GENTAINCORPORATED RESTRICTEDSTOCK UNIT ISSUANCE AGREEMENT

A.           The Board has adopted the Plan for the purpose of attracting and retaining the services of selected employees who provide services to the Company (or any subsidiary).

 

B.           The Committee has approved the award of restricted stock units to the Participant pursuant to this Agreement in exchange for certain of the Participant's options that were tendered for exchange pursuant to the Company's Equity Award Exchange Offer.

 

C.           All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1.           Grant of Restricted Stock Units.  In exchange for the tender of the Participant's Eligible Awards pursuant to the Equity Award Exchange Offer, the Company hereby awards to the Participant, as of the Award Date, an award (the “Award”) of restricted stock units under the Plan.  Each restricted stock unit represents the right to receive one share of Common Stock on the vesting date of that unit. The number of shares of Common Stock subject to the awarded restricted stock units, the applicable vesting schedule for the restricted stock units and the underlying shares, the dates on which those vested shares shall be issued to the Participant and the remaining terms and conditions governing the Award shall be as set forth in this Agreement.

 

 

2.           Limited Transferability.  Prior to actual receipt of the Shares which vest and become issuable hereunder, the Participant may not transfer any interest in the Award or the underlying Shares.  Any Shares which vest hereunder but which otherwise remain unissued at the time of the Participant’s death may be transferred pursuant to the provisions of the Participant’s will or the laws of inheritance.

 

3.           Cessation of Employment.  Should the Participant cease employment for any reason prior to vesting in one or more Shares subject to this Award, then the Award will be immediately cancelled with respect to those unvested Shares, and the number of restricted stock units will be reduced accordingly. The Participant shall thereupon cease to have any right or entitlement to receive any Shares under those cancelled units.

 

4.           Change in Control.

 

(a)           The Participant shall fully vest in the Award (to the extent outstanding) immediately prior to the effective date of a Change in Control.  The Shares subject to those vested units will be issued on the Issuance Date triggered by the Change in Control (or otherwise converted into the right to receive the same consideration per share of Common Stock payable to the other shareholders of the Company in consummation of that Change in Control and distributed at the same time as such shareholder payments), subject to the Company’s collection of any applicable Withholding Taxes pursuant to the provisions of Paragraph 6.

 

(b)           This Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

5.           Adjustment in Shares.  In the event of any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock or any other increase or decrease in the number of issued shares of Common Stock effected without the Company’s receipt of consideration, then proportionate adjustments shall be made to the total number of Shares subject to this Award.

 

6.           Issuance of Shares of Common Stock.

 

(a)           On the Issuance Date or as soon thereafter as practicable, the Company shall issue to or on behalf of the Participant a certificate (which may be in electronic form) for the number of shares of Common Stock underlying the restricted stock units which vest under the Award on such date, subject, however, to the Company’s collection of any applicable Withholding Taxes.

 

(b)           Until such time as the Company provides the Participant with notice to the contrary, the Company shall collect any Withholding Taxes required to be withheld with respect to the issuance of the vested Shares hereunder through an automatic Share withholding procedure pursuant to which the Company will withhold, at the time of such issuance, a portion of the  Shares with a Fair Market Value (measured as of the issuance date) equal to the amount of those taxes  (the “Share Withholding Method”); provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy the Company‘s required withholding obligations using the minimum statutory withholding rates.  The Participant shall be notified in writing in the event such Share Withholding Method is no longer available.

 

(c)           Should any Shares be issued at a time when the Share Withholding Method is not available, then the Participant shall pay any Withholding Taxes required to be withheld with respect to the issuance of vested Shares hereunder by delivering a check to the Company in the amount of the Withholding Taxes.

 

(d)           In no event will any fractional shares be issued.

 

(e)           The holder of this Award shall not have any shareholder rights, including voting or dividend rights, with respect to the Shares subject to the Award until the Participant becomes the record holder of those Shares following their actual issuance after the satisfaction of the applicable Withholding Taxes.

 

7.           Compliance with Laws and Regulations.

 

(a)           The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Company and the Participant with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq Stock Market, if applicable) on which the Common Stock may be listed for trading at the time of such issuance.

 

(b)           The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance of any Common Stock hereby shall relieve the Company of any liability with respect to the non-issuance of the Common Stock as to which such approval shall not have been obtained.  The Company, however, shall use its best efforts to obtain all such approvals.

8.           Successors and Assigns.  Except to the extent otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and the Participant, the Participant’s assigns, the legal representatives, heirs and legatees of the Participant’s estate and any beneficiaries of the Award designated by the Participant.

 

9.           Notices.  Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company at its principal corporate offices.  Any notice required to be given or delivered to the Participant shall be in writing and addressed to the Participant at the address indicated below Participant’s signature line on this Agreement.  All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

 

10.           Construction.  This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan.  All decisions of the Committee with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in the Award.

 

11.           Governing Law.  The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without resort to that State’s conflict-of-laws rules.

 

12.           Employment at Will.  Except as may otherwise be set forth in the Participant’s employment agreement, nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate the Participant’s service at any time for any reason, with or without cause.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first indicated above.

 

 

 

The following definitions shall be in effect under the Agreement:

 

A.           Agreement shall mean this Restricted Stock Unit Issuance Agreement.

 

B.           Award shall mean the award of restricted stock units made to the Participant pursuant to the terms of the Agreement.

 

C.           Award Date shall mean the date the restricted stock units are awarded to the Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.

 

D.           Board shall mean the Company’s Board of Directors.

 

E.           Change in Control shall mean the occurrence of any of the following events:

 

(a)           any “person”, as such term is used in Sections 13(d) and 14(d) of the Exchange Act other than (i) the Company or any subsidiary of the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, or (iii) any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities without the prior written consent of the Committee or the Board;

 

(b)           during any period of twenty-four (24) consecutive months, individuals who at the effective date of the Plan constitute the Board and any new director whose election by the Board or nomination for election by the Company shareholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

 

(c)           the shareholders of the Company approve a merger or consolidation of the Company with any other company (other than a wholly-owned subsidiary of the Company), other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or more of the combined voting power of voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “person” (as defined in clause (a) above with the exceptions noted in clause (a)) acquires more than 50% of the combined voting power of the Company’s then outstanding securities; or

 

(d)           the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect).

 

F.           Code shall mean the Internal Revenue Code of 1986, as amended.

 

G.           Committee shall mean the committee of the Board acting in its capacity as administrator of the Plan.

 

H.           Common Stock shall mean shares of the Company’s common stock.

 

I.            Company shall mean Genta Incorporated, a Delaware corporation.

 

J.            Eligible Awards shall mean any options and restricted stock units held by the Participant that are Eligible Awards under the Equity Award Exchange Offer.

 

K.           Equity Award Exchange Offer shall mean that certain Equity Award Exchange Offer dated August 26, 2009.

 

L.           Exchange Act shall mean the Securities Exchange Act of 1934, as amended.

 

M.          Fair Market Value per share of Common Stock on any relevant date shall be the last sale price per share of Common Stock on date in question, as such price is reported by the National Association of Securities Dealers.

 

N.           Plan shall mean the Company’s 2009 Stock Incentive Plan.

 

O.           Participant shall mean the person to whom the Award is made pursuant to the Agreement.

 

P.           Withholding Taxes shall mean the Federal, state and local income and employment taxes required to be withheld by the Company in connection with the issuance of the shares of Common Stock under the Award.