject to all of the terms and provisions of
the Plan, the TransEnterix Plan and this Option Agreement. The undersigned
Optionee hereby accepts as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan, the
TransEnterix Plan and this Option Agreement, unless shown to have been made in
an arbitrary and capricious manner.

 

15.         Notices. Any notice under this Option Agreement shall be in writing
and shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail or the Canada Post, registered, postage
prepaid, and addressed, in the case of the Company, to the Company’s Secretary
at 635 Davis Drive, Suite 300, Morrisville, NC 27560, or if the Company should
move its principal office, to such principal office, and, in the case of the
Optionee, to the Optionee’s last permanent address as shown on the Company’s
records, subject to the right of either party to designate some other address at
any time hereafter in a notice satisfying the requirements of this Section.

 

Signatures Follow on Next Page

 

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Option Grant No.:__________

 

IN WITNESS WHEREOF, the undersigned have executed this Option Agreement as of
the date first set forth above.

 

  COMPANY:             TRANSENTERIX, INC.                     By: /s/ Anthony
Fernando             Name: Anthony Fernando             Title: President and
Chief Executive Officer  

 

The Optionee acknowledges receipt of a copy of the Plan and the TransEnterix
Plan and represents that he or she has reviewed the provisions of the Plan, the
TransEnterix Plan and this Option Agreement in their entirety, is familiar with
and understands their terms and provisions, and hereby accepts this Option
subject to all of the terms and provisions of the Plan, the TransEnterix Plan
and this Option Agreement. The Optionee further represents that he has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement.

 

  OPTIONEE:                       /s/ Shameze Rampertab             Name:
Shameze Rampertab  

 

GRANT SUMMARY

             

Grant Date:

August 24, 2020

Expiration Date:

August 24, 2027

       

Grant Type:

NQSO

Optionee Class:

Employee

       

Number of Shares:

150,000

Exercise Price:

$0.42 per share

       

Vesting Dates:

One-third on each of August 24, 2021, 2022 and 2023

Number or % Vesting:

One-third on each vesting date

 

 

[Inducement Stock Option Award]