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                                                                    EXHIBIT 10.4

                             STOCK OPTION AGREEMENT
                           (2005 Plan Director Option)

                                                      Dated as of: _____________

To: ________________

      Pursuant to the 2005 Stock Incentive Plan ("2005 Plan") of Somanetics
Corporation (the "Company") and with the approval of the Compensation Committee
of the Company's Board of Directors, in accordance with the 2005 Plan, the
Company hereby grants to you an option (the "Option") to purchase __________
(_____) Common Shares, par value $.01 per share, of the Company (the "Shares")
at $_____ per Share, upon the terms and conditions contained in this Stock
Option Agreement and in the 2005 Plan, a copy of which is attached to, and made
a part of, this Stock Option Agreement.

      1.    The Option is intended to be a Non Qualified Stock Option, as
defined in the 2005 Plan.

      2.    The Option herein granted may not be transferred by you otherwise
than by will or by the laws of descent and distribution, and during your
lifetime the Option is exercisable only by you.

      3.    (a)   Subject to the other terms of this Option and the 2005 Plan,
you may exercise the Option in whole or in part at any time until expiration of
this Option.

            (b)   The Option shall expire (to the extent not previously
exercised), and all rights to exercise any unexercised portion of the Option
shall cease, on the earlier of the following:

            -  Ten Year Maximum Term. the 10th anniversary of the date of this
               Option, and

            -  Termination for Cause. the date you are terminated or removed for
               cause from, or otherwise cease to hold for cause, any one or more
               of the following positions with the Company or a Subsidiary: an
               officer, an other employee, a director, a consultant, an advisor,
               an independent contractor or an agent.

      4.    The Option shall be exercised by giving a written notice of exercise
to the Treasurer of the Company and by executing such documents as the Company
may reasonably request. Such notice shall specify the number of whole Shares to
be purchased and shall be accompanied by payment by any of the methods described
in Sections 2.1(c) and 4.5 of the 2005 Plan. Such exercise shall be effective
only upon the actual receipt of such written notice, payment and other
documents, if any, and no rights or privileges of a shareholder of the Company
in respect of any of the Shares issuable upon the exercise of any part of the
Option shall inure to you, or any other person entitled to exercise the Option,
unless and until you

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become a shareholder of record with respect to such Shares. If at the time of
exercise, the Committee allows for payment of all or any part of the exercise
price to be made by promissory note, the interest rate for the promissory note
will be a market rate.

      5.    It is understood and agreed that nothing contained in the 2005 Plan
or in this Agreement, nor any action taken by the Committee, shall confer upon
you any right with respect to the continuation of your employment by, or service
with, the Company or any Subsidiary, nor interfere in any way with the right of
the Company or a Subsidiary to terminate your employment or service at any time.

                                                 Very truly yours,

                                                 SOMANETICS CORPORATION,
                                                 a Michigan corporation

                                                 By _________________________

                                                 Its ________________________

The above is agreed to and accepted.

________________________

Dated: _________________

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