HANA BIOSCIENCES, INC. RESTRICTED STOCK AGREEMENT
HANA
BIOSCIENCES, INC.
This
Restricted Stock Agreement (this
“Agreement”)
made
effective as of June 30, 2006, is by and between Hana Biosciences, Inc., a
Delaware corporation having a place of business at 000 Xxxxxx Xxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (the “Company”),
and
Xxxx X. Xxx (“Executive”).
INTRODUCTION
A. Pursuant
to an Employment Agreement between the Company and Executive dated November
1,
2003, as amended October 21, 2004, December 19, 2005, and June 30, 2006, (the
“Employment
Agreement”)
and
certain Stock Option Agreements between the Company and the Executive dated
November 1, 2003, February 15, 2004, February 26, 2004, and July 20, 2004 (each
a “Stock
Option”
and,
collectively, the “Stock
Options”)
the
Company granted Executive options to purchase an aggregate of 952,305 shares
of
the Company’s common stock, as adjusted to reflect stock splits, combinations,
mergers and other adjustments prior to the date hereof.
B. On
May 9, 2006, Executive exercised a portion of the November 1, 2003 Stock Option
relating to 164,508 shares, and following such exercise there are 787,797 shares
remaining available for exercise under the Stock Options.
C. Due
to the tax implications of Section 409A of the Internal Revenue Code of 1986,
as
amended (the “Code”),
the
Company and Executive have agreed to amend the Stock Options in order to
increase the exercise prices thereof to equal the fair market value of the
common stock as of the dates of each Stock Option pursuant to an Amendment
to
Stock Option Agreements of even date herewith between the Company and
Executive.
D. To
compensate Executive for the increase to the exercise prices, the Company
desires to issue Executive 74,887 shares of restricted common stock, subject
to
the terms set forth herein and subject to the terms of the Stock Incentive
Plan.
E. Additionally,
under Section 5(f) of the Employment Agreement, Executive was entitled to
receive an aggregate of 419,262 options following the Company’s completion of
its October 2005 private placement offering and the Company’s completion of its
May 2006 registered direct offering (the “Anti-Dilution
Options”).
In
lieu of receiving the Anti-Dilution Options, Company desires to issue 410,000
shares of restricted common stock of the Company to Executive and Executive
desires to accept such restricted common stock of the Company is lieu of
receiving the Anti-Dilution Options subject to the terms set forth herein and
subject to the terms of the Stock Incentive Plan.
AGREEMENT
Now,
Therefore,
it is
agreed as follows:
1. Grant
of Stock.
Subject
to the terms and provisions of this Agreement and the Company’s 2004 Stock
Incentive Plan, as amended, (the “Stock
Incentive Plan”),
the
Company hereby grants to Executive 484,887 shares of Company common stock (such
shares are referred to hereinafter as the “Shares”).
Upon
the execution of this Agreement, the Shares shall be registered on the books
of
the Company, and the Company shall cause the transfer agent and registrar of
its
common stock to issue certificates in Executive’s name evidencing the Shares,
each certificate for an amount of Shares equaling the number of Shares which
vest on each date set forth in Paragraph 4 hereof (collectively, the
“Stock
Certificates”).
Executive shall immediately thereafter deposit with the Company, together with
corresponding stock powers endorsed in blank by Executive, the Stock
Certificates to be held by the Company until such time as the restrictions
set
forth herein and under the Stock Incentive Plan have lapsed for the respective
Shares pursuant to paragraph 4 of this Agreement. The Stock Certificates shall
each bear a legend in substantially the following form:
The
transferability of this certificate and the shares of Common Stock represented
by it are subject to the terms and conditions of a Restricted Stock Agreement
dated June 30, 2006 entered into between the registered owner and the Company.
A
copy of the agreement is on file in the office of the secretary of the
Company.
2. Rights
of Executive.
Upon
the execution of this Agreement and issuance of the Shares, Executive shall
become a stockholder with respect to the Shares and shall have all of the rights
of a stockholder with respect to the Shares, including the right to vote the
Shares and to receive all dividends and other distributions paid with respect
to
the Shares; provided,
however,
that
the Shares shall be subject to the restrictions set forth in paragraph 3 of
this
Agreement.
3. Restrictions.
Executive agrees that, in addition to the restrictions set forth in the Stock
Incentive Plan, at all times prior to the vesting of the Shares as contemplated
by paragraph 4 hereof:
(a) Executive
shall not sell, transfer, pledge, hypothecate or otherwise encumber the Shares;
and
(b) If
Executive’s employment with the Company is terminated for any reason whatsoever,
or Executive violates the terms of any confidentiality agreement,
non-solicitation covenant or covenant not to compete, however delineated, then,
subject to paragraph 4 hereof, Executive shall, for no consideration, forfeit
and transfer to the Company all of the Shares that remain subject to the
restrictions set forth in this paragraph 3.
4. Lapse
of Restrictions.
