Exhibit 10.3
SURMODICS, INC.
2009 EQUITY INCENTIVE PLAN
Non-Statutory Stock Option Agreement*
 

     
Full Name of Participant:
   
 
   
Number of Shares Covered:
  Grant Date:
 
   
Exercise Price Per Share:
  Expiration Date:
 
   
 
  Number of Share(s) as to Which
Exercise Schedule (cumulative):
  Option Becomes Exercisable
 
   
Date(s) of Exercisability
   

This is a Non-Statutory Stock Option Agreement (this “Agreement”), effective as
of the Grant Date specified in the table above, between SurModics, Inc., a
Minnesota corporation (the “Company”), and the Participant identified in the
table above.
Recitals
     WHEREAS, the Company maintains the SurModics, Inc. 2009 Equity Incentive
Plan (the “Plan”);
     WHEREAS, the Board of Directors of the Company has appointed the
Organization and Compensation Committee (the “Committee”) to administer the Plan
and determine the Awards to be granted under the Plan; and
     WHEREAS, the Committee or its designee has determined that the Participant
is eligible to receive an Award under the Plan in the form of a Non-Statutory
Stock Option (the “Option”);
     NOW, THEREFORE, the Company hereby grants this Option to the Participant
subject to the following terms and conditions:
 

*    Any capitalized term used in this Agreement will have the meaning set forth
in this Agreement (including the table at the beginning of this Agreement) or,
if not defined in this Agreement, set forth in the Plan as it currently exists
or as it is amended in the future.

 

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Terms and Conditions

1.   Grant. Subject to the terms of the Plan, the Participant is granted an
Option to purchase the number of Shares specified in the table at the beginning
of this Agreement.

2.   Exercise Amount. The purchase price to the Participant for each Share
subject to this Option will be the Exercise Price Per Share specified in the
table at the beginning of this Agreement. The aggregate of the Exercise Price
Per Share multiplied by the number of Shares exercised, plus the amount of any
tax withholding as provided in Section 15 of the Plan, will be the “Exercise
Amount.”

3.   Not an Incentive Stock Option. This Option is not intended to be an
“incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”).

4.   Exercise Schedule. Subject to the terms of the Plan, the Option will vest
and become exercisable as to the number of Shares and on the dates specified in
the Exercise Schedule at the beginning of this Agreement. The Exercise Schedule
is cumulative, meaning that to the extent the Option has not already been
exercised and has not expired, terminated, or been cancelled, the Participant
(or that Participant’s Successor or Transferee) may exercise the Option and
purchase all or any portion of the Shares then exercisable under the Exercise
Schedule.

5.   Expiration. This Option will expire at 4:00 p.m. Central Time on the
earliest of:

  (a)   the Expiration Date specified in the table at the beginning of this
Agreement (which date will not be later than seven years after the Grant Date);
    (b)   the last day of the period after the termination of Participant’s
Service during which the Option can be exercised (as specified in Section 7 of
this Agreement); or     (c)   the date the Participant’s Service is terminated
for Cause.

     No one may exercise this Option after it has expired, notwithstanding any
other provision of this Agreement.

6.   Procedure to Exercise Option.

  (a)   Notice of Exercise. This Option may be exercised by delivering written
notice of exercise to the Company at its headquarters in the form attached to
this Agreement or a similar form containing substantially the same information
and addressed or delivered to the Corporate Controller of the Company, or to the
Company’s outside Plan administrator if one has been appointed (the “Notice of
Exercise”). The Notice of Exercise will state the election to exercise the
Option, the number of Shares to be purchased, and will be signed by the person
exercising this Option. If the person exercising this Option is a Successor or
Transferee of the Participant, he or she must also submit appropriate proof of
his or her right to exercise this Option.

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  (b)   Tender of Payment. Upon submitting a Notice of Exercise to the Company,
the Participant will provide for payment of the Exercise Amount through one or a
combination of the following methods:

  (1)   cash (including check, bank draft, or money order payable to the
Company);     (2)   to the extent permitted by law, a broker-assisted cashless
exercise in which the Participant irrevocably instructs a broker to deliver to
the Company proceeds of a sale of all or a portion of the Shares to be issued
pursuant to the exercise (or a loan secured by such Shares) in payment of the
Exercise Amount;     (3)   by delivery to the Company of unencumbered Shares
having an aggregate Fair Market Value on the date of exercise equal to the
Exercise Amount; or     (4)   by authorizing the Company to retain, from the
total number of Shares as to which the Option is exercised, that number of
Shares having an aggregate Fair Market Value on the date of exercise equal to
the Exercise Amount.

      Notwithstanding the other terms of this subparagraph, the Participant will
not be permitted to pay any portion of the Exercise Amount with Shares (either
delivered to the Company or withheld by the Company), if the Committee, in its
sole discretion, determines that payment in such manner is undesirable.

