SOMAXON PHARMACEUTICALS, INC.
Exhibit 10.37
2005 EQUITY INCENTIVE AWARD PLAN
RESTRICTED STOCK UNIT AWARD GRANT NOTICE AND
RESTRICTED STOCK UNIT AWARD AGREEMENT
RESTRICTED STOCK UNIT AWARD AGREEMENT
Somaxon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), pursuant to its 2005
Equity Incentive Award Plan (the “Plan”), hereby grants to the individual listed below
(“Participant”), an award of restricted stock units (“Restricted Stock Units” or “RSUs”) with
respect to the number of shares of the Company’s common stock, par value $0.0001 (the “Shares”).
This award for Restricted Stock Units (this “RSU Award”) is subject to all of the terms and
conditions as set forth herein and in the Restricted Stock Unit Award Agreement attached hereto as
Exhibit A (the “Restricted Stock Unit Agreement”) and the Plan, each of which are
incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings in this Grant Notice and the Restricted Stock Unit Agreement.
Participant: |
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Grant Date:
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November 28, 2008 | |
Total Number of RSUs |
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Subject to Award: |
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Vesting Schedule:
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[[Option 1 (Prior to 1st Commercialization of the Product)] Subject to the terms of the Restricted Stock Unit Agreement, 100% of the RSU Award shall vest upon the first date included within an open trading window under the Company’s Xxxxxxx Xxxxxxx Policy following the first commercial sale of Silenor® in the United States, subject to Participant’s continued status as an Employee, Independent Director or Consultant of the Company or any Subsidiary on such vesting date.] | |
| [[Option 2 (After the 1st Commercialization of the Product)] Subject to the terms of the Restricted Stock Unit Agreement, 100% of the RSU Award shall vest upon the first date included within an open trading window under the Company’s Xxxxxxx Xxxxxxx Policy, subject to Participant’s continued status as an Employee, Independent Director or Consultant of the Company or any Subsidiary on such vesting date.] | ||
| Notwithstanding anything to the contrary in the Plan, in the event of a Change in Control (as defined in the Plan) prior to the vesting date as set forth above, 100% of the unvested RSUs will vest upon the consummation of the Change in Control. | ||
Distribution Schedule:
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Subject to the terms of the Restricted Stock Unit Agreement, the RSUs shall be distributable as they vest pursuant to the Vesting Schedule. |
By his or her signature and the Company’s signature below, Participant agrees to be bound by
the terms and conditions of the Plan, the Restricted Stock Unit Agreement and this Grant Notice.
Participant
has reviewed the Restricted Stock Unit Agreement, the Plan and this Grant Notice in their
entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant
Notice and fully understands all provisions of this Grant Notice, the Restricted Stock Unit
Agreement and the Plan. Participant hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising under the Plan, this Grant
Notice or the Restricted Stock Unit Agreement.
| SOMAXON PHARMACEUTICALS, INC. | PARTICIPANT | |||||||||||||
| By: | By: | |||||||||||||
| Print Name: | Xxxxxxx X. Xxxxxx | Print Name: | ||||||||||||
| Title: | President and CEO | Address: | ||||||||||||
| Address: | 0000 Xxxxxx Xxxxxx Xxxxx, |
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| Suite 500 San Diego, CA 92130 |
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EXHIBIT A
TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE
TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE
Pursuant to the Restricted Stock Unit Award Grant Notice (the “Grant Notice”) to which this
Restricted Stock Unit Award Agreement (this “Agreement”) is attached, the Company has granted to
Participant the right to receive the number of RSUs set forth in the Grant Notice, subject to all
of the terms and conditions set forth in this Agreement, the Grant Notice and the Plan. The RSU
Award and this Agreement are subject to the Plan, the terms and conditions of which are
incorporated herein by reference. In the event of any inconsistency between the Plan and this
Agreement, the terms of the Plan shall control. Capitalized terms not specifically defined herein
shall have the meanings specified in the Plan and the Grant Notice.
ARTICLE I.
AWARD OF RESTRICTED STOCK UNITS
1.1 Award of Restricted Stock Units.
(a) Award. In consideration of Participant’s past and/or continued employment with or
service to the Company or any parent or subsidiary thereof and for other good and valuable
consideration, the Company hereby grants to Participant the right to receive the number of RSUs set
forth in the Grant Notice, subject to all of the terms and conditions set forth in this Agreement,
the Grant Notice and the Plan. Prior to actual issuance of any Shares, the RSUs and the RSU Award
represent an unsecured obligation of the Company, payable only from the general assets of the
Company.
