EXHIBIT 10.3
 
RESTRICTED STOCK AGREEMENT

ARNO THERAPEUTICS, INC.
2005 STOCK OPTION PLAN

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made effective as of April
25, 2011, by and between ARNO THERAPEUTICS, INC., a Delaware corporation (the
“Company”), and Glenn Mattes (the “Participant”).

W I T N E S S E T H:

WHEREAS, the Participant is, on the date hereof, a key employee, officer or
director of, or a consultant or advisor to, the Company; and

WHEREAS, the Company wishes to grant a restricted stock award to the Participant
for shares of the Company’s Common Stock pursuant to the Company’s 2005 Stock
Option Plan (the “Plan”); and

WHEREAS, the Administrator of the Plan has authorized the grant of a restricted
stock award to the Participant;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:

1.           Grant of Restricted Stock Award.  The Company hereby grants to the
Participant on the date set forth above (the “Date of Award”) a restricted stock
award (the “Award”) for Two Hundred Fifty Thousand (250,000) shares of Common
Stock (the “Shares”) on the terms and conditions set forth herein, which Shares
are subject to adjustment pursuant to Section 11.6 of the Plan.  The Company
shall cause to be issued one or more stock certificates representing such Shares
in the Participant’s name, and shall hold each such certificate until such time
as the risks of forfeiture set forth in this Agreement have lapsed with respect
to the Shares represented by the certificate.  The Company may also place a
legend on such certificates describing the risks of forfeiture and other
transfer restrictions set forth in this Agreement providing for the cancellation
of such certificates if the Shares are forfeited as provided in Section 2
below.  Subject to the terms and conditions of the Plan, the Participant shall
have all the rights of a stockholder with respect to the Shares during the
period in which the Shares are subject to risk of forfeiture, including without
limitation, the right to vote such shares and receive all dividends attributable
to such shares.

2.           Vesting of Restricted Stock.  The Shares subject to this Award
shall remain subject to forfeiture until vested as provided herein.  Subject to
the provisions of Section 3 below, the Shares shall vest, and the risk of
forfeiture shall lapse, in 12 equal monthly installments as of each one-month
anniversary of the Date of Award.  Except as set forth herein, ninety (90) days
following any termination of the Participant’s employment with the Company for
any reason, including the Participant’s voluntary resignation or retirement, the
Participant shall forfeit all Shares subject to this Award which, as of the
termination date, have not yet vested and for which the risks of forfeiture have
not lapsed.

 
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3.           Termination of Employment; Change of Control.

(a)           In the event that the Participant’s employment is terminated by
the Company without Cause (as defined below), or by the Participant for Good
Reason (as defined below), then upon such termination the vesting of all
unvested Shares shall be accelerated such that such Shares shall be deemed
vested as if the Participant had remained continuously employed with the Company
for one year following the termination date.

(b)           In the event that the Participant’s employment is terminated by
the Company for Cause, or by the Participant other than for Good Reason, then
upon such termination the vesting applicable to all unvested Shares shall cease
immediately upon such termination.

(c)           In the event that the Participant’s employment is terminated at
any time beginning the day that is 90 days prior to the effective date of
a  Change of Control (as defined below) (the “Trigger Date”) and ending on the
date that is 12 months following the Trigger Date, then all unvested Shares
shall immediately vest in full.

(d)           For purposes of this Agreement, the terms “Cause” and “Good
Reason” shall have the meanings set forth in the Employment Agreement between
the Company and the Participant dated April 25, 2011.

(e)           For purposes of this Agreement, the term “Change of Control” shall
have the meaning set forth in the Plan, except that, notwithstanding the terms
of the Plan, no transaction shall be considered a Change of Control for purposes
of this Agreement if it:

(i) arises out of or is in connection with the issuance and sale by the Company
of its equity securities for the purpose of financing the Company’s on-going
operations; or
 
(ii)results from or arises out of any transaction ascribing a valuation of the
Company of less than Forty Five Million Dollars ($45,000,000).

4.           General Provisions.

(a)           Employment or Other Relationship.  This Agreement shall not confer
on the Participant any right with respect to continuance of employment or other
relationship by the Company, nor will it interfere in any way with the right of
the Company to terminate such employment or relationship.

(b)           Securities Law Compliance.  The Participant agrees that, until
such time as the Shares are registered and freely tradable under applicable
state and federal securities laws, all Shares subject to this Agreement shall be
held for Participant’s own account without a view to any further distribution
thereof, that the certificates for such Shares shall bear an appropriate legend
to that effect and that such Shares will be not transferred or disposed of
except in compliance with applicable state and federal securities laws.
 
