Exhibit 10.6
COUGAR BIOTECHNOLOGY,
INC.
TRANSACTION INCENTIVE BONUS
PLAN
Cougar Biotechnology, Inc., a
Delaware corporation (the “ Company ”), has
adopted this Cougar Biotechnology, Inc. Transaction Incentive Bonus
Plan (the “ Plan ”), dated as of May 21,
2009, and effective upon the consummation of a Corporate
Transaction (as defined herein), for the benefit of certain of its
key employees, on the terms and conditions hereinafter stated. The
Plan, as set forth herein, is intended to encourage key employees
to remain employed by the Company during the period in which the
Company’s Board of Directors (the “ Board
”) explores the possibility of accomplishing a Corporate
Transaction (as defined below), and to provide such key employees
with additional incentives to develop the most desirable
alternatives for the Company and its shareholders, and to receive a
special bonus for their efforts in accomplishing a Corporate
Transaction.
1. Defined Terms . For
purposes of the Plan, the following terms shall have the meanings
indicated below:
1.1 “ Award Pool
” shall mean an amount equal to $2,000,000.
1.2 “ Board ”
means the Board of Directors of the Company.
1.3 “ Code ”
means the Internal Revenue Code of 1986, as amended from time to
time.
1.4 “ Committee ”
means the Compensation Committee of the Board or such other
committee as may be appointed by the Board to administer the
Plan.
1.5 “ Company ”
means Cougar Biotechnology, Inc., a Delaware
corporation.
1.6 “ Corporate
Transaction ” means any of the following transactions to
which the Company is a party:
(a) a transaction or series of
transactions whereby any “person” or related
“group” of “persons” (as such terms are
used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other
than the Company, any of its subsidiaries, an employee benefit plan
maintained by the Company or any of its subsidiaries or a
“person” that, prior to such transaction, directly or
indirectly controls, is controlled by, or is under common control
with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of securities of the Company possessing more than 50% of the total
combined voting power of the Company’s voting securities
outstanding immediately after such acquisition; or
(b) The consummation by the Company
(whether directly involving the Company or indirectly involving the
Company through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or business combination, (y) a
sale or other disposition of all or substantially all of the
Company’s assets in any single transaction or series of
related transactions, or (z) the acquisition of assets or
stock of another entity, in each case other than a
transaction:
(i) Which results in the
Company’s voting securities outstanding immediately before
the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
Company or the person that, as a result of the transaction,
controls, directly or indirectly, the Company or owns, directly or
indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company) directly or
indirectly, at least a majority of the combined voting power of
such successor entity’s outstanding voting securities
immediately after the transaction, and
(ii) After which no person or group
beneficially owns voting securities representing 50% or more of the
combined voting power of the successor entity; provided,
that no person or group shall be treated for purposes of this
paragraph (b)(ii) as beneficially owning 50% or more of combined
voting power of the successor entity solely as a result of the
voting power held in the Company prior to the consummation of the
transaction.
1.7 “ Discretionary Bonus
Component ” means the amount of bonus payable pursuant to
Section 5.1(b) hereof.
1.8 “ Exchange Act
” means the Securities Exchange Act of 1934, as amended from
time to time.
1.9 “ Fixed Bonus
Component ” means the amount of bonus payable pursuant to
Section 5.1(a) hereof.
1.10 “ Fixed Amount
” shall mean the amount listed opposite the name of such
Participant, as set forth on Schedule A hereto.
1.11 “ Participant
” means an employee of the Company who has been selected by
the Committee to be eligible to receive a Transaction Bonus
pursuant to this Plan, as set forth on Schedule B
hereto.
1.12 “ Plan ”
means this Cougar Biotechnology, Inc. Transaction Incentive Bonus
Plan.
1.13 “ Transaction
Bonus ” means a bonus payable to a Participant pursuant
to the terms of this Plan.
1.14 “ Transaction Date
” means the date on which a Corporate Transaction is
consummated.
2. Effectiveness of the Plan
. This Plan shall become effective upon the consummation of a
Corporate Transaction and shall be of no force or effect prior to a
Corporate Transaction. The Plan shall remain in effect until the
earlier of (i) such times a the Company has discharged all of
its obligations under the Plan, or (ii) the date on which the
Plan expires or terminates pursuant to Section 7
hereof.
2
3. Administration
.
3.1 Authority of the
Administrator . Subject to Section 7 hereof, the Plan
shall be interpreted, administered and operated by the Committee,
which shall have complete authority, subject to the express
provisions of the Plan, to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to the Plan, and to make
all other determinations necessary or advisable for the
administration of the Plan. The Committee may delegate any of its
duties hereunder to a subcommittee, or to such person or persons
from time to time as it may designate. All decisions,
interpretations and other actions of the Committee shall be final,
conclusive and binding on all parties who have an interest in the
Plan.
3.2 Administrator Liability .
No member of the Committee will be liable for any action or
determination made by the Committee with respect to the Plan or any
Transaction Bonus paid under the Plan. All expenses and liabilities
which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company or its
successor. No members of the Committee shall be personally liable
for any action, determination or interpretation made in good faith
with respect to this Plan or any Transaction Bonuses paid
hereunder, and all members of the Committee shall be fully
indemnified and held harmless by the Company or its successor in
respect of any such action, determination or
interpretation.
4. Eligibility . The
Participants shall be the individuals listed on Schedule B
hereto. Each of the Participants shall receive a Transaction Bonus
in the manner provided herein if the terms and conditions set forth
below are satisfied.
5. Terms and Conditions of the
Transaction Bonus .
5.1 Amount of Transaction
Bonus . In the event that a Corporate Transaction occurs, and
(i) a Participant remains employed by the Company through the
Transaction Date, and (ii) the Company’s Chief Executive
Officer, in his sole discretion, determines that such Participant
has achieved minimum satisfactory performance in accomplishing such
Corporate Transaction, such Participant shall be eligible to
receive a Transaction Bonus equal to the sum of:
(a) The Fixed Amount, if any, set
forth opposite the Participant’s name on Schedule A
hereto (the “Fixed Bonus Component”); provided ,
that in no event shall the aggregate Fixed Bonus Component payable
to all Participants exceed $1,650,000, and
(b) An amount, if a
