COUGAR BIOTECHNOLOGY, INC. RESTRICTED STOCK AGREEMENT
This
Restricted Stock Agreement (this
“Agreement”)
made
effective as of December 29, 2006, is by and between Cougar Biotechnology,
Inc.,
a Delaware corporation (the “Company”),
and
Xxxx Xxxxxxxxxx (“Director”).
INTRODUCTION
A. The
Company has adopted the 2003 Stock Option Plan (the “Plan”)
to
increase stockholder value and to advance the interests of the Company by
furnishing a variety of economic incentives, including restricted stock,
designed to attract, retain and motivate employees.
B. The
Board
of Directors of the Company (the “Committee”)
believes that entering into this Agreement with Director is consistent with
the
stated purposes for which the Plan was adopted.
C. Pursuant
to a Stock Option Agreement dated August 24, 2004 with Xx. Xxxx Xxxxxxxxxx,
a
director and Chairman of the Corporation’s Scientific Advisory Board, the
Corporation issued to Xx. Xxxxxxxxxx an option to purchase 38,411 shares of
the
Corporation’s common stock at an exercise price of $0.39 per share (as adjusted
to give effect to the Company’s April 3, 2006 merger and related transactions
with SRKP 4, Inc.) (the “Option”);
D. At
the
time of the grant of the Option, the fair market value of the common stock,
as
determined by the Board, was $2.60 per share;
E. Section
409A of the Internal Revenue Code, which was enacted in late 2004, provides
that
options granted with an exercise price less than the fair market value of the
common stock on the date of grant are deemed “non-qualified deferred
compensation” and are subject to income tax as the option vests, plus a 20%
excise tax;
F. Pursuant
to IRS transition regulations relating to 409A, taxpayers are allowed to amend
such option awards until the end of 2006 to increase the exercise price to
the
fair market value of the common stock on the date of grant, and further allowed
to receive restricted stock as compensation for the increase exercise price
applicable to such holder’s option;
G. Pursuant
to the transition regulations, the Board believes it is in the best interest
of
the Corporation to amend the Option to increase the exercise price from $0.39
per share to $2.60 per share, the fair market value of the common stock on
the
date of grant, and to issue to Xx. Xxxxxxxxxx 18,864 shares of restricted stock
as additional compensation for the increase in exercise price applicable to
the
Option, such number of shares of restricted stock determined by calculating
the
aggregate increased exercise price of the Option ($84,888.31) and dividing
such
amount by the fair market value of the common stock as of the date hereof
($4.50).
AGREEMENT
Now,
Therefore,
it is
agreed as follows:
1. Grant
of Stock.
Subject
to the terms and provisions of this Agreement and the Plan, the Company hereby
grants to Director Eighteen Thousand Eight Hundred Sixty-Four (18,864) shares
of
Company’s common stock (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 a certificate in Director’s name evidencing the Shares
(the “Stock
Certificate”).
Director shall immediately thereafter deposit with the Company, together with
a
stock power endorsed in blank by Director, the Stock Certificate to be held
by
the Company until such time as the restrictions set forth herein and under
the
Plan have lapsed pursuant to paragraph 4 of this Agreement. The Stock
Certificate shall 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 December 29, 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 Director.
Upon
the execution of this Agreement and issuance of the Shares, Director 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.
Director agrees that, in addition to the restrictions set forth in the Plan,
at
all times prior to the vesting of the Shares as contemplated by paragraph 4
hereof:
(a) Director
shall not sell, transfer, pledge, hypothecate or otherwise encumber the Shares;
and
(b) If
Director’s service to the Company as a director is terminated for any reason
whatsoever, or Director violates the terms of any confidentiality agreement,
non-solicitation covenant or covenant not to compete, however delineated, then,
subject to paragraph 4 hereof, Director 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 on January 2, 2007. Upon
request of Director at any time after the date that the restrictions set forth
in paragraph 3 of this Agreement have lapsed and the Shares have become vested,
free and clear of all restrictions, except as provided in the Plan, the Company
shall remove any restrictive notations placed on the books of the Company and
the Stock Certificate in connection with such restrictions.
5. Copy
of 2003 Stock Option Plan.
By the
execution of this Agreement, Director acknowledges receipt of a copy of the
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 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
Plan, the committee (the “Committee”)
shall
have the sole and complete discretion with respect to all matters reserved
to it
by the Plan and decisions of the Board or the Committee with respect thereto
and
to this Agreement shall be final and binding upon Director. In the event of
any
conflict between the terms of this Agreement and the Plan, the provisions of
the
Plan shall govern and control.
7. Continuation
of Employment.
This
Agreement shall not confer upon Director, and shall not be construed to confer
upon Director, any right to continue to serve as a director of the Company
or to
employment with 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).
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8. Withholding
of Tax.
To the
extent that the receipt of the Shares or the lapse of any restrictions thereon
results in income to Director for federal or state income-tax purposes, Director
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 Director fails to do so, the Company is authorized to
withhold from any cash or stock remuneration then or thereafter payable to
Director any tax required to be withheld by reason of such resulting
compensation income. The Director may have Shares withheld to satisfy the
withholding tax obligation pursuant to an election under the Plan.
9. Section
83(b) Election.
Director 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. Director 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. Director
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. Director understands that
Director 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 Director files an election under
Section 83(b) of the Code, such election shall contain all information required
under the applicable treasury regulation(s) and Director shall deliver a copy
of
such election to the Company contemporaneously with filing such election with
the Internal Revenue Service.
DIRECTOR
ACKNOWLEDGES THAT IT IS DIRECTOR’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO
FILE TIMELY THE ELECTION UNDER SECTION 83(B) OF THE CODE, EVEN IF DIRECTOR
REQUESTS THAT THE COMPANY OR ITS REPRESENTATIVES MAKE THIS FILING ON DIRECTOR’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
Director.
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.
Signature
Page Follows
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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.
| COUGAR BIOTECHNOLOGY, INC. | ||
| |
|
|
| By: | ||
|
Xxxx X. Xxxxxxxx
President and Chief Executive Officer
|
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| DIRECTOR: | ||
|
Xxxx
Xxxxxxxxxx
|
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Signature Page—Restricted Stock Agreement
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