Exhibit 10.1

CADENCE PHARMACEUTICALS, INC.

2006 EQUITY INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT AWARD GRANT NOTICE AND

RESTRICTED STOCK UNIT AWARD AGREEMENT

Cadence Pharmaceuticals, Inc., a Delaware corporation (the “Company”), pursuant
to its 2006 Equity Incentive Award Plan (the “Plan”), hereby grants to the
individual listed below (“Participant”), an award of restricted stock units
(“Restricted Stock Units” or “RSUs”) with respect to the number of shares of the
Company’s common stock, par value $0.0001 (the “Shares”). This award for
Restricted Stock Units (this “RSU Award”) is subject to all of the terms and
conditions as set forth herein and in the Restricted Stock Unit Award Agreement
attached hereto as Exhibit A (the “Restricted Stock Unit Agreement”) and the
Plan, each of which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings in this Grant Notice and the Restricted Stock Unit Agreement.

 

Participant:   

 

Grant Date:   

 

Total Number of RSUs:   

 

Distribution Schedule:    The RSUs shall be distributable in accordance with
Section 2.1(d) of the Restricted Stock Unit Agreement. Vesting Schedule:   

TO BE SPECIFIED IN INDIVIDUAL AGREEMENTS

By his or her signature and the Company’s signature below, Participant agrees to
be bound by the terms and conditions of the Plan, the Restricted Stock Unit
Agreement and this Grant Notice. Participant has reviewed the Restricted Stock
Unit Agreement, the Plan and this Grant Notice in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Grant Notice
and fully understands all provisions of this Grant Notice, the Restricted Stock
Unit Agreement and the Plan. Participant hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any
questions arising under the Plan, this Grant Notice or the Restricted Stock Unit
Agreement.

 

CADENCE PHARMACEUTICALS, INC.     PARTICIPANT By:  

 

    By:  

 

Print Name:  

 

    Print  

 

Title:  

 

    Name:  

 

Address:  

 

    Address:  

 

 

 

     

 

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EXHIBIT A

TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE

RESTRICTED STOCK UNIT AWARD AGREEMENT

Pursuant to the Restricted Stock Unit Award Grant Notice (the “Grant Notice”) to
which this Restricted Stock Unit Award Agreement (this “Agreement”) is attached,
the Company has granted to Participant the right to receive the number of RSUs
set forth in the Grant Notice, subject to all of the terms and conditions set
forth in this Agreement, the Grant Notice and the Plan.

ARTICLE I.

GENERAL

1.1 Defined Terms. Wherever the following terms are used in this Agreement they
shall have the meanings specified below, unless the context clearly indicates
otherwise. Capitalized terms not specifically defined herein shall have the
meanings specified in the Plan and the Grant Notice.

(a) “Termination of Consultancy” shall mean the time when the engagement of the
Participant as a Consultant to the Company or to a Parent or Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, by resignation, discharge, death or retirement, but excluding:
(i) terminations where there is a simultaneous employment or continuing
employment of the Participant by the Company or any Parent or Subsidiary, and
(ii) terminations where there is a simultaneous reestablishment of a consulting
relationship or continuing consulting relationship between the Participant and
the Company or any Parent or Subsidiary. The Committee, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including, but not by way of limitation, the
question of whether a particular leave of absence constitutes a Termination of
Consultancy. Notwithstanding any other provision of the Plan, the Company or any
Parent or Subsidiary has an absolute and unrestricted right to terminate a
Consultant’s service at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in writing.

(b) “Termination of Directorship” shall mean the time when the Participant, if
he or she is or becomes an Independent Director, ceases to be a Director for any
reason, including, but not by way of limitation, a termination by resignation,
failure to be elected, death or retirement. The Board, in its sole and absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Directorship with respect to Independent Directors.

(c) “Termination of Employment” shall mean the time when the employee-employer
relationship between the Participant and the Company or any Parent or Subsidiary
is terminated for any reason, with or without cause, including, but not by way
of limitation, a termination by resignation, discharge, death, Disability or
retirement; but excluding: (i) terminations where there is a simultaneous
reemployment or continuing employment of the Participant by the Company or any
Parent or Subsidiary, and (ii) terminations where there is a simultaneous
establishment of a consulting relationship or continuing consulting relationship
between the Participant and the Company or any Parent or Subsidiary. The
Committee, in its absolute discretion, shall determine the effect of all matters
and questions relating to Termination of Employment, including, but not by way
of limitation, the question of whether a particular leave of absence constitutes
a Termination of Employment.

 

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(d) “Termination of Services” shall mean the Participant’s Termination of
Consultancy, Termination of Directorship or Termination of Employment, as
applicable.