(b) Vesting. The RSUs subject to the RSU Award shall vest in accordance with the
Vesting Schedule set forth in the Grant Notice. Unless and until the RSUs have vested in
accordance with the vesting schedule set forth in the Grant Notice, Participant will have no right
to any distribution with respect to such RSUs. In the event of Participant’s termination of
service as an Employee, Independent Director or Consultant prior to the vesting of all of the RSUs,
any unvested RSUs will terminate automatically without any further action by the Company and be
forfeited without further notice and at no cost to the Company. Participant shall not be deemed to
have a termination of service merely because of a change in the capacity in which Participant
renders service to the Company or any Subsidiary or a change in the entity for which Participant
renders such service, unless following such change in capacity or service Participant is no longer
serving as an Employee, Independent Director or consultant of the Company or any Subsidiary.
(c) Distribution of Shares.
(i) Shares of Stock shall be distributed to Participant (or in the event of Participant’s
death, to his or her estate) with respect to such Participant’s vested RSUs following the vesting
date of the RSUs as specified in the Vesting Schedule set forth in the Grant Notice, subject to the
terms and provisions of the Plan and this Agreement.
(ii) All distributions shall be made by the Company in the form of whole shares of Stock.
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(iii) Neither the time nor form of distribution of Stock with respect to the RSUs may be
changed, except as may be permitted by the Committee in accordance with the Plan and Section 409A
of the Code and the Treasury Regulations thereunder.
(d) Generally. Shares issued under the RSU Award shall be issued to Participant or
Participant’s beneficiaries, as the case may be, at the sole discretion of the Committee, in either
(a) uncertificated form, with the Shares recorded in the name of Participant in the books and
records of the Company’s transfer agent with appropriate notations regarding the restrictions on
transfer imposed pursuant to this Agreement; or (b) certificate form.
1.2 Tax Withholding; Conditions to Issuance of Shares. Notwithstanding any other
provision of this Agreement (including, without limitation, Section 1.1(b) hereof):
(a) Tax Withholding.
(i) The Company has the authority to deduct or withhold, or require Participant to remit to
the Company, an amount sufficient to satisfy applicable federal, state, local and foreign taxes
(including any FICA obligation) required by law to be withheld with respect to any taxable event
arising from the receipt of the Shares upon settlement of the RSUs. To the maximum extent
permitted by law, the Company has the right to retain, without notice, from Shares issuable under
the RSU Award or from other compensation payable to Participant, shares of Stock or cash having a
value sufficient to satisfy Participant’s tax withholding obligation.
(ii) At any time not less than five business days before any such tax withholding obligation
arises, Participant may elect to satisfy his or her tax obligation, in whole or in part, by either:
(A) electing to have the Company withhold from other cash compensation payable to Participant or
Shares otherwise to be delivered to Participant pursuant to the RSU Award with a Fair Market Value
equal to the minimum amount of the tax withholding obligation, or (B) paying the amount of the tax
withholding obligation directly to the Company in cash. Unless Participant chooses to satisfy his
or her tax withholding obligation in accordance with clause (B) above, Participant’s tax
withholding obligation may be automatically satisfied in accordance with clause (A) above. The
Committee will have the right to disapprove an election to pay Participant’s tax withholding
obligation under clause (B) in its sole discretion. In the event Participant’s tax withholding
obligation will be satisfied under clause (A) above, then the Company, upon approval of the
Committee, may elect (in lieu of withholding the applicable withholding taxes from other cash
compensation payable to Participant or Shares to be delivered to Participant pursuant to the RSU
Award) to instruct any brokerage firm determined acceptable to the Company for such purpose to sell
on Participant’s behalf a whole number of shares from those Shares issuable to Participant upon
settlement of the RSUs as the Company determines to be appropriate to generate cash proceeds
sufficient to satisfy Participant’s tax withholding obligation. Participant’s acceptance of this
RSU Award constitutes Participant’s instruction and authorization to the Company and such brokerage
firm to complete the transactions described in clause (A) above, including the transactions
described in the previous sentence, as applicable. Any Shares to be sold at the Company’s
direction through a broker-assisted sale will be sold on the day the tax withholding obligation
arises (i.e., the date Stock is delivered) or as soon thereafter as practicable. The Shares may be
sold as part of a block trade with other participants of the Plan in which all participants receive
an average price. Participant will be responsible for all broker’s fees and other costs of sale,
and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages,
or expenses relating to any such sale. To the extent the proceeds of such sale exceed Participant’s
tax withholding obligation, the Company agrees to pay such excess in cash to Participant as soon as
practicable. Participant acknowledges that the Company or its designee is under no obligation to
arrange for such sale at any particular price, and that the proceeds of any such sale may not be
sufficient to satisfy Participant’s tax withholding obligation. The Company may
refuse to issue any Shares in settlement of the RSU Award to Participant until the foregoing
tax withholding obligations are satisfied.