  (c)   Delivery of Shares. As soon as practicable after the Company receives a
Notice of Exercise and the Exercise Amount provided for above, the Company will
deliver to the person exercising the Option, in the name of such person, the
Shares being purchased (net of the number of Shares sold or withheld, if any, to
pay the Exercise Amount), as evidenced by issuance of a stock certificate or
certificates, electronic delivery of such Shares to a brokerage account
designated by such person, or book-entry registration of such Shares with the
Company’s transfer agent. The Company will pay any original issue or transfer
taxes with respect to the issue or transfer of the Shares and all fees and
expenses incurred by it in connection therewith. All Shares so issued will be
fully paid and nonassessable.         Notwithstanding anything to the contrary
in this Agreement, the Company will not be required to issue or deliver any
Shares before the completion of such registration or other qualification of such
Shares under any state law, rule, or regulation as the Company determines to be
necessary or desirable.

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7.   Employment Requirement. This Option may be exercised only if the
Participant has continuously provided Service to the Company or an Affiliate
since the Grant Date and continues to provide Service on the exercise date.
However, the Option may be exercised after termination of the Participant’s
Service (but in no event after the expiration of the Option) in the following
situations:

  (a)   The Option may be exercised within six months of termination of
Participant’s Service because of death or Disability, but only to the extent
that the Option was exercisable immediately prior to the termination of Service.
    (b)   The Option may be exercised within three months of termination of
Participant’s Service for any reason other than death, Disability or Cause, but
only to the extent that the Option was exercisable immediately prior to the
termination of Service.     (c)   If the Participant’s Service terminates after
a declaration made pursuant to Section13 of the Plan in connection with a
Corporate Transaction, the Option may be exercised at any time permitted by such
declaration.     (d)   For greater certainty, no cash or other compensation will
be paid to any person in respect of an Option that the Participant may forfeit,
in whole in or in part, or which otherwise ceases to be exercisable, on account
of damages or otherwise relating to the forfeiture or non-exercise of any such
Option.

8.   Limitation on Transfer. While the Participant is alive, only the
Participant (or a Successor or Transferee) may exercise the Option. The Option
may not be sold, assigned or transferred other than by will or the laws of
descent and distribution or pursuant to a divorce decree or qualified domestic
relations order as defined by the Code, or Title I of ERISA. Any attempt to
assign, transfer, pledge, hypothecate, or otherwise dispose of this Option
contrary to the provisions hereof, and the levy of any attachment or similar
process upon this Option, will be void.

9.   No Stockholder Rights Before Exercise. No Participant, Successor, or
Transferee will have any rights as a stockholder with respect to any securities
covered by an Award unless and until the date the Participant, Successor, or
Transferee becomes the holder of record of the Shares, if any, to which the
Award relates.

10.   Adjustment for Changes in Capitalization. If an “equity restructuring” (as
defined in Section 17 of the Plan) occurs that causes the per share value of the
Shares to change, the Committee will make such equitable adjustments to the
Option as are contemplated by Section 17 of the Plan in order to avoid dilution
or enlargement of your rights hereunder. The Committee may make such equitable
adjustments to this Option as and to the extent provided in Section 17 of the
Plan in connection with other changes in the Company’s capitalization
contemplated by Section 17 of the Plan.

11.   Tax Withholding. Delivery of Shares upon exercise of this Option shall be
subject to any required withholding taxes. As a condition precedent to receiving
Shares upon exercise of this Option, the Participant may be required to pay to
the Company, in

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    accordance with the provisions of the Plan, an amount equal to the amount of
any required withholdings. Subject to any rules or limitations the Committee may
adopt, the Participant may cover all or any part of any required withholdings
(up to the Participant’s minimum required tax withholding rate or such other
rate that will not trigger a negative accounting impact to the Company or any
Affiliate) through a reduction in the number of Shares delivered pursuant to the
exercise of this Option or delivery or tender to the Company of Shares held by
the Participant, in each case valued in the same manner as used in computing the
withholding taxes under applicable laws.

12.   Interpretation of This Agreement. All decisions and interpretations made
by the Committee with regard to any question arising under this Agreement or the
Plan will be binding and conclusive upon the Company and the Participant (or
that Participant’s Successor or Transferee). If there is any inconsistency
between the provisions of this Agreement and the Plan, the provisions of the
Plan will govern.

13.   Discontinuance of Employment. Neither this Agreement, the Plan, nor the
Option will confer on the Participant any right with respect to continued
Service with the Company or any of its Affiliates, nor interfere in any way with
the right of the Company or any Affiliate to terminate such Service. Nothing in
this Agreement will be construed as creating an employment contract for any
specified term between Participant and the Company or any Affiliate. Neither any
period of notice, if any, nor any payment in lieu thereof, upon termination of
Service, wrongful or otherwise, will be considered as extending Participant’s
period of Service for the purposes of the Plan or any Option granted thereunder.