1.2 Incorporation of Terms of Plan. The RSU Award is subject to the terms and
conditions of the Plan which are incorporated herein by reference. In the event
of any inconsistency between the Plan and this Agreement, the terms of the Plan
shall control.

ARTICLE II.

AWARD OF RESTRICTED STOCK UNITS

2.1 Award of Restricted Stock Units.

(a) Award. In consideration of Participant’s continued employment with or
service to the Company or any Parent or Subsidiary thereof and for other good
and valuable consideration, the Company hereby grants to Participant the right
to receive the number of RSUs set forth in the Grant Notice, subject to all of
the terms and conditions set forth in this Agreement, the Grant Notice and the
Plan. Prior to actual issuance of any Shares, the RSUs and the RSU Award
represent an unsecured obligation of the Company, payable only from the general
assets of the Company.

(b) Vesting. The RSUs subject to the RSU Award shall vest in accordance with the
Vesting Schedule set forth in the Grant Notice. Unless and until the RSUs have
vested in accordance with the vesting schedule set forth in the Grant Notice,
Participant will have no right to any distribution with respect to such RSUs. In
the event of Participant’s Termination of Services prior to the vesting of all
of the RSUs, any unvested RSUs will terminate automatically without any further
action by the Company and be forfeited without further notice and at no cost to
the Company. Participant shall not be deemed to have a Termination of Services
merely because of a change in the capacity in which Participant renders service
to the Company or any Subsidiary or a change in the entity for which Participant
renders such service, unless following such change in capacity or service
Participant is no longer serving as an Employee, Independent Director or
consultant of the Company or any Subsidiary.

(c) Distribution of Shares.

(i) Except as provided in Section 2.1(d), shares of Stock shall be distributed
to Participant (or in the event of Participant’s death, to his or her estate)
with respect to such Participant’s vested RSUs following the vesting date of the
RSUs as specified in the Vesting Schedule set forth in the Grant Notice, subject
to the terms and provisions of the Plan and this Agreement.

(ii) All distributions shall be made by the Company in the form of whole shares
of Stock.

(iii) Neither the time nor form of distribution of Stock with respect to the
RSUs may be changed, except as may be permitted by the Committee in accordance
with the Plan and Section 409A of the Code and the Treasury Regulations
thereunder.

(d) Deferral Election.

(i) If Participant makes a valid deferral election within thirty days following
the Grant Date, then Participant may elect to defer the timing of receipt of the
Stock otherwise distributable under Section 2.1(c) to a later date. Any such
deferral election must comply with the requirements of Section 409A of the Code
and the Treasury Regulations or other guidance issued thereunder as well as any
Plan rules on deferrals and must be made on a form approved by the Company.

 

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(ii) If Participant is a “specified employee” (as determined in accordance with
Section 409A(a)(2)(B)(i) of the Code and Treasury Regulation
Section 1.409A-1(i)) on the date of his or her “separation from service” (as
defined in Section 1.409A-1(h) of the Treasury Regulations), the delivery of any
shares of Stock to be delivered to Participant upon such “separation from
service” shall be delayed to the extent necessary to avoid a prohibited
distribution under Section 409A(2)(B)(i) of the Code, and such shares of Stock
shall be distributed to Participant on the earlier of (A) the expiration of the
six-month period measured from the date of Participant’s “separation from
service,” (B) the date of Participant’s death, or (C) such earlier date as is
permitted under Section 409A of the Code and the Treasury Regulations
thereunder.

(iii) Notwithstanding any deferral election made by Participant pursuant to this
Section 2.1(d), all shares of Stock will be distributed to Participant in
satisfaction of the vested portion of the RSU Award upon a Change in Control (so
long as such Change in Control also constitutes a change in the ownership or
effective control of the Company, or a change in the ownership of a substantial
portion of the assets of the Company, within the meaning of
Section 409A(a)(2)(A)(v) of the Code and Section 1.409A-3(i)(5) of the Treasury
Regulations) or within thirty days following the date of Participant’s death.

