Exhibit 10.4

 

TRANSENTERIX, INC.
2020 ANNUAL PERFORMANCE-BASED
RESTRICTED STOCK UNIT AWARD AGREEMENT

 

This 2020 ANNUAL PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT (this
“Agreement”) dated as of [         ] (the “Date of Grant”), is made by
TransEnterix, Inc., a Delaware corporation (the “Company”), to [          ] (the
“Participant”).

 

RECITALS

 

The Amended and Restated Incentive Compensation Plan of the Company (the “Plan”)
provides for the issuance of equity awards to “Eligible Employees” of the
Company, and the Participant is an Eligible Employee under the Plan. Defined
terms used in this Agreement without definition have the meanings set forth in
the Plan.

 

The Board of Directors has determined that it is in the best interests of the
Company and its stockholders to grant the restricted stock unit award provided
for herein to the Participant pursuant to the terms set forth herein as an
incentive for the Participant to contribute to the Company’s future success and
prosperity.

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties hereto agree as follows:

 

1.            Award of the Restricted Stock Units.

 

(a)     The Company hereby grants to the Participant [          ] restricted
stock units (“Restricted Stock Units”), representing the right to receive an
equal number of shares of common stock of the Company (the “Shares”), upon the
lapse of forfeiture restrictions (“vesting”) of some or all of such Restricted
Stock Units, subject to the terms and conditions set forth in this Agreement.
[These Restricted Stock Units are subject to forfeiture if the stockholders do
not approve the proposal to increase the number of Shares available under the
Plan at the 2020 Annual Meeting.]

 

(b)     The Restricted Stock Units are awarded to the Participant as a Deferred
Stock Award under the Plan, and are subject to the terms and conditions set
forth in the Plan, including the discretion of the Committee under the Plan,
subject to any specific provisions set forth in this Agreement. A copy of the
Plan is attached to this Agreement and made a part hereof. Capitalized terms not
defined in this Agreement shall have the meanings set forth in the Plan.

 

(c)     Upon vesting of the Restricted Stock Units, the Restricted Stock Units
will be settled by a delivery of Shares. No dividend equivalents are authorized
as part of the award of these Restricted Stock Units.

 

(d)     Prior to vesting of the Restricted Stock Units pursuant to Sections 2 or
3 of this Agreement: (i) the Participant shall not be treated as a stockholder
as to Shares issuable to the Participant with respect to such Restricted Stock
Units, and shall only have a contractual right to receive such Shares following
such vesting, unsecured by any assets of the Company or its Subsidiaries;
(ii) the Participant shall not be permitted to vote the Restricted Stock Units
or the Shares issuable with respect to such Restricted Stock Units; and (iii)
the Participant’s right to receive such Shares following vesting of the
Restricted Stock Units shall be subject to the adjustment provisions set forth
in Section 10(c) of the Plan. The Restricted Stock Units shall be subject to all
of the restrictions hereinafter set forth.

 

 

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2.            Vesting.

 

(a)     Except as otherwise provided in Section 3 hereof, the Restricted Stock
Units shall vest one-third on each of
[                                               ] (each, a “Vesting Date”),
subject to the Participant’s Continuous Service through such Vesting Date and
subject to satisfaction of the Performance Vesting Factor. For purposes of this
Agreement, “Performance Vesting Factor” means that, during the performance
period beginning on [date of grant] and ending on the third anniversary of such
grant date (the “Performance Period”), the Company’s common stock closing price
must be equal to or exceed $1.00 for twenty consecutive trading days. If the
Performance Vesting Factor is achieved prior to the first Vesting Date, then the
Restricted Stock Units will vest in full and be earned on each Vesting Date. If
the Performance Vesting Factor is not earned before any Vesting Date, the
Restricted Stock Units that would vest on such Vesting Date shall be considered
vested but not earned until the Performance Vesting Factor is met. Any vested
but unearned Restricted Stock Units will fully vest and be earned on the next
Vesting Date by which the Performance Vesting Factor is satisfied, or, if later,
on the last day of the Performance Period; provided, that if the Participant has
vested but unearned Restricted Stock Units and ceases providing Continuous
Service during the Performance Period for any reason other than termination for
Cause, but after the date the Performance Vesting Factor is satisfied, the
vested but unearned Restricted Stock Units will fully vest and be earned and
will be paid on the date of termination of service. If the Performance Vesting
Factor is not satisfied by the end of the Performance Period, the Restricted
Stock Units shall be forfeited and shall not vest. The Performance Vesting
Factor shall be adjusted if the Company engages in any stock split, reverse
stock split or other capitalization affecting all common stock during the
Performance Period.

 

(b)     Notwithstanding any other provision of the Plan or this Agreement to the
contrary, until the restrictions set forth in this Section 2 have lapsed, the
Restricted Stock Units may not be transferred, assigned or otherwise encumbered
other than in accordance with the applicable provisions of Section 6 hereof.

 

3.            Change in Control. The provisions of Article 9 of the Plan shall
apply to the Restricted Stock Units under this Agreement.

