CORNERSTONE BIOPHARMA HOLDINGS,
INC.
Amended and Restated Restricted
Stock Agreement
Granted Under 2005 Stock Incentive Plan
This AMENDED AND
RESTATED RESTRICTED STOCK AGREEMENT (this “Agreement”)
is dated as of August 20, 2008, and amended and restated as of
October 31, 2008 (the “Amendment Date”), between
Cornerstone BioPharma Holdings, Inc., a Delaware corporation (the
“Company”), and David Price (the
“Participant”).
WHEREAS, the
Company has entered into an agreement and plan of merger, as
amended with Critical Therapeutics, Inc. (“Critical
Therapeutics”) and Neptune Acquisition Corp., which is a
wholly owned subsidiary of Critical Therapeutics (“Transitory
Subsidiary”), pursuant to which Transitory Subsidiary will
merge with and into the Company, with the Company as the surviving
entity and a wholly owned subsidiary of Critical Therapeutics.
Critical Therapeutics will thereafter change its name to
Cornerstone Therapeutics Inc (“Cornerstone
Therapeutics”).
WHEREAS, the
Company wishes to employ the Participant, and the Participant
desires to accept employment with the Company.
WHEREAS, in
connection with the employment by the Company of the Participant,
the parties intended that the Participant would
receive, immediately prior to the merger, a restricted
stock grant of 2.2% of the fully diluted capitalization of
Cornerstone Therapeutics immediately following the merger (the
“Objective”).
WHEREAS, in order
to accomplish the Objective, the Company and the Participant
previously entered into the Restricted Stock Agreement dated as of
August 20, 2008 (the “Original Agreement”),
pursuant to which the Company agreed to grant the Participant
1,301,776 shares of the Company’s common stock, $0.0001 par
value per share, subject to certain restrictions, based upon the
projected fully diluted post-merger capitalization of Cornerstone
Therapeutics as of that date.
WHEREAS, since
entering into the Original Agreement, the number of shares of
the Company’s common stock that would represent 2.2%
of the projected fully diluted post-merger capitalization of
Cornerstone Therapeutics has changed due to, among other things,
changes in the number of outstanding stock options for each of
Critical Therapeutics and the Company, and accordingly the number
of restricted shares under the Original Agreement are insufficient
to accomplish the Objective.
WHEREAS, the
parties acknowledge the need to increase the number of restricted
shares granted to Participant based on the projected fully diluted
capitalization of Cornerstone Therapeutics as of the Amendment Date
to more fully achieve the Objective.
NOW, THEREFORE, in
consideration of the foregoing, of the mutual promises herein, and
of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
1. Grant of
Restricted Stock .
In connection with
the employment by the Company, of the Participant, the Company has
agreed to grant the Participant 1,365,629 shares (the
“Shares”) of the Company’s common stock, $0.0001
par value per share (the “Common Stock”), subject to
certain restrictions (the “Restricted Stock”), upon the
terms and conditions set forth in this Agreement. The Restricted
Stock will be granted pursuant to and shall in all respects be
subject to the terms and conditions of the Company’s 2005
Stock Incentive Plan (the “Plan”), a copy of which has
been furnished to the Participant.
2. Vesting
Commencement Date; Grant Date . This agreement is effective as
of August 20, 2008 and vesting of the Shares to be granted
hereunder shall commence as of September 8, 2008 (the “
Vesting Commencement Date ”). The Company shall grant
the Shares to the Participant immediately prior to the effective
time of the proposed merger between the Company and Neptune
Acquisition Corp. (“Neptune”), a Delaware corporation
and wholly owned subsidiary of Critical Therapeutics, Inc., a
Delaware corporation (“Critical Therapeutics”),
pursuant to an Agreement and Plan of Merger dated as of May 1,
2008, as amended (the “Merger Agreement”), among the
Company, Neptune, Critical Therapeutics and, for purposes of
Section 8.3 and 9.13 of the Merger Agreement, Cornerstone
BioPharma, Inc., a Nevada corporation (the “Critical
Therapeutics Merger”). If either or both of the Company
and/or Critical Therapeutics terminate the Merger Agreement, the
Company shall grant the Shares to the Participant within five
(5) business days following the completion of the
Company’s annual valuation, but in no event later than
February 15, 2009. The date on which the Shares shall be
granted to the Participant is referred to herein as the
“Grant Date,” and the Participant shall be promptly
notified of the Grant Date by the Company in writing once
determined.