The
restrictions set forth in paragraph 3 shall lapse: (i) with respect to 42,500
Shares on October 24, 2006; (ii) with respect to 57,613 Shares on January 1,
2007; (iii) with respect to 4,313 Shares on February 15, 2007; (iv) with respect
to 3,765 Shares on February 26, 2007; (v) with respect to 162,500 Shares on
May
19, 2007; (vi) with respect to 9,196 Shares on July 21, 2007; (vii) with respect
to 42,500 Shares on October 24, 2007; and (viii) with respect to 162,500 of
the
Shares on May 19, 2008. Upon request of Executive at any time after the date
that the restrictions set forth in paragraph 3 of this Agreement have lapsed
with respect to any Shares and such Shares have become vested, free and clear
of
all restrictions, except as provided in the Stock Incentive Plan, the Company
shall remove any restrictive notations placed on the books of the Company and
the respective Stock Certificates in connection with such
restrictions.
5. Copy
of 2004 Stock Incentive Plan.
By the
execution of this Agreement, Executive acknowledges receipt of a copy of the
Stock Incentive Plan, the terms of which are hereby incorporated herein by
reference and made a part hereof by reference as if set forth in
full.
6. Administration.
This
Agreement shall at all times be subject to the terms of the Stock Incentive
Plan. The Board of Directors of the Company (the “Board”)
or, if
delegated to a committee of the Board of Directors of the Company under the
Stock Incentive Plan, the committee (the “Committee”)
shall
have the sole and complete discretion with respect to all matters reserved
to it
by the Stock Incentive Plan and decisions of the Board or the Committee with
respect thereto and to this Agreement shall be final and binding upon Executive.
In the event of any conflict between the terms of this Agreement and the Stock
Incentive Plan, the provisions of the Stock Incentive Plan shall govern and
control.
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7. Continuation
of Employment.
This
Agreement shall not confer upon Executive, and shall not be construed to confer
upon Executive, any right to continue in the employ of the Company for any
period of time, and shall not limit the rights of the Company in its sole
discretion (absent any other agreements to the contrary), to terminate the
employment of Executive at any time, with or without cause, for any reason
or no
reason, or to change Executive’s job responsibilities or rate of
compensation.
8. Withholding
of Tax.
To the
extent that the receipt of the Shares or the lapse of any restrictions thereon
results in income to Executive for federal or state income-tax purposes,
Executive shall deliver to the Company at the time of such receipt or lapse,
as
the case may be, such amount of money or shares of unrestricted stock as the
Company may require to meet its withholding obligation under applicable tax
laws
or regulations, and, if Executive fails to do so, the Company is authorized
to
withhold from any cash or stock remuneration then or thereafter payable to
Executive any tax required to be withheld by reason of such resulting
compensation income. The Executive may have Shares withheld to satisfy the
withholding tax obligation pursuant to an election under the Stock Incentive
Plan.
9. Section
83(b) Election.
Executive understands that he (and not the Company) shall be responsible for
his
own federal, state, local or foreign tax liability and any of his other tax
consequences that may arise as a result of the transactions contemplated by
this
Agreement. Executive shall rely solely on the determinations of his tax advisors
or his own determinations, and not on any statements or representations by
the
Company or any of its agents, with regard to all such tax matters. Executive
understands that Section 83 of the Code, taxes as ordinary income the difference
between the amount paid for the Shares and the fair market value of the Shares
as of the date any restrictions on the Shares lapse. In this context,
“restriction” includes without limitation the vesting restrictions set forth in
paragraph 4 hereof. “Restriction” with respect to officers, directors and 10%
stockholders also means the period during which such officer, director and
10%
stockholders could be subject to suit under Section 16(b) of the Securities
Exchange Act of 1934 in connection with a sale. Executive understands that
Executive may elect to be taxed at the time the Shares are received rather
than
when and as the restrictions on the Shares lapse or expire by filing an election
under Section 83(b) of the Code with the Internal Revenue Service within 30
days
from the date of the acquisition. In the event Executive files an election
under
Section 83(b) of the Code, such election shall contain all information required
under the applicable treasury regulation(s) and Executive shall deliver a copy
of such election to the Company contemporaneously with filing such election
with
the Internal Revenue Service.
EXECUTIVE
ACKNOWLEDGES THAT IT IS EXECUTIVE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO
FILE TIMELY THE ELECTION UNDER SECTION 83(B) OF THE CODE, EVEN IF EXECUTIVE
REQUESTS THAT THE COMPANY OR ITS REPRESENTATIVES MAKE THIS FILING ON EXECUTIVE’S
BEHALF.
10. Governing
Law.
This
Agreement, in its interpretation and effect, shall be governed by the laws
of
the State of Delaware applicable to contracts executed and to be performed
therein.
11. Amendments.
This
Agreement may be amended only by a written agreement executed by the Company
and
Executive.
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12. Entire
Agreement.
This
Agreement embodies the entire agreement made between the parties hereto with
respect to matters covered herein and shall not be modified except in accordance
with paragraph 11 of this Agreement.
13. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which shall constitute but one and the same
agreement. Signatures hereto may be delivered by facsimile or other means of
electronic transmission, and signatures so delivered shall be valid and binding
to the same extent as original signatures.
SIGNATURES
APPEAR ON FOLLOWING PAGE
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In
Witness Whereof,
the
parties have executed this Restricted Stock Agreement to be effective as of
the
date first set forth above.
| HANA BIOSCIENCES, INC.: | ||
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| By: | /s/ Xxxx X. Xxxxxxxxxxxx | |
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Xxxx X. Xxxxxxxxxxxx |
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| Vice President, Chief Financial Officer | ||
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EXECUTIVE:
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/s/
Xxxx X. Xxx
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Print
Name: Xxxx X. Xxx
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