EXHIBIT 10.16


 


 


TRANSENTERIX, INC.


 


[INCENTIVE STOCK OPTION] [NON-QUALIFIED
STOCK OPTION] AGREEMENT


(EMPLOYEE)


 


Agreement


 


1.Grant of Option. TRANSENTERIX,
INC. (the "Company") hereby grants, as of [ ] (the "Date of Grant"), to [ ] (the "Optionee")
an option (the "Option") to purchase up to [       ] shares of the Company's
common stock, par value $0.001 per share (the "Shares"), at an exercise price per share equal to $[ ] (the "Exercise
Price"). The Option shall be subject to the terms and conditions set forth in this option agreement (this "Option
Agreement"). The Option is issued pursuant to the TransEnterix, Inc. 2007 Incentive Compensation Plan (the "Plan"),
which is incorporated by reference herein for all purposes. [The Option is a Non-Qualified Stock Option, and not an Incentive Stock
Option.] [The Option is an Incentive Stock Option.] [The Option is an Incentive Stock Option to the extent eligible under the Plan
and the Code, and otherwise is a Non-Qualified Stock Option.] The Optionee hereby acknowledges receipt of a copy of the Plan and
agrees to be bound by all of the terms and conditions hereof and thereof and all applicable laws and regulations.


 


2.Definitions. Capitalized
terms used herein and not otherwise defined shall have the respective meanings ascribed thereto in the Plan.


 


3.Vesting. Except as
otherwise provided in Sections 6 or 9 of this Option Agreement, or in the Plan, the Option will be earned upon achievement of the
following performance goals: [                   ].
To the extent that the Option has become exercisable as provided below, the Option may thereafter be exercised by the Optionee,
in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein. To the extent the
Option is earned as provided above, the Option shall vest on [ ] (the "Vesting Date"), subject to Optionee's Continuous
Service through the Vesting Date.


 


Except as otherwise
specifically provided herein, there shall be no proportionate or partial vesting prior to the Vesting Date, and all vesting shall
occur only on the Vesting Date. Upon the termination of the Optionee's Continuous Service, any unvested portion of the Option shall
terminate and be null and void.


 


4.Method of Exercise.
Once vested, this Option shall be exercisable in whole or in part by written notice, which shall state the election to exercise
the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements
as to the holder's investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of
the Plan. Such written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised
after both (a) receipt by the Company of such written notice accompanied by the Exercise Price and (b) arrangements that are satisfactory
to the Committee in its sole discretion have been made for Optionee's payment to the Company of the amount, if any, that is necessary
to be withheld in accordance with applicable Federal or state withholding requirements. No Shares shall be issued pursuant to the
Option unless and until such issuance and such exercise complies with all relevant provisions of applicable law, including the
requirements of any stock exchange upon which the Shares may then be traded.


 






    	 



    	 



    

  


5.Method of Payment.
Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; (c) to the extent permitted by the Committee, with Shares owned by the Optionee, or the withholding of Shares
that otherwise would be delivered to the Optionee as a result of the exercise of the Option; (d) pursuant to a "cashless
exercise" procedure, by delivery of a properly executed exercise notice together with such other documentation, and subject
to such guidelines, as the Committee shall require to effect an exercise of the Option and delivery to the Company by a licensed
broker acceptable to the Company of proceeds from the sale of Shares or a margin loan (to the extent available to the Optionee)
sufficient to pay the Exercise Price and any applicable income or employment taxes; or (e) such other consideration or in such
other manner as may be determined by the Committee in its absolute discretion.


 


6.Termination of Option.


 


(a)General. Any unexercised
portion of the Option shall automatically and without notice terminate and become null and voidat the time of the earliest of the
following to occur:


 


(i)unless the Committee otherwise
determines in writing in its sole discretion, three months after the date on which the Optionee's Continuous Service terminates
other than by reason of (A) by the Company or a Related Entity for Cause, (B) a Disability of the Optionee as determined by a medical
doctor satisfactory to the Committee, or (C) the death of the Optionee;


 


(ii)immediately upon the termination
of the Optionee's Continuous Service by the Company or a Related Entity for Cause;


 


(iii)twelve months after the date
on which the Optionee's Continuous Service is terminated by reason of a Disability as determined by a medical doctor satisfactory
to the Committee;


 


(iv)(A) twelve months after the
date of termination of the Optionee's Continuous Service by reason of the death of the Optionee, or, if later, (B) three months
after the date on which the Optionee shall die if such death shall occur during the one year period specified in Section 6(a)(iii)
hereof; or


 


(v)the tenth (10th)
anniversary of the date as of which the Option is granted.


 


(b)Cancellation.
To the extent not previously exercised, (i) the Option shall terminate immediately in the event of (A) the liquidation or dissolution
of the Company, or (B) any reorganization, merger, consolidation or other form of corporate transaction in which the Company does
not survive or the Shares are exchanged for or converted into securities issued by another entity, or an affiliate of such successor
or acquiring entity, unless the successor or acquiring entity, or an affiliate thereof, assumes the Option or substitutes an equivalent
option or right pursuant to Section 10(c) of the Plan, and (ii) the Committee in its sole discretion may by written notice ("cancellation
notice") cancel, effective upon the consummation of any transaction that constitutes a Change in Control, the Option (or
portion thereof) that remains unexercised on such date. The Committee shall give written notice of any proposed transaction referred
to in this Section 6(b) a reasonable period of time prior to the closing date for such transaction (which notice may be given either
before or after approval of such transaction), in order that the Optionee may have a reasonable period of time prior to the closing
date of such transaction within which to exercise the Option if and to the extent that it then is exercisable (including any portion
of the Option that may become exercisable upon the closing date of such transaction). The Optionee may condition his exercise of
the Option upon the consummation of a transaction referred to in this Section 6(b).