14.   Obligation to Reserve Sufficient Shares. The Company will at all times
during the term of this Option reserve and keep available a sufficient number of
Shares to satisfy this Agreement.

15.   Binding Effect. This Agreement will be binding in all respects on the
heirs, representatives, successors and assigns of the Participant (and included
for the sake of clarification, a Successor or Transferee of the Participant).

16.   Choice of Law. This Agreement is entered into under the laws of the State
of Minnesota and will be construed and interpreted thereunder (without regard to
its conflict-of-law principles).

17.   Entire Agreement. This Agreement and the Plan set forth the entire
agreement and understanding of the parties hereto with respect to the grant and
exercise of this Option and the administration of the Plan and supersede all
prior agreements, arrangements, plans, and understandings relating to the grant
and exercise of this Option and the administration of the Plan.

18.   Amendment and Waiver. Except as provided in the Plan, this Agreement may
be amended, waived, modified, or canceled only by a written instrument executed
by the parties or, in the case of a waiver, by the party waiving compliance.

19.   Acknowledgment of Receipt of Copy. By execution hereof, the Participant
acknowledges having received a copy of the Plan.

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     IN WITNESS WHEREOF, the Participant and the Company have executed this
Agreement as of the                      day of
                                                             ,
                    .

            SURMODICS, INC.
    PARTICIPANT   By                     Participant    Name              Its   
         

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Attachment 1
__________________, ______
SurModics, Inc.
9924 West 74th Street
Eden Prairie, Minnesota 55344
Attention: Corporate Controller
Ladies and Gentlemen:
     I hereby exercise the following option (the “Option”) granted to me with
respect to the number of shares of Common Stock, par value $.05 (“Shares”), of
SurModics, Inc. (the “Company”), indicated below:

          Participant’s Name:              Grant Date:             Exercise
Price Per Share:                     Number of Shares With Respect to Which the
Option is Hereby Exercised:                 Exercise Price:    

    o  Enclosed with this letter is a check, bank draft or money order in the
amount of the Exercise Price.       o  Enclosed with this letter is a
certificate evidencing unencumbered Shares (duly endorsed in blank) having an
aggregate Fair Market Value equal to or in excess of the Exercise Price.      
o  I hereby authorize the Company to retain, from the total number of Shares as
to which the Option is exercised, that number of Shares having an aggregate Fair
Market Value on the date of exercise equal to the Exercise Amount, subject to
the sole discretion of the Committee to determine whether such manner of payment
is undesirable.       o  I hereby agree to pay the Exercise Price within five
business days of the date hereof and, as stated in the attached Broker’s Letter,
I have delivered irrevocable instructions to
                                                             to promptly deliver
to the Company the amount of sale or loan proceeds from the Shares to be issued
pursuant to this exercise necessary to satisfy my obligation hereunder to pay
the Exercise Price.

 

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Tax Withholding

  o    I intend to pay any required withholding taxes in cash.

  o    I intend to pay any required withholding taxes in whole or in part with
Shares, subject to the sole discretion of the Committee to determine whether
such manner of payment is undesirable.

     If I am enclosing Shares with this letter, I hereby represent and warrant
that I am the owner of such Shares free and clear of all liens, security
interests and other restrictions or encumbrances. I agree that I will pay any
required withholding taxes in connection with this exercise.
     Please issue a certificate (the “Certificate”) for the number of Shares
with respect to which the Option is being exercised in the name of the person
indicated below and deliver the Certificate to the address indicated below:

          Name in Which to Issue Certificate:    
 
                        Address to Which Certificate Should be Delivered:  
 
                                                                               
Principal Mailing Address for
Holder of the Certificate (if different from above):                            
                               

              Very truly yours,
               Signature                          Name, please print

      Social Security Number

   

2

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Attachment 2
__________________, _____
SurModics, Inc.
9924 West 74th Street
Eden Prairie, Minnesota 55344
Attention: Corporate Controller
Ladies and Gentlemen:

          Name of Participant:      
 
              Grant Date:        
 
              Exercise Price Per Share:      
 
              Number of Shares With Respect to
Which the Option is to be Exercised:      
 
              Exercise Price:                    

     The above Participant has requested that we finance the exercise of the
above Option to purchase Shares of common stock of SurModics, Inc. (the
“Company”) and has given us irrevocable instructions to promptly deliver to the
Company the amount of sale or loan proceeds from the Shares to be issued
pursuant to such exercise to satisfy the Participant’s obligation to pay the
Exercise Price.

            Very truly yours,
            Broker Name

      By