(iv) Notwithstanding any deferral election made by Participant pursuant to this
Section 2.1(d), in the event Participant has an “unforeseeable emergency”
resulting in severe financial hardship to Participant, Participant may elect to
receive an earlier delivery of the shares of Stock with respect to the vested
portion of his or her RSU Award in accordance with the applicable rules under
Section 409A of the Code and the Treasury Regulations thereunder. An
“unforeseeable emergency” means Participant’s severe financial hardship
resulting from (A) an illness of Participant, Participant’s spouse or
Participant’s dependent, (B) loss of Participant’s property due to casualty, or
(C) other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond Participant’s control. An “unforeseeable emergency”
means your severe financial hardship resulting from (i) an illness of yours,
your spouse or your dependent, (ii) loss of your property due to casualty or
(iii) other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond your control. The determination of whether you have an
unforeseeable emergency is made by the Committee, in its sole discretion. To
apply for such a distribution, Participant must file a request indicating the
nature of the unforeseeable emergency, the amount of Participant’s financial
hardship as well as whether or not the hardship may be relieved through
insurance or through the disposition of other assets. If the Committee
determines that Participant qualifies, then the shares of Stock to be delivered
to Participant cannot have a value in excess of the amount necessary to satisfy
Participant’s hardship, plus an amount necessary to pay taxes reasonably
anticipated as a result of such distribution. This must be approved by the
Committee, in its sole discretion, after taking into account the extent to which
Participant could satisfy the hardship through reimbursement or compensation by
insurance or otherwise or by liquidation of such of Participant’s assets as
would not itself cause severe financial hardship and as otherwise required by
law.

(e) Generally. Shares issued under the RSU Award shall be issued to Participant
or Participant’s beneficiaries, as the case may be, at the sole discretion of
the Committee, in either (i) uncertificated form, with the Shares recorded in
the name of Participant in the books and records of the Company’s transfer agent
with appropriate notations regarding the restrictions on transfer imposed
pursuant to this Agreement; or (ii) certificate form.

 

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2.2 Tax Withholding. Notwithstanding any other provision of this Agreement
(including, without limitation, Section 2.1(b) hereof):

(a) The Company has the authority to deduct or withhold, or require Participant
to remit to the Company, an amount sufficient to satisfy applicable federal,
state, local and foreign taxes (including any FICA obligation) required by law
to be withheld with respect to any taxable event arising from the receipt of the
Shares upon settlement of the RSUs. To the maximum extent permitted by law, the
Company has the right to retain, without notice, from Shares issuable under the
RSU Award or from other compensation payable to Participant, shares of Stock or
cash having a value sufficient to satisfy Participant’s tax withholding
obligation.

(b) At any time not less than five business days before any such tax withholding
obligation arises, Participant may elect to satisfy his or her tax obligation,
in whole or in part, by either: (i) electing to have the Company withhold from
other cash compensation payable to Participant or Shares otherwise to be
delivered to Participant pursuant to the RSU Award with a Fair Market Value
equal to the minimum amount of the tax withholding obligation, or (ii) paying
the amount of the tax withholding obligation directly to the Company in cash.
Unless Participant chooses to satisfy his or her tax withholding obligation in
accordance with clause (ii) above, Participant’s tax withholding obligation may
be automatically satisfied in accordance with clause (i) above. The Committee
will have the right to disapprove an election to pay Participant’s tax
withholding obligation under clause (ii) in its sole discretion. In the event
Participant’s tax withholding obligation will be satisfied under clause
(i) above, then the Company, upon approval of the Committee, may elect (in lieu
of withholding the applicable withholding taxes from other cash compensation
payable to Participant or Shares to be delivered to Participant pursuant to the
RSU Award) to instruct any brokerage firm determined acceptable to the Company
for such purpose to sell on Participant’s behalf a whole number of shares from
those Shares issuable to Participant upon settlement of the RSUs as the Company
determines to be appropriate to generate cash proceeds sufficient to satisfy
Participant’s tax withholding obligation. Participant’s acceptance of this RSU
Award constitutes Participant’s instruction and authorization to the Company and
such brokerage firm to complete the transactions described in clause (i) above,
including the transactions described in the previous sentence, as applicable.
Any Shares to be sold at the Company’s direction through a broker-assisted sale
will be sold on the day the tax withholding obligation arises (i.e., the date
Stock is delivered) or as soon thereafter as practicable. The Shares may be sold
as part of a block trade with other participants of the Plan in which all
participants receive an average price. Participant will be responsible for all
broker’s fees and other costs of sale, and Participant agrees to indemnify and
hold the Company harmless from any losses, costs, damages, or expenses relating
to any such sale. To the extent the proceeds of such sale exceed Participant’s
tax withholding obligation, the Company agrees to pay such excess in cash to
Participant as soon as practicable. Participant acknowledges that the Company or
its designee is under no obligation to arrange for such sale at any particular
price, and that the proceeds of any such sale may not be sufficient to satisfy
Participant’s tax withholding obligation. The Company may refuse to issue any
Shares in settlement of the RSU Award to Participant until the foregoing tax
withholding obligations are satisfied.

ARTICLE III.

