Document:

EXHIBIT
10.25

 

RELIANT PHARMACEUTICALS,
INC.

 

2004 EQUITY INCENTIVE
PLAN

 

STOCK OPTION AGREEMENT

(Standard Options)

 

Unless
otherwise defined herein, capitalized terms shall have the same meanings as set
forth in the Reliant Pharmaceuticals, Inc. 2004 Equity Incentive Plan (as
amended from time to time, the “Plan”).

 

NOTICE OF OPTION GRANT

 

Bradley T. Sheares

[to his last known address as shown on the records
of the Company]

 

You
(the “Participant”) have been granted an
option to purchase Common Stock (the “Shares”)
in the Company, subject to the terms and conditions of the Plan and this Stock
Option Agreement (the “Option  Agreement”). The terms of your grant are set forth
below:  

 

	
  Grant Date:

  	
   

  	
   

  	
   

  	
  February 14, 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vesting Commencement Date

  	
   

  	
   

  	
   

  	
  January 15, 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
   

  	
   

  	
   

  	
  $22.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Shares Granted:

  	
   

  	
   

  	
   

  	
  400,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Exercise Price:

  	
   

  	
   

  	
   

  	
  $8,800,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  [          ]

  	
   

  	
  Incentive Stock Option

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [          ]

  	
   

  	
  Non-Qualified Stock Option

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
   

  	
   

  	
  January 14, 2017

  

 

Exercise
and Vesting Schedule:

 

This Option is exercisable only to the extent that it is vested. This Option shall vest according to the
following schedule:

 

Twenty-five percent (25%) of the Four Hundred Thousand (400,000) Shares
granted subject to the Option or One Hundred Thousand (100,000) Shares shall
vest on each anniversary of the Vesting Commencement Date, so that all of the
Shares granted shall be vested on the fourth (4th) anniversary of the Vesting
Commencement Date.

 

 

Notwithstanding the foregoing, (1) upon a “Change of
Control” (as defined in the Participant’s Employment Agreement dated
January 13, 2007, as amended from time to time, the “Employment
Agreement”), the Option shall become one hundred percent (100%) fully
vested and exercisable, and (2) if the Employment Agreement is terminated (a)
by the Company without “Cause” (as
defined in the Employment Agreement), (b) by Participant for “Good Reason” (as defined in the Employment Agreement), (c)
by reason of his death, or (d) by reason of “Disability”
(as defined in the Employment Agreement), Participant shall become vested on
his “Termination Date” (as defined in the
Employment Agreement) in the Option
to the extent the Participant would have been vested had the Participant
remained continuously employed by the Company through the second (2nd)
anniversary of such Termination Date.

 

Termination
Period:

 

Once
vested, this Option may be exercised at any time prior to the Expiration Date
as provided above.

 

I.                                         AGREEMENT

 

1.                                       Grant
of Option. The Company hereby grants to the Participant an Option to
purchase the number of Shares set forth in the Notice of Option Grant, at the
exercise price set forth in the Notice of Option Grant (the “Exercise Price”). Notwithstanding anything to the contrary
anywhere else in this Option Agreement, this grant of an Option is subject to
the terms, definitions and provisions of the Plan and the Stockholders’
Agreement dated April 1, 2004 (as amended from time to time, the “Stockholders’ Agreement”) which are incorporated herein by
reference.

 

If
designated in the Notice of Option Grant as an Incentive Stock Option, this
Option is intended to qualify as an Incentive Stock Option as defined in
Section 422 of the Code; provided, however, that to the
extent that the aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options (within the meaning of Code Section 422, but without
regard to Code Section 422(d)), including the Option, are exercisable for the
first time by the Participant during any calendar year (under the Plan and all
other incentive stock option plans of the Company or any Subsidiary) exceeds
$100,000, such options shall be treated as not qualifying under Code Section
422, but rather shall be treated as a Non-Qualified Stock Option to the extent
required by Code Section 422. The rule set forth in the preceding sentence
shall be applied by taking options into account in the order in which they were
granted. For purposes of these rules, the Fair Market Value of the Common Stock
shall be determined as of the time the option with respect to such stock is
granted.

