exv10w34






Exhibit 10.34




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”).



BACKGROUND




     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.



3. Vesting.




     (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 Agreement shall confer upon the Participant any right to continue in the service of
the Company or interfere in any way with any right of the Company to terminate the Participant’s
service as an employee or consultant, as the case may be, at any time.




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7. Company Right of First Refusal.




     (a) Notice of Proposed Transfer. If the Participant proposes to sell, assign,
transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, “transfer”) any Shares acquired pursuant to this Agreement, then the Participant
shall first give written notice of the proposed transfer (the “Transfer Notice”) to the Company.
The Transfer Notice shall name the proposed transferee and state the number of such Shares the
Participant proposes to transfer (the “Offered Shares”), the price per share and all other material
terms and conditions of the transfer.



     (b) Company Right to Purchase. For 60 days following its receipt of such Transfer
Notice, the Company shall have the option to purchase all or part of the Offered Shares at the
price and upon the terms set forth in the Transfer Notice. In the event the Company elects to
purchase all or part of the Offered Shares, it shall give written notice of such election to the
Participant within such 60-day period. Within 10 days after his or her receipt of such notice, the
Participant shall tender to the Company at its principal offices the certificate or certificates
representing the Offered Shares to be purchased by the Company, duly endorsed in blank by the
Participant or with duly endorsed stock powers attached thereto, all in a form suitable for
transfer of the Offered Shares to the Company. Promptly following receipt of such certificate or
certificates, the Company shall deliver or mail to the Participant a check in payment of the
purchase price for such Offered Shares; provided that if the terms of payment set
forth in the Transfer Notice were other than cash against delivery, the Company may pay for the
Offered Shares on the same terms and conditions as were set forth in the Transfer Notice; and
provided further that any delay in making such payment shall not invalidate the
Company’s exercise of its option to purchase the Offered Shares.



     (c) Shares Not Purchased By Company. If the Company does not elect to acquire all of
the Offered Shares, the Participant may, within the 30-day period following the expiration of the
option granted to the Company under subsection (b) above, transfer the Offered Shares which the
Company has not elected to acquire to the proposed transferee, provided that such
transfer shall not be on terms and conditions more favorable to the transferee than those contained
in the Transfer Notice. Notwithstanding any of the above, all Offered Shares transferred pursuant
to this Section 7 shall remain subject to the right of first refusal set forth in this Section 7
and such transferee shall, as a condition to such transfer, deliver to the Company a written
instrument confirming that such transferee shall be bound by all of the terms and conditions of
this Section 7.



     (d) Consequences of Non-Delivery. After the time at which the Offered Shares are
required to be delivered to the Company for transfer to the Company pursuant to subsection (b)
above, the Company shall not pay any dividend to the Participant on account of such Offered Shares
or permit the Participant to exercise any of the privileges or rights of a stockholder with respect
to such Offered Shares, but shall, insofar as permitted by law, treat the Company as the owner of
such Offered Shares.



     (e) Exempt Transactions. The following transactions shall be exempt from the
provisions of this Section 7:



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          (1) any transfer of Shares to or for the benefit of any spouse, child or grandchild of the
Participant, or to a trust for their benefit;




          (2) any transfer pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”); and




          (3) the sale of all or substantially all of the shares of capital stock of the Company
(including pursuant to a merger or consolidation);



provided, however, that in the case of a transfer pursuant to clause (1) above,
such Shares shall remain subject to the right of first refusal set forth in this Section 7 and such
transferee shall, as a condition to such transfer, deliver to the Company a written instrument, in
a form reasonably satisfactory to the Company, confirming that such transferee shall be bound by
all of the terms and conditions of this Section 7.




     (f) Termination. The provisions of this Section 7 shall terminate upon the earlier of
the following events:



          (1) the closing of the sale of shares of Common Stock in an underwritten public offering
pursuant to an effective registration statement filed by the Company under the Securities Act;




          (2) the closing of a Change in Control Event; or




          (3) the consummation of the Critical Therapeutics Merger.




     (g) No Obligation to Recognize Invalid Transfer. The Company shall not be required
(1) to transfer on its books any of the Shares which shall have been sold or transferred in
violation of any of the provisions set forth in this Section 7, or (2) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have been so sold or
transferred.



     (h) Legends. The certificate representing Shares shall bear a legend substantially in
the following form (in addition to, or in combination with, any legend required by applicable
federal and state securities laws and agreements relating to the transfer of the Company
securities):




“The securities represented hereby have not been registered under the Securities Act
of 1933, as amended (the “Act”), or any state securities laws, and have been
acquired for investment and not with a view to distribution or resale. Such
securities may not be offered, sold or otherwise transferred, pledged or
hypothecated except (i) pursuant to an effective registration statement under the
Securities Act of 1933, as amended, and in compliance with applicable state
securities laws or (ii) in the opinion of counsel satisfactory to the issuer of
these securities, such offer, sale, transfer, pledge or hypothecation is in
compliance with the Act and any applicable state securities laws.



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The securities represented by this Certificate are subject to certain restrictions
on vesting and transfer, and a right of first refusal held by the issuer or its
assignee(s), as set forth in an Amended and Restated Restricted Stock Agreement,
dated as of August 20, 2008, and amended and restated as of October 31, 2008, as
such Agreement may be further amended, restated or modified from time to time, and
may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed
of except in accordance with the provisions thereof and any transferee of these
securities shall be subject to the terms of such Agreement. Copies of the foregoing
Agreement are maintained with the corporate records of the issuer and are available
for inspection at the principal offices of the issuer.”


8. Successors and Assigns of the Company. The rights of the Company under this Agreement
shall be transferable to any one or more persons or entities, and all covenants and agreements
hereunder shall inure to the benefit of, and be enforceable by, such transferees.



