SECOND AMENDMENT TO AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT
Exhibit 10.5
EXECUTION VERSION
SECOND AMENDMENT TO
AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT
AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT (this “Amendment”) is
made and entered into as of the 27th day of July, 2009 (the “Amendment Date”), by and between
Cornerstone BioPharma Holdings, Inc., a Delaware corporation (the “Company”), and Xxxxx Xxxxx (the
“Participant”). Capitalized terms used herein that are not otherwise defined herein shall have the
meanings given to them in the Restricted Stock Agreement (as defined below) or the Company’s 2005
Stock Incentive Plan (the “Plan”), as applicable.
W I T N E S S E T H :
WHEREAS, the Company and the Participant entered into a Restricted Stock Agreement as of
August 20, 2008, which was amended and restated as of October 31, 2008 and further amended by the
First Amendment to Amended and Restated Restricted Stock Agreement dated June 12, 2009 (the
“Restricted Stock Agreement”);
WHEREAS, the Restricted Stock Agreement provides that, subject to the Participant’s continuing
to provide services (whether as an employee, officer, director, consultant or advisor) to
Cornerstone Therapeutics Inc., a Delaware corporation and the ultimate parent company of the
Company (“Cornerstone Therapeutics”), on such dates, 25% of the Shares shall vest on each of the
first four anniversaries of the Vesting Commencement Date, so that all of the Shares shall be
vested four years after such date;
WHEREAS, the Restricted Stock Agreement further provides that immediately prior to, and
contingent upon, the consummation of a Change in Control Event, all of the Shares, to the extent
that they are then unvested, shall vest in full and the forfeiture restrictions applicable to such
Shares shall lapse;
WHEREAS, on May 6, 2009, Chiesi Farmaceutici SpA, a corporation organized under the laws of
Italy (“Chiesi”), entered into, among other agreements, (a) a stock purchase agreement (the
“Company Stock Purchase Agreement”) with Cornerstone Therapeutics and (b) a stock purchase
agreement (the “Initial Stock Purchase Agreement”) with (1) an entity controlled by Xxxxx X.
Xxxxxxx, the President and Chief Executive Officer of Cornerstone Therapeutics and the Company, and
(2) an entity controlled by Xxxxxx X. Xxxx, the Executive Vice President, Manufacturing and Trade
of Cornerstone Therapeutics and the Company, pursuant to which, among other things, on the Closing
Date (as defined in the Company Stock Purchase Agreement), Chiesi will purchase from Cornerstone
Therapeutics 11,902,741 newly issued shares of common stock, par value $0.001 per share, of
Cornerstone Therapeutics (“CRTX Common Stock”), subject to future adjustment, and an aggregate of
1,600,000 shares of CRTX Common Stock from entities controlled by Xx. Xxxxxxx and Xx. Xxxx;
WHEREAS, concurrently with the execution and delivery of the Company Stock Purchase Agreement
and the Initial Stock Purchase Agreement, the Participant entered into a voting agreement (the
“Voting Agreement”) with Chiesi, pursuant to which the Participant is subject to, among other
things, transfer restrictions on the Shares while the Voting Agreement is in effect (such period,
the “Voting Agreement Restriction Period”);
WHEREAS, Cornerstone Therapeutics has adopted an xxxxxxx xxxxxxx policy, as such policy may be
amended or superseded from time to time (the “Policy”), which prohibits the Participant from
selling, pledging or donating the Shares during certain periods as prescribed by the Policy (each a
“Policy Restriction Period”);
WHEREAS, on the Closing Date, which is expected to occur on or about July 29, 2009, it is
anticipated that Chiesi will acquire a number of shares of CRTX Common Stock such that it will
become the beneficial owner of more than 50% of the combined voting power of the then-outstanding
securities of Cornerstone Therapeutics entitled to vote generally in the election of directors,
which would constitute a Change in Control Event;
WHEREAS, in connection with any vesting of the Shares, the Participant will recognize
substantial wages subject to income taxes and the Company (or one of its affiliates) will be