 

2.                                       Exercise
of Option.

 

(a)                                  Right
to Exercise. This Option is exercisable as follows:

 

(i)                                     This
Option shall be exercisable cumulatively according to the vesting schedule set
forth in the Notice of Option Grant. For purposes of this Option Agreement,
this Option shall vest, except as otherwise provided herein, based on
Participant’s continued performance of services for the Company or any of its
Subsidiaries. If the Participant ceases to be an Employee, Director and
Consultant of the Company and all of its Subsidiaries (such date

 

2

 

being his “Termination of Service”),
then any portion of the Option which is not vested shall terminate and shall
not become exercisable.

 

(ii)                                  This
Option may not be exercised for fractional Shares;

 

(iii)                               In the event of
Participant’s death, Disability or other Termination of Service from the
Company and all Subsidiaries, the exercisability of the Option is governed by
Section 5 below; and

 

(iv)                              In
no event may this Option be exercised after the Expiration Date as set forth in
the Notice of Option Grant.

 

(b)                                 Method
of Exercise. This Option shall be exercisable by delivery of an executed
Exercise Notice (in the form attached as Exhibit A). The Exercise Notice
must state the number of Shares for which the Option is being exercised, and
such other representations and agreements with respect to such shares of Common
Stock as may be required by the Company pursuant to the provisions of the Plan.
The Exercise Notice must be signed by the Participant and shall be delivered in
person or by certified mail to the Secretary of the Company. The Exercise
Notice must be accompanied by payment of the Exercise Price, including payment
of any applicable withholding tax. This Option shall be deemed to be exercised
upon receipt by the Company of such written Exercise Notice accompanied by the
Exercise Price and payment of any applicable withholding tax.

 

(c)                                  Compliance
with Applicable Law. No Shares shall be issued pursuant to the exercise of
an Option unless such issuance and such exercise comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to the Participant on the date on
which the Option is exercised with respect to such Shares. However, for
purposes of voting or rights to receive dividends, the Shares will not be
considered issued to the Participant until the Participant is listed on the
books and records of the Company as the holder of such Shares.

 

3.                                       Participant’s
Representations. If the Shares purchasable pursuant to the exercise of this
Option have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), at the
time this Option is exercised, Participant shall concurrently with the exercise
of all or any portion of this Option, deliver to the Company his or her
Investment Representation Statement in the form attached hereto as Exhibit B.

 

4.                                       Method
of Payment. Payment of the Exercise Price shall be by any of the following,
or a combination thereof, at the election of the Participant:

 

(a)                                  cash;

 

(b)                                 check;

 

(c)                                  with
the consent of the Committee, surrender of other shares of Common Stock of the
Company which (A) in the case of Shares acquired from the Company, have been
owned by the Participant for more than six (6) months on the date of
surrender, and (B) have a

 

3

 

Fair Market Value on the date of surrender equal to the Exercise Price
of the Shares as to which the Option is being exercised;

 

(d)                                 with
the consent of the Committee, surrendered Shares issuable upon the exercise of
the Option having a Fair Market Value on the date of exercise equal to the
aggregate Exercise Price of the Option or exercised portion thereof;

 

(e)                                  with
the consent of the Committee, delivery of a notice that the Participant has
placed a market sell order with a broker with respect to Shares then issuable
upon exercise of the Option and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the aggregate Exercise Price; provided, that payment of
such proceeds is then made to the Company upon settlement of such sale; or

 

(f)                                    with
the consent of the Committee, property of any kind which constitutes good and
valuable consideration.

 

5.                                       Term
of Option. To the extent that this Option is not vested at the date
Participant incurs a Termination of Service, or if the Participant does not
exercise this Option within the time specified herein, the unvested portion of
the Option, or the Option, as applicable, shall terminate. This Option shall
terminate on the date Participant incurs a Termination of Service for Cause (as
defined in the Employment Agreement). Except as provided in this Section 5,
this Option may be exercised only within the term set out in the Notice of
Option Grant.

 

6.                                       Restrictions
on Shares . Participant hereby agrees that Shares purchased upon the
exercise of the Option shall be subject to such terms and conditions as set
forth in the attached Exercise Notice.