 

4.            Issuance of Certificates. Following the applicable vesting date
with respect to the Restricted Stock Units, and subject to the terms and
conditions of the Plan, the Company will issue a stock certificate for the
Shares issuable with respect to such vested Restricted Stock Units. Such
issuance shall take place as soon as practicable following the applicable
vesting date (but in no event later than two and one-half months following the
end of the calendar year in which the vesting date occurs). The certificates
representing the Shares issued in respect of the Restricted Stock Units shall be
subject to such stop transfer orders and other restrictions as the Committee may
determine is required by the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which such Shares
are listed, any applicable federal or state laws and the Company’s Certificate
of Incorporation and Bylaws, and the Committee may cause a legend or legends to
be put on any such certificates to make appropriate reference to such
restrictions. If no such stop transfer orders or other restrictions are
determined to be necessary, the Shares can be issued in book-entry form.

 

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5.         No Right to Continued Employment. Neither the Plan nor this Agreement
shall confer on the Participant any right to be retained, in any position, as an
employee, consultant or director of the Company.

 

6.         Transferability.

 

(a)     The Restricted Stock Units are not transferable and may not be sold,
assigned, transferred, disposed of, pledged or otherwise encumbered by the
Participant, other than by will or the laws of descent and distribution. Upon
such transfer (by will or the laws of descent and distribution), such transferee
in interest shall take the rights granted herein subject to all the terms and
conditions hereof.

 

(b)     Subject to Section 6(a) hereof, in order to comply with any applicable
securities laws, the Participant agrees that the Shares issued to the
Participant with respect to vested Restricted Stock Units shall only be sold by
the Participant following registration of such Shares under the Securities Act
of 1933, as amended, or pursuant to an exemption therefrom.

 

7.          Withholding. The Participant shall pay to the Company promptly upon
request, and in any event at the time the Participant recognizes taxable income
in respect of the Restricted Stock Units, an amount equal to the federal, state
or local taxes the Company determines it is required to withhold with respect to
the Restricted Stock Units. Such payment shall be made in the form of cash,
Shares already owned for at least six months, having the Company withhold from
the Shares which would otherwise be delivered to the Participant hereunder
Shares with a Fair Market Value sufficient to satisfy the minimum withholding
required with respect thereto to the extent permitted by the Company, or in a
combination of such methods, as irrevocably elected by the Participant prior to
the applicable tax due date with respect to such Restricted Stock Units. The net
settlement of the Shares underlying the vested Restricted Stock Units and the
delivery of Shares previously owned are hereby specifically authorized
alternatives for the satisfaction of the foregoing withholding obligation.

 

8.          Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law provisions thereof.

 

9.          Amendments. This Agreement may be amended or modified at any time by
an instrument in writing signed by the parties hereto, except as otherwise
provided in Section 12 of this Agreement regarding permitted unilateral action
by the Committee or in Section 10(e) of the Plan related to amendments or
alterations that do not adversely affect the rights of the Participant in this
Award.

 

10.        Administration. This Agreement shall at all times be interpreted in
accordance with the terms and conditions of the Plan as if set forth herein. The
Committee shall have sole and complete discretion under this Agreement with
respect to all matters reserved to it by the Plan and decisions of the Committee
with respect thereto and this Agreement shall be final and binding upon the
Participant and the Company. In the event of any conflict between the terms and
conditions of this Agreement and the Plan, the provisions of this Agreement
shall control. The Committee has the authority and discretion to determine any
questions which arise in connection with the award of the Restricted Share Units
hereunder.

 

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11.        Compliance with Code Section 409A. It is the intention of the Company
and Participant that this Agreement not result in an unfavorable tax
consequences to Participant under Code Section 409A. Accordingly, Participant
consents to any amendment of this Agreement as the Company may reasonably make
in furtherance of such intention, and the Company shall make available to the
Participant a copy of such amendment. Any such amendments shall be made in a
manner that preserves to the maximum extent possible the intended benefits to
Participant. This paragraph does not create an obligation on the part of Company
to modify this Agreement and does not guarantee that the amounts or benefits
owed under the Agreement will not be subject to interest and penalties under
Code Section 409A.

 

12.        Imposition of Other Requirements. The Company reserves the right to
impose other requirements on the Restricted Stock Units and on any Shares
acquired under the Plan, to the extent the Company determines it is necessary or
advisable in order to comply with local law or facilitate the administration of
the Award, and to require the Participant to sign any additional agreements or
undertakings that may be necessary to accomplish the foregoing. The Participant
agrees, upon demand of the Company or the Committee, to do all acts and execute,
deliver and perform all additional documents, instruments and agreements which
may be reasonably required by the Company or the Committee, as the case may be,
to implement the provisions and purposes of this Agreement.

 

13.        Notices. Any notice, request, instruction or other document given
under this Agreement shall be in writing and may be delivered by such method as
may be permitted by the Company, and shall be addressed and delivered, in the
case of the Company, to the Secretary of the Company at the principal office of
the Company and, in the case of the Participant, to the Participant’s address as
shown in the records of the Company or to such other address as may be
designated in writing (or by such other method approved by the Company) by
either party.

 

14.        Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of the Agreement shall be
severable and enforceable to the extent permitted by law.

 

[Signatures on the following page.]

 

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IN WITNESS WHEREOF, the Company and the Participant hereby execute this
Agreement.

 

  TRANSENTERIX, INC.                     By:       Name: Anthony Fernando    
Title: President and Chief Executive Officer     Date:                          
   

Accepted:

 

PARTICIPANT

                            By:       Name:     Date:    

 

 

[Form Annual PRSU Award]