 






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7.Transferability. Unless
otherwise determined by the Committee, the Option is not transferable [otherwise than by will or under the applicable laws of descent
and distribution], and, during the lifetime of the Optionee, the Option shall be exercisable only by the Optionee, or the Optionee's
guardian or legal representative. In addition, the Option shall not be assigned, negotiated, pledged or hypothecated in any way
(whether by operation of law or otherwise), and the Option shall not be subject to execution, attachment or similar process. Upon
any attempt to transfer, assign, negotiate, pledge or hypothecate the Option, or in the event of any levy upon the Option by reason
of any execution, attachment or similar process contrary to the provisions hereof, the Option shall immediately become null and
void. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.


 


8. No Stockholder Rights.
Neither the Optionee nor any personal representative (or beneficiary) shall be, or shall have any of the rights and privileges
of, a stockholder of the Company with respect to any Shares issuable upon the exercise of the Option, in whole or in part, prior
to the date on which the Shares are issued.


 


9.Acceleration of Exercisability
of Option.


 


(a)Acceleration upon Certain
Terminations or Cancellations of Option. This Option shall become immediately exercisable to the extent earned prior to
the termination of the Option pursuant to Section 6 hereof, in the event that, (i) the Option will be terminated pursuant to Section
6(b)(i) hereof, or (ii) the Company exercises its discretion to provide a cancellation notice with respect to the Option pursuant
to Section 6(b)(ii) hereof.


 


(b)Acceleration upon Change
in Control. This Option shall become immediately exercisable to the extent earned in the event that, prior to the termination
of the Option pursuant to Section 6 hereof, and during the Optionee's Continuous Service, there is a "Change in Control,"
as defined in Section 9(b) of the Plan.


 


(c)Exception to Acceleration
upon Change in Control. Notwithstanding the foregoing, if in the event of a Change in Control the successor company assumes
or substitutes for the Option, the vesting of the Option shall not be accelerated as described in Section 9(b). For the purposes
of this paragraph, the Option shall be considered assumed or substituted for if following the Change in Control the Option or substituted
option confers the right to purchase, for each Share subject to the Option immediately prior to the Change in Control, the consideration
(whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of
Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration
received in the transaction constituting a Change in Control is not solely common stock of the successor company or its parent
or subsidiary, the Committee may, with the consent of the successor company, or its parent or subsidiary, provide that the consideration
to be received upon the exercise or vesting of the Option will be solely common stock of the successor company or its parent or
subsidiary substantially equal in Fair Market Value to the per share consideration received by holders of Shares in the transaction
constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the
Committee in its sole discretion and its determination shall be conclusive and binding. Notwithstanding the foregoing, on such
terms and conditions as may be set forth in an Award Agreement, in the event of a termination of the Optionee's employment in such
successor company (other than for Cause) within 24 months following such Change in Control, the option held by the Optionee at
the time of the Change in Control shall be accelerated as described in paragraph (b) of this Section 9.


 






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10.No Right to Continued Employment.
Neither the Option nor this Option Agreement shall confer upon the Optionee any right to continued employment or service with the
Company.


 


11.Governing Law. This
Option Agreement shall be governed in accordance with and by the internal laws of the State of Delaware.


 


12.Interpretation / Provisions
of Plan Control. This Option Agreement is subject to all the terms, conditions and provisions of the Plan, including, without
limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan adopted by
the Committee as may be in effect from time to time. If and to the extent that this Option Agreement conflicts or is inconsistent
with the terms, conditions and provisions of the Plan, the Plan shall control, and this Option Agreement shall be deemed to be
modified accordingly. The Optionee accepts the Option subject to all of the terms and provisions of the Plan and this Option Agreement.
The undersigned Optionee hereby accepts as binding, conclusive and final all decisions or interpretations of the Committee upon
any questions arising under the Plan and this Option Agreement, unless shown to have been made in an arbitrary and capricious manner.


 


13.Notices. Any notice
under this Option Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or when deposited
in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company's Secretary at
635 Davis Drive, Suite 300, Morrisville, NC 27560, or if the Company should move its principal office, to such principal office,
and, in the case of the Optionee, to the Optionee's last permanent address as shown on the Company's records, subject to the right
of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section.


 


Signatures Follow
on Next Page


 






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Option
Grant No.:            


 


IN WITNESS WHEREOF,
the undersigned have executed this Option Agreement as of the date first set forth above.


 





	 	COMPANY:
	 	TRANSENTERIX, INC.
	 	 	 
	 	 	 
	 	By:	 
	 	Name: Joseph P. Slattery
	 	Title: EVP and Chief Financial Officer



  


The Optionee acknowledges
receipt of a copy of the Plan and represents that he or she has reviewed the provisions of the Plan and this Option Agreement in
their entirety, is familiar with and understands their terms and provisions, and hereby accepts this Option subject to all of the
terms and provisions of the Plan and this Option Agreement. The Optionee further represents that he or she has had an opportunity
to obtain the advice of counsel prior to executing this Option Agreement.


 





	 	OPTIONEE:	 
	 	 	 
	 	 	 
	 	 	 
	Name:	 	 



 





 


	GRANT SUMMARY	 	 	 
	Grant Date:	 	Expiration Date:	 
	Grant Type:	 	Optionee Class:	 
	Number of Shares:	 	Exercise Price:	 
	Performance Goals:	 
	Number or % Earned Per Performance Goal:	 	 	 
	Vesting Date: