Exhibit
10.22


 


ORPHAN MEDICAL, INC.

NON-INCENTIVE STOCK OPTION AGREEMENT


 


This NON-INCENTIVE
STOCK OPTION AGREEMENT (the “Agreement”)
is made this              
day of              
,              ,
by and between Orphan Medical, Inc., a Delaware corporation (the “Company”) and              ,
an individual resident of              
(“Employee”).


 


1.                                       Grant
of Option.  The Company hereby grants
Employee the option (the “Option”)
to purchase all or any part of an aggregate of              
shares (the “Shares”) of Common
Stock of the Company at the exercise price of $             
per share according to the terms and conditions set forth in this Agreement and
in the Orphan Medical, Inc. 2004 Stock Incentive Plan (the “Plan”). 
The Option will not be treated as an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”).  The Option is issued under the Plan and is
subject to its terms and conditions.  A
copy of the Plan will be furnished upon request of Employee.


 


The Option shall terminate at the close of business
ten years from the date hereof.


 


2.                                       Vesting
of Option Rights.


 


(a)                                  Except
as otherwise provided in this Agreement, the Option may be exercised by
Employee in accordance with the following schedule:


 


	
  On or after each of

  the following dates

  	
   

  	
  Percent of Shares

  with respect to which

  the Option is exercisable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


(b)                                 During
the lifetime of Employee, the Option shall be exercisable only by Employee and
shall not be assignable or transferable by Employee, other than by will or the
laws of descent and distribution. 
Notwithstanding the foregoing, the Option may be exercised as to 100% of
the shares of common stock of the Company for which the Option was granted on
the date of a “change of control”, as hereinafter defined.  A “change of control” shall mean any of the
following: (i) A public announcement that any person has acquired or has the
right to acquire beneficial ownership of 51% or more of the then outstanding
shares of common stock of the Company and, for this purpose, the terms “person”
and “beneficial ownership” shall have the meanings provided in Section 13(d)
of the Securities Exchange Act of 1934 or related rules promulgated by the
Securities and Exchange Commission; (ii) The commencement of or public
announcement of an intention to make a tender or exchange offer for 51% or more
of the then


 





















 


outstanding shares of the
common stock of the Company; (iii) a sale of all or substantially all of the
assets of the Company; or (iv) The Board of Directors of the Company, in its
sole and absolute discretion, determines that there has been a sufficient
change in the stock ownership of the Company to constitute a change in control
of the Company.


 


3.                                       Exercise
of Option after Death or Termination of Employment.  The Option shall terminate and may no longer
be exercised if Employee ceases to be employed by the Company or its
affiliates, except that:


 


(a)                                  If
Employee’s employment shall be terminated for any reason, voluntary or
involuntary, other than for “Cause”
(as defined in Section 3(e)) or Employee’s death or disability (within the
meaning of Section 22(e)(3) of the Code), Employee may at any time within
a period of three
(3) months after such termination exercise the Option to the extent the
Option was exercisable by Employee on the date of the termination of Employee’s
employment.


 


(b)                                 If
Employee’s employment is terminated for Cause, the Option shall be terminated
as of the date of the act giving rise to such termination.


 


(c)                                  If
Employee shall die while the Option is still exercisable according to its terms
or if employment is terminated because Employee has become disabled (within the
meaning of Section 22(e)(3) of the Code) while in the employ of the
Company and Employee shall not have fully exercised the Option, such Option may
be exercised at any time within 12 months after Employee’s death or date of
termination of employment for disability by Employee, personal representatives
or administrators or guardians of Employee, as applicable or by any person or
persons to whom the Option is transferred by will or the applicable laws of
descent and distribution, to the extent of the full number of Shares Employee
was entitled to purchase under the Option on (i) the earlier of the date of death
or termination of employment or (ii) the date of termination for such
disability, as applicable.


 


(d)                                 Notwithstanding
the above, in no case may the Option be exercised to any extent by anyone after
the termination date of the Option.