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(b) Conditions to Issuance of Shares. The Company shall not be required to issue or
deliver any Shares issuable upon the vesting of the RSUs prior to the fulfillment of all of the
following conditions: (i) the admission of the Shares to listing on all stock exchanges on which
such Shares are then listed, (ii) the completion of any registration or other qualification of the
Shares under any state or federal law or under rulings or regulations of the U.S. Securities and
Exchange Commission or other governmental regulatory body, which the Committee shall, in its sole
and absolute discretion, deem necessary and advisable, (iii) the obtaining of any approval or other
clearance from any state or federal governmental agency that the Committee shall, in its absolute
discretion, determine to be necessary or advisable, (iv) the lapse of any such reasonable period of
time following the date the RSUs vest as the Committee may from time to time establish for reasons
of administrative convenience and (v) the receipt by the Company of full payment of any applicable
withholding tax in any manner permitted under Section 1.2(a) above.
ARTICLE II.
OTHER PROVISIONS
2.1 RSU Award and Interests Not Transferable. This RSU Award and the rights and
privileges conferred hereby, including the RSUs awarded hereunder, shall not be liable for the
debts, contracts or engagements of Participant or his or her successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or
any other means whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted disposition thereof shall be null and void and of no effect.
2.2 Rights as Stockholder. Neither Participant nor any person claiming under or
through Participant shall have any of the rights or privileges of a stockholder of the Company in
respect of any Shares issuable hereunder unless and until certificates representing such Shares
(which may be in uncertificated form) will have been issued and recorded on the books and records
of the Company or its transfer agents or registrars, and delivered to Participant (including
through electronic delivery to a brokerage account). After such issuance, recordation and
delivery, Participant shall have all the rights of a stockholder of the Company, including with
respect to the right to vote the Shares and the right to receive any cash or share dividends or
other distributions paid to or made with respect to the Shares.
2.3 Not a Contract of Employment or other Service Relationship. Nothing in this
Agreement or in the Plan shall confer upon Participant any right to continue to serve as an
employee or other service provider of the Company or any of its affiliates.
2.4 Construction. This Agreement shall be administered, interpreted and enforced
under the laws of the State of Delaware without regard to conflicts of laws thereof. Should any
provision of this Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain enforceable.
2.5 Conformity to Securities Laws. Participant acknowledges that the Plan and this
Agreement are intended to conform to the extent necessary with all provisions of the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
any and all regulations and rules promulgated thereunder by the U.S. Securities and Exchange
Commission, including, without limitation, Rule 16b-3 under the Exchange Act. Notwithstanding
anything herein to
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the contrary, the Plan shall be administered, and the Awards are granted, only in such a
manner as to conform to such laws, rules and regulations. To the extent permitted by applicable
law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
2.6 Amendment, Suspension and Termination. This Agreement may not be modified,
amended or terminated except by an instrument in writing, signed by Participant and by a duly
authorized representative of the Company.
2.7 Notices. Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of the Secretary of the Company at the address given
beneath the signature of an authorized officer of the Company on the Grant Notice, and any notice
to be given to Participant shall be addressed to Participant at the address given beneath
Participant’s signature on the Grant Notice. By a notice given pursuant to this Section 2.7,
either party may hereafter designate a different address for notices to be given to that party.
Any notice shall be deemed duly given when sent via email or when sent by certified mail (return
receipt requested) and deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.
2.8 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer herein set forth,
this Agreement shall be binding upon Participant and his or her heirs, executors, administrators,
successors and assigns.
2.9 Section 409A.
(a) Notwithstanding any other provision of the Plan, this Agreement or the Grant Notice, the
Plan, this Agreement and the Grant Notice shall be interpreted in accordance with, and incorporate
the terms and conditions required by, Section 409A of the Code (together with any Department of
Treasury regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidance that may be issued after the date hereof,
“Section 409A”). The Committee may, in its discretion, adopt such amendments to the Plan, this
Agreement or the Grant Notice or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions, as the Committee
determines are necessary or appropriate to comply with the requirements of Section 409A.
(b) This Agreement is not intended to provide for any deferral of compensation subject to
Section 409A of the Code, and, accordingly, the Shares issuable pursuant to the RSUs hereunder
shall be distributed to Participant no later than the later of: (a) the fifteenth
(15th) day of the third month following Participant’s first taxable year in which such
RSUs are no longer subject to a substantial risk of forfeiture, and (b) the fifteenth
(15th) day of the third month following first taxable year of the Company in which such
RSUs are no longer subject to substantial risk of forfeiture, as determined in accordance with
Section 409A and any Treasury Regulations and other guidance issued thereunder.
2.10 Tax Representations. Participant has reviewed with Participant’s own tax
advisors the federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on
such advisors and not on any statements or representations of the Company or any of its agents.
Participant understands that Participant (and not the Company) shall be responsible for
Participant’s own tax liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.
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