9. Tax Withholding. The Participant acknowledges and agrees that the Company may require
the Participant to pay, or may withhold from wages or other amounts paid by the Company to the
Participant, any amount that the Company, in its sole discretion, deems necessary to comply with
any federal, state or local withholding requirements for income and employment tax purposes.



10. Section 83(b) Election. The Participant hereby acknowledges that he may file a Section
83(b) election with the Internal Revenue Service within 30 days of the Grant Date, electing
thereby to be taxed on the fair market value of the Shares as of the Grant Date. Absent such an
election, ordinary income will be measured and recognized by the Participant as the shares vest
(that is, each year on the anniversary of the Vesting Commencement Date). If the Participant makes
a Section 83(b) election and later forfeits any Unvested Shares upon termination of service to the
Company, the Participant could suffer adverse tax consequences. The Participant is strongly
encouraged to seek the advice of his or her own tax consultants in connection with the grant of the
Shares and the advisability of filing of an election under Section 83(b) of the Internal Revenue
Code.





THE PARTICIPANT ACKNOWLEDGES THAT IT IS HIS OR HER SOLE RESPONSIBILITY AND NOT THE COMPANY’S
RESPONSIBILITY TO FILE THE ELECTION UNDER SECTION 83(b), EVEN IF THE PARTICIPANT REQUESTS
THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON THE PARTICIPANT’S BEHALF.


11. Agreement in Connection with Public Offering.




     The Participant agrees, in connection with either the Critical Therapeutics Merger or the
initial and any other underwritten public offering of the Company’s securities pursuant to a
registration statement under the Securities Act, (i) not to sell, make short sale of, loan, grant
any options for the purchase of, or otherwise dispose of any shares of Common Stock held by the
Participant (other than, if applicable, those shares included in the offering) without the prior
written consent of the Company or, if applicable, the underwriters managing such initial



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underwritten public offering of the Company’s securities for such number of days (not to
exceed 180 days) from the closing date of the Critical Therapeutics Merger or the effective date of
such registration statement, as applicable, as the Company or the managing underwriters, as
applicable, may require, and (ii) to execute any agreement reflecting clause (i) above as may be
requested by the Company or the managing underwriters, as applicable, at the time of the Critical
Therapeutics Merger or any such offering.


12. Notices. All notices by the Participant or the Participant’s assignees shall be
addressed to Cornerstone BioPharma Holdings, Inc., 2000 Regency Parkway Suite 255, Cary, NC 27518,
Attention: Human Resources, or such other address as the Company may from time to time specify.
All notices to the Participant shall be addressed to Participant at Participant’s address in the
Company’s records.



13. Governing Law. This Agreement shall be construed under and governed by the laws of the
State of North Carolina, without regard to the conflict of law provisions thereof.



14. Counterparts and Signature. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which together shall be
considered one and the same agreement. The exchange of copies of this Agreement or amendments
thereto and of signature pages by facsimile transmission or by e-mail transmission in portable
document format, or similar format, shall constitute effective execution and delivery of such
instrument(s) as to the parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile or by e-mail transmission in portable document
format, or similar format, shall be deemed to be their original signatures for all purposes.



15. Headings. The headings contained in this Agreement are for convenience of reference
only and shall not affect in any way the meaning or interpretation of this Agreement.



16. Entire Agreement. The Plan and the terms and conditions thereof are incorporated
herein by this reference. In the event of any conflict between the Plan and this Agreement, the
Plan shall control. Any defined terms used herein shall have the meanings set forth in the Plan,
except as otherwise defined herein. This Agreement and the Plan constitute the entire agreement of
the parties with respect to the subject matter hereof and may not be modified except by means of a
writing signed by the Participant and the Company.




[signature page follows]




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[Signature Page to Amended and Restated Restricted Stock Agreement]




     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed under its corporate
seal by its duly authorized officer. This Agreement shall take effect as a sealed instrument.



	 	 	 	 	 
	 	CORNERSTONE BIOPHARMA HOLDINGS, INC.

 	 
	 	By:  	/s/ Craig A. Collard
 	 
	 	 	Name:  	Craig A. Collard 	 
	 	 	Title:  	President & Chief Executive Officer 	 



 









 






	 	 	 	 	 



PARTICIPANT’S ACCEPTANCE





     The undersigned hereby accepts the foregoing restricted stock grant and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s
2005 Stock Incentive Plan.



	 	 	 	 	 
	 	PARTICIPANT:

 	 
	 	/s/ David Price
 	 
	 	Name:  	David Price 	 
	 
	 	Address:  	286 Masters Court

Kiawah Island, SC 29455 	 
	 




 









 








Exhibit A




ASSIGNMENT SEPARATE FROM STOCK CERTIFICATE





     FOR VALUE RECEIVED I, David Price, hereby assign and transfer unto Cornerstone BioPharma
Holdings, Inc. (the “Company”) shares of the Common Stock of the Company standing in my name on its
books and represented by Certificate No. ___. I do hereby irrevocably constitute and appoint
                                         to transfer such shares, with full power of
substitution in the premises.



     This Assignment may be used only in conjunction with the Amended and Restated Restricted Stock
Agreement between the Company and the undersigned entered into on August 20, 2008, and amended and
restated as of October 31, 2008.



Dated:                     , 2008




	 	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 
	 

	 	 	 	 

	 	 





INSTRUCTIONS: Do not complete any blanks other than the signature line. The sole purpose of this
assignment is to enable Unvested Shares to be transferred to the Company upon the termination of
the Participant’s service to the Company, as described in the Restricted Stock Agreement, without
requiring additional signatures on the part of the Participant.