Exhibit 10.19

 

TRANSENTERIX, INC.
RESTRICTED STOCK UNIT AWARD AGREEMENT

 

This RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) dated as of
October 2, 2013 (the “Date of Grant”), is made by TransEnterix, Inc., a Delaware
corporation, formerly known as SafeStitch Medical, Inc. (the “Company”), to
Joseph P. Slattery (the “Executive”).

 

RECITALS

 

On September 22, 2013, the Board of Directors of the Company appointed the
Executive as Executive Vice President and Chief Financial Officer of the Company
effective as of the Date of Grant and approved the award of restricted stock
units evidenced by this Agreement.

 

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 Executive pursuant to the terms set forth in this Agreement as
an incentive for the Executive to joining the Company and 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 Executive 1,000,000
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.

 

(b)               The Amended and Restated 2007 Incentive Compensation Plan of
the Company (the “Plan”) provides for the issuance of equity awards to “Eligible
Employees” of the Company. On the Date of Grant, the maximum size of any
restricted stock unit award under the Plan to any one Eligible Employee in a
fiscal year was 500,000 shares; such individual limitation was increased to
1,000,000 shares on October 29, 2013. The Restricted Stock Units are awarded to
the Executive outside of the Plan, and have been awarded to the Executive
pursuant to the authority vested in the Board of Directors of the Company. The
Board of Directors has reserved, and, as long as this award of Restricted Stock
Units remains outstanding the Board of Directors will reserve, 1,000,000 shares
of authorized and unissued common stock of the Company for issuance upon vesting
of the Restricted Stock Units under this Agreement. Notwithstanding the fact
that the Restricted Stock Units have been awarded outside of the Plan, the Board
of Directors has designated that, unless specifically varied in this Agreement,
the terms of these Restricted Stock Units shall be interpreted under, and
entitled to the benefits of, the provisions of the Plan related to a “Deferred
Stock Award” (as defined in the Plan) of units to acquire the Shares. 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 Executive shall not be treated as a
stockholder as to Shares issuable to the Executive 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 Executive shall not be permitted to vote the Restricted
Stock Units or the Shares issuable with respect to such Restricted Stock Units;
and (iii) the Executive’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.

 

2.Vesting.

 

(a)                Except as otherwise provided in this Section 2 and in Section
3 hereof, and contingent upon the Executive’s continued employment until the
following applicable date, the Restricted Stock Units shall vest in accordance
with the following schedule: (i) one-third of the Restricted Stock Units
(333,333) shall vest on October 2, 2014; (ii) one-third of the Restricted Stock
Units (333,333) shall vest on October 2, 2015; and (iii) the final one-third of
the Restricted Stock Units (333,334) shall vest on October 2, 2016.

 

(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.

 

(c)                Except as set forth in Section 3, in the event of the
Executive’s termination of employment, either voluntarily or by the Company, or
pursuant to the death or disability of the Executive, the Restricted Stock Units
shall be forfeited unless the Committee, in its discretion, makes a different
determination.

 

3.             Change in Control. In the event that the Executive’s employment
with the Company or any Subsidiary is terminated involuntarily at the time of,
or within twelve (12) months following, the consummation of a Change in Control
(as defined in the Plan), all then unvested Restricted Stock Units shall
accelerate and vest in full as of the date of termination.

 

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.

 

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5.             No Right to Continued Employment. Neither the Plan nor this
Agreement shall confer on the Executive 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 Executive, 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 Executive agrees that the Shares issued to
the Executive with respect to vested Restricted Stock Units shall only be sold
by the Executive following registration of such Shares under the Securities Act
of 1933, as amended, or pursuant to an exemption therefrom.

 

7.             Withholding. The Executive shall pay to the Company promptly upon
request, and in any event at the time the Executive 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.

 

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 Executive under 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
Executive 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.

 

11.          Compliance with Code Section 409A. It is the intention of the
Company and Executive that this Agreement not result in an unfavorable tax
consequences to Executive under Code Section 409A. Accordingly, Executive
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
Executive 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
Executive. 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.

 

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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 Executive to sign any additional
agreements or undertakings that may be necessary to accomplish the foregoing.
The Executive 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 Executive, to the Executive’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 Executive hereby execute this Agreement.

 

  TRANSENTERIX, INC.               By: /s/ Todd M. Pope   Name: Todd M. Pope  
Title: President and CEO   Date: February 10, 2014               Accepted:      
        By: /s/ Joseph P. Slattery     Joseph P. Slattery   Date: February 10,
2014

 

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