Exhibit 10.3

ROCHESTER MEDICAL CORPORATION

2010 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

This RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”) is made this     
day of     ,     , by and between Rochester Medical Corporation, a Minnesota
corporation (the “Company”) and     , an individual resident of
                    ,                     (“Employee”).

1. Award. The Company hereby grants to Employee an award of                
restricted stock units (the “RSUs”), each RSU representing the right to receive
one share of Common Stock, without par value per share, of the Company according
to the terms and conditions set forth herein and in the Rochester Medical
Corporation 2010 Stock Incentive Plan (as adopted, amended and currently in
effect, the “Plan”). 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 Employee.

2. Vesting; Forfeiture.

(a) The “Performance Period” for purposes of determining the vested RSUs shall
be [                    ]. The performance goals for purposes of determining the
vested RSUs are set forth in the attached Exhibit A. Except as otherwise
provided in this Agreement, the number of RSUs that shall vest will be based on
whether and to what extent the performance goals are achieved, as set forth in
the attached Exhibit A and as determined by the Compensation Committee of the
Company’s Board of Directors (the “Committee”) in its sole discretion. The
determination of the number of vested RSUs will occur as soon as practicable
after the Committee determines, in its sole discretion after the end of the
Performance Period, whether, and the extent to which, the performance goals have
been achieved; provided that in no event will such determination be made later
than 60 days following the end of the Performance Period (the “Determination
Date”).

(b) If Employee ceases to be an employee of the Company or any Affiliate prior
to vesting of the RSUs pursuant to Section 2(a) or Section 5 hereof, all of
Employee’s rights to all of the unvested RSUs shall be immediately and
irrevocably forfeited, except that (i) if Employee ceases to be an employee by
reason of permanent and total disability prior to the vesting of RSUs under
Section 2(a) or Section 5 hereof, or (ii) if Employee ceases to be an employee
by reason of death prior to the vesting of RSUs under Section 2(a) or Section 5
hereof, Employee or the Employee’s estate, as applicable, shall be entitled to
retain the RSUs through the end of the Performance Period and shall vest on the
Determination Date to the extent that the performance goals are achieved, as set
forth in the attached Exhibit A and as determined by the Committee in its sole
discretion. Upon forfeiture, Employee will no longer have any rights relating to
the unvested RSUs.

[Employee – Performance Stock Units]

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3. Restrictions on Transfer. The RSUs shall not be transferable other than by
will or by the laws of descent and distribution. Until the date that the RSUs
vest pursuant to Section 2 or Section 5 hereof and the shares of Common Stock
issuable upon vesting thereof (the “Shares”) are issued, none of the Shares may
be sold, assigned, transferred, pledged, attached or otherwise encumbered, and
any purported sale, assignment, transfer, pledge, attachment or encumbrance
shall be void and unenforceable against the Company, and no attempt to transfer
the Shares, whether voluntarily or involuntarily, by operation of law or
otherwise, shall vest the purported transferee with any interest or right in or
with respect to the Shares.

4. Adjustments. If any RSUs vest subsequent to any change in the number or
character of the Common Stock of the Company (through any stock dividend or
other distribution, recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of shares, or otherwise), Employee shall then receive
upon such vesting the number and type of securities or other consideration which
Employee would have received if such RSUs had vested prior to the event changing
the number or character of the outstanding Common Stock.

5. Acceleration of Vesting Upon Change In Control. Notwithstanding any other
provision in this Agreement, in the event of a “Change in Control” prior to the
end of the Performance Period, the Performance Period shall be deemed to end on
the date of the Change in Control and the Employee shall be entitled to retain
the RSUs which shall vest on the Determination Date to the extent that the
performance goals are achieved, as adjusted for the truncated Performance Period
and determined by the Committee in its sole discretion. 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 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.

 

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6. Miscellaneous.

(a) Issuance of Shares. No stock certificates shall be issued to Employee prior
to the Determination Date in accordance with Section 2 or Section 5 hereof.
After such date, and following payment of the applicable withholding taxes
pursuant to Section 6(b) hereof, the Company shall cause the Shares to be issued
in the name of Employee, either by book-entry registration or issuance of a
stock certificate or certificates evidencing the Shares, which certificate or
certificates shall be delivered to Employee or Employee’s legal representatives,
beneficiaries or heirs, as the case may be.

(b) 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 Employee, are withheld
or collected from Employee.