(a)
Vesting Schedule . Subject to the Participant’s
continuing to provide services to the Company (whether as an
employee, officer, director, consultant or advisor) 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.
(b)
Forfeiture of Unvested Shares . If the Participant ceases to
provide services to the Company for any reason prior to the date
that all of the Shares are vested, the Participant shall
automatically forfeit to the Company all Shares that are unvested
at such time, except as provided in Section 3(c) below. Shares that
are not vested are referred to herein as “Unvested
Shares.”
(c)
Acceleration of Vesting . Notwithstanding Sections 3(a) and
3(b) above, immediately prior to, and contingent upon, the
consummation of a Change in Control Event (as defined in the Plan),
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. Notwithstanding anything to
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the contrary
contained herein or in the Plan, the Company and the Executive
acknowledge and agree that, for all purposes under this Agreement,
a Change in Control Event as defined in the Plan does not and shall
not include any merger, business combination or similar transaction
with Critical Therapeutics, Inc. or any subsidiary or affiliate
thereof.
4. Deposit
and Release of Stock Certificates .
(a)
Deposit . To ensure the availability for delivery to the
Company of the Unvested Shares upon the Participant’s ceasing
to provide services to the Company, the Participant shall, upon
execution of this Agreement and at any time thereafter, deliver and
deposit with the Secretary of the Company any stock certificates
representing any of the Unvested Shares, together with the stock
assignment duly endorsed in blank attached hereto as
Exhibit A . The Secretary shall hold the Unvested
Shares and stock assignment until the Unvested Shares become vested
or are forfeited to the Company. The Participant hereby appoints
the Secretary as the Participant’s attorney-in-fact to assign
and transfer to the Company any Unvested Shares that are forfeited
to the Company.
(b)
Release . As the Shares vest or are forfeited to the
Company, upon request by the Participant, the Secretary of the
Company shall promptly cause a new stock certificate to be issued
for the vested Shares and shall deliver any stock certificate for
vested Shares to the Participant and any stock certificate for
Unvested Shares to the Secretary of the Company. As a condition to
the delivery of any stock certificate for vested Shares to the
Participant, all applicable requirements for income and employment
tax withholding with respect to such Shares shall have been
satisfied by the Participant.
(c) No
Liability. Neither the Company nor the Secretary shall be
liable for any act it may do or omit to do in good faith while
holding the Unvested Shares.
5. Rights as
a Stockholder . Participant shall have all rights of a
stockholder (including, without limitation, dividend and voting
rights) with respect to the Restricted Stock, for record dates
occurring on or after the Grant Date and prior to the date any such
Shares of Restricted Stock are forfeited in accordance with this
Agreement, except that any dividends or distributions paid in
Shares or other securities (including, without limitation, any
change in the shares of Restricted Stock pursuant to
Section 8.(a) of the Plan) with respect to Unvested Shares
shall, until such shares vest, be deposited with the Company or any
holder appointed pursuant to Section 4 hereof, together with a
stock power endorsed in blank or other appropriate instrument of
transfer, and shall be subject to the same restrictions as such
Restricted Stock and otherwise considered to be such Restricted
Stock for all purposes hereunder.
6. No Right
to Continued Employment . The Participant understands and
acknowledges that, except as may otherwise be provided in a
separate, written employment agreement between the Company and the
Participant, the Participant’s employment is “at
will” and is for no specified term. Nothing in this
Agreeme
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