OTHER PROVISIONS

3.1 RSU Award and Interests Not Transferable. This RSU Award and the rights and
privileges conferred hereby, including the RSUs awarded hereunder, shall not be
liable for the debts, contracts or engagements of Participant or his or her
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect.

 

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3.2 Rights as Stockholder. Neither Participant nor any person claiming under or
through Participant shall have any of the rights or privileges of a stockholder
of the Company in respect of any Shares issuable hereunder unless and until
certificates representing such Shares (which may be in uncertificated form) will
have been issued and recorded on the books and records of the Company or its
transfer agents or registrars, and delivered to Participant (including through
electronic delivery to a brokerage account). After such issuance, recordation
and delivery, Participant shall have all the rights of a stockholder of the
Company, including with respect to the right to vote the Shares and the right to
receive any cash or share dividends or other distributions paid to or made with
respect to the Shares.

3.3 Adjustments. The Participant acknowledges that the RSU Award is subject to
modification and termination in certain events as provided in this Agreement and
Article 11 of the Plan.

3.4 Not a Contract of Employment or other Service Relationship. Nothing in this
Agreement or in the Plan shall confer upon Participant any right to continue to
serve as an employee or other service provider of the Company or any of its
affiliates.

3.5 Construction. This Agreement shall be administered, interpreted and enforced
under the laws of the State of Delaware without regard to conflicts of laws
thereof. Should any provision of this Agreement be determined by a court of law
to be illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.

3.6 Conformity to Securities Laws. Participant acknowledges that the Plan and
this Agreement are intended to conform to the extent necessary with all
provisions of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and any and all
regulations and rules promulgated thereunder by the U.S. Securities and Exchange
Commission, including, without limitation, Rule 16b-3 under the Exchange Act.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Awards are granted, only in such a manner as to conform to such laws,
rules and regulations. To the extent permitted by applicable law, the Plan and
this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

3.7 Amendment, Suspension and Termination. To the extent permitted by the Plan,
this Agreement may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Committee or the
Board, provided, that, except as may otherwise be provided by the Plan, no
amendment, modification, suspension or termination of this Agreement shall
adversely effect the Option in any material way without the prior written
consent of the Participant.

3.8 Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of the Secretary of the
Company at the address given beneath the signature of an authorized officer of
the Company on the Grant Notice, and any notice to be given to Participant shall
be addressed to Participant at the address given beneath Participant’s signature
on the Grant Notice. By a notice given pursuant to this Section 3.8, either
party may hereafter designate a different address for notices to be given to
that party. Any notice shall be deemed duly given when sent via email or when
sent by certified mail (return receipt requested) and deposited (with postage
prepaid) in a post office or branch post office regularly maintained by the
United States Postal Service.

3.9 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Participant and his or her heirs, executors, administrators, successors and
assigns.

 

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3.10 Section 409A.

(a) Notwithstanding any other provision of the Plan, this Agreement or the Grant
Notice, the Plan, this Agreement and the Grant Notice shall be interpreted in
accordance with, and incorporate the terms and conditions required by,
Section 409A of the Code (together with any Department of Treasury regulations
and other interpretive guidance issued thereunder, including without limitation
any such regulations or other guidance that may be issued after the date hereof,
“Section 409A”). The Committee may, in its discretion, adopt such amendments to
the Plan, this Agreement or the Grant Notice or adopt other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, as the Committee determines are necessary or
appropriate to comply with the requirements of Section 409A.

(b) Unless a deferral election is made by Participant pursuant to Section 2.1(d)
above, this Agreement is not intended to provide for any deferral of
compensation subject to Section 409A of the Code, and, accordingly, the Shares
issuable pursuant to the RSUs hereunder shall be distributed to Participant no
later than the later of: (i) the fifteenth (15th) day of the third month
following Participant’s first taxable year in which such RSUs are no longer
subject to a substantial risk of forfeiture, and (ii) the fifteenth (15th) day
of the third month following first taxable year of the Company in which such
RSUs are no longer subject to substantial risk of forfeiture, as determined in
accordance with Section 409A and any Treasury Regulations and other guidance
issued thereunder.

3.11 Tax Representations. Participant has reviewed with Participant’s own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by the Grant Notice and this
Agreement. Participant is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. Participant
understands that Participant (and not the Company) shall be responsible for
Participant’s own tax liability that may arise as a result of this investment or
the transactions contemplated by this Agreement.

3.12 Entire Agreement. The Plan, the Grant Notice and this Agreement (including
all exhibits thereto) constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the Company
and Participant with respect to the subject matter hereof.

3.13 Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.

3.14 Governing Law; Severability. The laws of the State of Delaware shall govern
the interpretation, validity, administration, enforcement and performance of the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.

 

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