 


(e)                                  “Cause” shall mean (i) the willful and continued failure by Employee substantially to
perform his or her duties and obligations (other than any such failure
resulting from his or her incapacity due to physical or mental illness),
(ii) Employee’s conviction or plea bargain of any felony or gross
misdemeanor involving moral turpitude, fraud or misappropriation of funds or
(iii) the willful engaging by Employee in misconduct which causes
substantial injury to the Company or its affiliates, its other employees or the
employees of its affiliates or its clients or the clients of its affiliates,
whether monetarily or otherwise.  For
purposes of this paragraph, no action or failure to act on Employee’s part
shall be considered “willful”
unless done or omitted to be done, by Employee in bad faith and without
reasonable belief that his or her action or omission was in the best interests
of the Company.


 


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4.                                       Method
of Exercise of Option.  Subject to
the foregoing, the Option may be exercised in whole or in part from time to
time by serving written notice of exercise on the Company at its principal
office within the Option period.  The
notice shall state the number of Shares as to which the Option is being
exercised and shall be accompanied by payment of the exercise price.  Payment of the exercise price shall be made
in cash (including bank check, personal check or money order payable to the
Company).


 


5.                                       Miscellaneous.


 


(a)                                  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.


 


(b)                                 No
Rights of Stockholders.  Neither
Employee, Employee’s legal representative nor a permissible assignee of this
Option 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 the name of Employee, Employee’s legal representative or permissible
assignee, as applicable.


 


(c)                                  No
Right to Employment.  The grant of
the Option shall not be construed as giving Employee the right to be retained
in the employ of, or as giving a director of the Company or an Affiliate (as
defined in the Plan) the right to continue as a director of the Company or an
Affiliate with, the Company or an Affiliate, nor will it affect in any way the
right of the Company or an Affiliate to terminate such employment or position
at any time, with or without cause.  In
addition, the Company or an Affiliate may at any time dismiss Employee from
employment, or terminate the term of a director of the Company or an Affiliate,
free from any liability or any claim under the Plan or the Agreement.  Nothing in the
Agreement shall confer on any person any legal or equitable right against the
Company or any Affiliate, directly or indirectly, or give rise to any cause of
action at law or in equity against the Company or an Affiliate.  The Option granted hereunder shall not form
any part of the wages or salary of Employee for purposes of severance pay or
termination indemnities, irrespective of the reason for termination of
employment.  Under no circumstances shall
any person ceasing to be an employee of the Company or any Affiliate be entitled
to any compensation for any loss of any right or benefit under the Agreement or
Plan which such employee might otherwise have enjoyed but for termination of
employment, whether such compensation is claimed by way of damages for wrongful
or unfair dismissal, breach of contract or otherwise.  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.


 


(d)                                 Governing
Law.  The validity, construction and
effect of the Plan and the Agreement, and any rules and regulations relating to
the Plan and the Agreement, shall be determined in accordance with the internal
laws, and not the law of conflicts, of the State of Delaware.


 


(e)                                  Severability.  If any provision of the Agreement is or
becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Agreement under any


 


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law deemed applicable by
the Committee (as defined in the Plan), 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.


 


(f)                                    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.


 


(g)                                 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.


 


(h)                                 Conditions
Precedent to Issuance of Shares. 
Shares shall not be issued pursuant to the exercise of the Option unless
such exercise and the issuance and delivery of the applicable Shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act of 1934,
as amended, the rules and regulations promulgated thereunder, the requirements
of any applicable Stock Exchange or the Nasdaq National Market and the Delaware
General Corporation Law.  As a condition
to the exercise of the purchase price relating to the Option, the Company may
require that the person exercising or paying the purchase price represent and
warrant that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation and warranty is required by law.


 


(i)                                     Withholding.  In order to provide the Company with the
opportunity to claim the benefit of any income tax deduction which may be
available to it upon the exercise of the Option and 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 insure that, if necessary, all
applicable federal or state payroll, withholding, income or other taxes are
withheld or collected from Employee.


 


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


 


 


	
   

  	
  ORPHAN
  MEDICAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [EMPLOYEE]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
							



 


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