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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 Arie Belldegrun (" 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 Dr. Arie
Belldegrun, a director and Chairman of the Corporation’s
Scientific Advisory Board, the Corporation issued to Dr. Belldegrun
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 Dr. Belldegrun 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
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