 
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(c)           Mergers, Recapitalizations, Stock Splits, Etc.  Except as
otherwise specifically provided in any employment, change of control, severance
or similar agreement executed by the Participant and the Company, pursuant and
subject to Section 11.6 of the Plan, certain changes in the number or character
of the Common Stock of the Company (through sale, merger, consolidation,
exchange, reorganization, divestiture (including a spin-off), liquidation,
recapitalization, stock split, stock dividend, or otherwise) shall result in an
adjustment, reduction, or enlargement, as appropriate, in the number of Shares
subject to this Award.  Any additional Shares that are credited pursuant to such
adjustment shall be subject to the same restrictions as are applicable to the
Shares with respect to which the adjustment relates.

(d)           Shares Reserved.  The Company shall at all times during the term
of this Award reserve and keep available such number of Shares as will be
sufficient to satisfy the requirements of this Agreement.

(e)           Withholding Taxes.  To permit the Company to comply with all
applicable federal and state income tax laws or regulations, the Company may
take such action as it deems appropriate to ensure that, if necessary, all
applicable federal and state payroll, income or other taxes are withheld from
any amounts payable by the Company to the Participant.  If the Company is unable
to withhold such federal and state taxes, for whatever reason, the Participant
hereby agrees to pay to the Company an amount equal to the amount the Company
would otherwise be required to withhold under federal or state law prior to the
transfer of any certificates for the Shares subject to this Award.  Subject to
such rules as the Administrator may adopt, the Administrator may, in its sole
discretion, permit Participant to satisfy such withholding tax obligations, in
whole or in part, by delivering Shares of Common Stock received pursuant to this
Award having a Fair Market Value, as of the date the amount of tax to be
withheld is determined under applicable tax law, equal to the minimum amount
required to be withheld for tax purposes.  Participant’s request to deliver
Shares for purposes of such withholding tax obligations shall be made on or
before the date that triggers such obligations or, if later, the date that the
amount of tax to be withheld is determined under applicable tax
law.  Participant’s request shall be approved by the Administrator and otherwise
comply with such rules as the Administrator may adopt to assure compliance with
Rule 16b-3 or any successor provision, as then in effect, of the General Rules
and Regulations under the Securities and Exchange Act of 1934, if applicable.

(f)           2005 Stock Option Plan.  The Award evidenced by this Agreement is
granted pursuant to the Plan, a copy of which Plan has been made available to
the Participant and is hereby incorporated into this Agreement.  This Agreement
is subject to and in all respects limited and conditioned as provided in the
Plan.  All defined terms of the Plan shall have the same meaning when used in
this Agreement.  The Plan governs this Award and, in the event of any questions
as to the construction of this Agreement or in the event of a conflict between
the Plan and this Agreement, the Plan shall govern, except as otherwise provided
herein or in the Plan.
 
 
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(g)           Lockup Period Limitation.  Participant agrees that in the event
the Company advises Participant that it plans an underwritten public offering of
its Common Stock in compliance with the Securities Act of 1933, as amended (the
“Securities Act”), and that the underwriter(s) seek to impose restrictions under
which certain stockholders may not sell or contract to sell or grant any option
to buy or otherwise dispose of part or all of their stock purchase rights of the
underlying Common Stock, Participant hereby agrees that for a period not to
exceed 180 days from the prospectus, Participant will not sell or contract to
sell or grant an option to buy or otherwise dispose of this Agreement or any of
the underlying Shares of Common Stock without the prior written consent of the
underwriter(s) or its representative(s).

(h)           Accounting Compliance.  Participant agrees that if a transaction
subject to Rule 145 of the Securities Act occurs, and Participant is an
“affiliate” of the Company or any Subsidiary (as defined in applicable legal and
accounting principles) at the time of such transaction, Participant will comply
with all requirements of Rule 145 and the requirements of such other legal or
accounting principles, and will execute any documents necessary to ensure such
compliance.

(i)           Scope of Agreement.  This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns and of the Participant and
any successor or successors of the Participant.

(j)           Governing Law.  This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York, without
giving effect to its principles of conflicts of laws.

(k)           Participant Representations.  The Participant hereby represents
and warrants that the Participant has reviewed with her own tax advisors the
federal, state, and local tax consequences of the transactions contemplated by
this Agreement.  The Participant is relying solely on such advisors and not on
any statements or representation of the Company or any of its agents. The
Participant understands that she will be solely responsible for any tax
liability that may result to her as a result of the transactions contemplated by
this Agreement.

(l)           Notices.  All notices and other communications provided in this
Agreement will be in writing and will be deemed to have been duly given when
received by the party to whom it is directed at the following addresses:

If to the Company:
Arno Therapeutics, Inc.
4 Campus Drive, 2nd Floor
Parsippany, NJ 07054
Attn: Secretary
If to the Participant:
Glenn Mattes
[ADDRESS]

[signature page follows]

 
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ACCORDINGLY, the parties hereto have caused this Agreement to be executed on the
day and year first above written.

 
PARTICIPANT:
         
/s/ Glenn Mattes
   
Name: Glenn Mattes
                 
ARNO THERAPEUTICS, INC.
                 
By:
/s/ David M. Tanen
   
Name: David M. Tanen
Its:       President

 
 
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