required to remit applicable tax withholdings on the Participant’s income on the next business day;
WHEREAS, the vesting of the Shares is expected to occur during a Voting Agreement Restriction
Period and a Policy Restriction Period (each a “Restriction Period”);
WHEREAS, the Participant has informed the Company that, in order to satisfy his obligation to
the Company (or one of its affiliates) with respect to the tax withholding obligations that will
arise in connection with the vesting of the Shares, the Participant will be required to sell a
portion of the Shares; and
WHEREAS, the Company and the Participant desire to amend the Restricted Stock Agreement (and
such amendment is acceptable to Cornerstone Therapeutics) to defer both the date of any vesting of
the Shares and the lapse of a substantial risk of forfeiture of the Shares until the first business
day that does not fall during a Restriction Period such that if the Participant voluntarily resigns
or terminates his employment with the Company (or any of its affiliates) other than for Good Reason
(as defined in the Participant’s employment agreement with the Company (or any affiliate) in effect
at the time the Participant gives notice of a Good Reason condition to the Company (or any
affiliate) pursuant to such agreement) prior to the first business day that does not fall during a
Restriction Period, the Shares will be forfeited.
NOW, THEREFORE, in consideration of the premises set forth above and the mutual terms and
conditions set forth below and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and the Participant agree as follows:
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1. Effective as of the Amendment Date, a new Section 3(d) shall be inserted into the
Restricted Stock Agreement, as follows:
(d) Continued Risk of Forfeiture. If the vesting of any Shares under
Section 3(a) or 3(c) above would occur during a Restriction Period, such vesting
shall be deferred and the risk of forfeiture of such Shares shall not lapse until
the earlier of (1) the first business day that does not fall during a Restriction
Period or (2) the termination of the Participant’s employment with Cornerstone
Therapeutics (or any subsidiary thereof) by Cornerstone Therapeutics (or any
subsidiary thereof) for any reason or by the Participant for Good Reason (as defined
in the Participant’s employment agreement with the Company (or any affiliate) in
effect at the time the Participant gives notice of a Good Reason condition to the
Company (or any affiliate) pursuant to such agreement). For the purposes of this
Agreement, a Restriction Period is defined as a period that is a Policy Restriction
Period or a Voting Agreement Restriction Period or both. A Policy Restriction
Period is defined as any period during which Cornerstone Therapeutics’ xxxxxxx
xxxxxxx policy, as such policy may be amended or superseded from time to time,
prohibits the Participant from selling, pledging or donating the Shares. A Voting
Agreement Restriction Period is defined as any period during which the voting
agreement, dated as of May 6, 2009, by and among Chiesi Pharmaceutici SpA, a
corporation organized under the laws of Italy, the Participant, Cornerstone
Therapeutics (solely with respect to Section 2(b) thereof) and certain other
stockholders of Cornerstone Therapeutics, as such agreement may be amended or
superseded from time to time, is still in effect.
2. Except as hereby amended, the Restricted Stock Agreement shall remain in full force and
effect and is hereby ratified and confirmed in all respects.
3. This Amendment shall terminate and be of no further force and effect if the Company Stock
Purchase Agreement is terminated as provided in Section 6.1 thereof.
[signature page follows]
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[Signature Page to Second Amendment to Amended and Restated Restricted Stock Agreement]
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first set
forth above.
| CORNERSTONE BIOPHARMA HOLDINGS, INC. | ||||||
| By: | /s/ Xxxxx X. Xxxxxxx
|
|||||
| Title: President and Chief Executive Officer | ||||||
| PARTICIPANT | ||||||
| /s/ Xxxxx Xxxxx | ||||||
| Name: Xxxxx Xxxxx | ||||||
ACKNOWLEDGED AND AGREED:
By:
|
/s/ Xxxxx X. Xxxxxxx
|
|||
| Title: President and Chief Executive Officer |