(ii) In accordance with the terms of the Plan, and such rules as may be adopted
under the Plan, Employee may elect, subject to the consent of the Committee, to
satisfy Employee’s federal and state income tax withholding obligations arising
from the receipt of, or the lapse of restrictions relating to, the Shares, 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 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 Employee having a Fair Market Value equal to the amount of such
taxes. Any such shares already owned by Employee shall have been owned by
Employee 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. Employee shall represent
and warrant in writing that Employee is the owner of the shares so delivered,
free and clear of all liens, encumbrances, security interests and restrictions.
Employee’s election must be made on or before the date that the amount of tax to
be withheld is determined.

(c) Section 409A Provisions. The payment of Shares under this Agreement are
intended to be exempt from the application of section 409A of the Internal
Revenue Code, as amended (“Section 409A”) by reason of the short-term deferral
exemption set forth in Treasury Regulation §1.409A-1(b)(4). Notwithstanding
anything in the Plan or this Agreement to the contrary, to the extent that any
amount or benefit hereunder that constitutes “deferred compensation” to the
Employee under Section 409A and applicable guidance thereunder is otherwise
payable or distributable to the Employee under the Plan or this Agreement solely
by reason of the occurrence of a Change in Control or due to the Employee’s
disability or separation from service, such amount or benefit will not be
payable or distributable to the Employee by reason of such circumstance unless
the Company determines in good faith that the circumstances giving rise to such
Change in Control, disability or separation from service meet the definition of
a change in ownership or control, disability, or separation from service, as the
case may be, in Section 409A(a)(2)(A) of the Code and applicable final
regulations. Any payment or distribution

 

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that otherwise would be made to an Employee who is a specified employee as
defined in Section 409A(a)(2)(B) of the Code on account of separation from
service may not be made before the date which is six months after the date of
the specified employee’s separation from service (or if earlier, upon the
specified employee’s death) unless the payment or distribution is exempt from
the application of Section 409A by reason of the short term deferral exemption
or otherwise.

(d) Plan Provisions Control. In the event that any provision of the Agreement
conflicts with or is inconsistent in any respect with the terms of the Plan, the
terms of the Plan shall control.

(e) Rationale for Grant. The RSUs granted pursuant to this Agreement are
intended to offer Employee an incentive to put forth maximum efforts in future
services for the success of the Company’s business. The RSUs are not intended to
compensate Employee for past services.

(f) No Rights of Stockholders. Neither Employee, Employee’s legal representative
nor a permissible assignee of this award shall have any of the rights and
privileges of a stockholder of the Company with respect to the Shares, unless
and until such Shares have been issued in accordance with the terms hereof.

(g) No Right to Employment. The issuance of the RSUs or the Shares shall not be
construed as giving Employee the right to be retained in the employ of the
Company or an Affiliate, nor will it affect in any way the right of the Company
or an Affiliate to terminate such employment at any time, with or without cause.
In addition, the Company or an Affiliate may at any time dismiss Employee from
employment 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, Employee 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.

(h) 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.

(i) Securities Matters. The Company shall not be required to deliver Shares
until the requirements of any federal or state securities or other laws, rules
or regulations (including the rules of any applicable stock exchange and the
Minnesota Business Corporation Act) as may be determined by the Company to be
applicable are satisfied.

(j) 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 the Agreement shall remain
in full force and effect.

 

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(k) No Trust or Fund Created. Neither the Plan nor the 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 Employee or any other
Person. To the extent that Employee acquires a right to receive payments from
the Company or any Affiliate pursuant to this Agreement, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.

(l) 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 the Agreement or any provision thereof.

(m) Binding Effect. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns.

(n) Consultation With Professional Tax and Investment Advisors. The holder of
this Award acknowledges that the grant, vesting or any payment with respect to
this Award, and the sale or other taxable disposition of the Shares acquired
pursuant to the Award, 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, 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.

IN WITNESS WHEREOF, the Company and Employee have executed this Restricted Stock
Unit Award Agreement on the date set forth in the first paragraph.

 

ROCHESTER MEDICAL CORPORATION By:  

 

Name:  

 

Title:  

 

 

EMPLOYEE

 

Name:  

 

 

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Exhibit A

PERFORMANCE GOALS UNDER THE

RESTRICTED STOCK UNIT AGREEMENT

Performance Goals for the Performance Period

(    , 20     –     , 20    )

 

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