 

7.                                       Non-Transferability
of Option. This Option may not be transferred in any manner except by will
or by the laws of descent or distribution. It may be exercised during the
lifetime of Participant only by Participant. Notwithstanding the foregoing if
the Option is designated in the Notice of Option Grant as a Non-Qualified Stock
Option, then the Option may be transferred to the Participant’s Immediate
Family (as defined below); provided, however, that any such
transfer is without payment of any consideration whatsoever, that no such
transfer shall be valid unless first approved by the Committee, acting in its
sole discretion, and that any Option so transferred shall remain subject to the
terms and conditions of this Option agreement. The terms of this Option shall
be binding upon the executors, heirs, successors and assigns of the Participant.
For this purpose “Immediate Family”
shall mean Participant’s spouse, former spouse, children, step-children,
grandchildren, siblings, parents, step-parents, nieces, nephews, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law,
including adoptive relationships, and any person sharing the Participant’s
household (other than as a tenant, guest or employee), or trusts in which any
of the foregoing have more than a fifty percent interest, foundations in which
the foregoing (or the Participant) control the management of assets or any
other entity in which the foregoing persons (or the Participant) own more than
fifty percent of the voting interests.

 

[Signature Page Follows]

 

4

 

This Option Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one document.

 

	
   

  	
  RELIANT PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

PARTICIPANT
ACKNOWLEDGES AND AGREES THAT NEITHER THE TERMS AND PROVISIONS OF (A) THIS
AGREEMENT, NOR (B) THE COMPANY’S 2004 EQUITY INCENTIVE PLAN (AS AMENDED), WHICH
IS INCORPORATED BY REFERENCE HEREIN, SHALL EITHER (X) CONFER UPON PARTICIPANT
ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE
COMPANY, OR (Y) INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE COMPANY’S
RIGHT TO TERMINATE PARTICIPANT’S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR
WITHOUT, CAUSE OR NOTICE.

 

Participant
acknowledges receipt of a copy of the Plan and the Stockholders’ Agreement and
represents that he is familiar with the terms and provisions thereof. Participant
hereby accepts this Option subject to all of the terms and provisions thereof. Participant
has reviewed the Plan, the Stockholders’ Agreement and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option. Participant
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan or
this Option. Participant further agrees to notify the Company upon any change
in the residence address indicated below.

 

	
  Dated: February 14, 2007

  	
   

  
	
   

  	
  Bradley T. Sheares

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  [to his last known
  address as shown

  on the records of the Company]

  

 

5

 

EXHIBIT A

 

RELIANT PHARMACEUTICALS,
INC

 

2004 EQUITY INCENTIVE
PLAN

 

EXERCISE NOTICE

 

Reliant Pharmaceuticals, Inc.

110 Allen Road

Liberty Corner, New Jersey  07938

 

Attention: 
Secretary

 

1.                                       Exercise
of Option. Effective as of today,                       ,
          , the undersigned (“Participant”) hereby elects to exercise Participant’s option
to purchase (“Option”)       
shares of Common Stock (the “Shares”)
of Reliant Pharmaceuticals, Inc. (the “Company”) under
and pursuant to the Reliant Pharmaceuticals, Inc. 2004 Equity Incentive Plan
(as amended from time to time, the “Plan”) and the
Stock Option Agreement dated as of February 14, 2007, (as amended from time to
time, the “Option Agreement”).

 

2.                                       Representations
of Participant. Participant, without further action on his or her part, by purchase of
the Shares agrees to be deemed a party to, a signatory of and bound by the
Stockholders’ Agreement dated April 1, 2004 (as amended from time to time, the “Stockholders’ Agreement”), and the Shares
shall be subject to such rights and restrictions as contained therein.
Participant acknowledges that he or she has received, read and understood the
Plan, the Option Agreement, the Stockholders’ Agreement, and this Exercise
Notice and is familiar with their terms and provisions. Participant hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee  upon any
questions arising under this Exercise Notice.

 

3.                                       Rights
and Obligations as a Stockholder. Until the stock certificate evidencing
such Shares is issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder shall exist with
respect to Shares subject to the Option, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such stock certificate
promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued.

 

Participant
shall enjoy rights as a stockholder until such time as Participant disposes of
the Shares or the Company and/or its assignee(s) exercises the Right of First
Refusal provided in this Exercise Notice or otherwise in the Stockholders’
Agreement. Upon such exercise, Participant shall have no further rights as a
holder of the Shares so purchased except the right to receive payment for the
Shares so purchased in accordance with the provisions of this Exercise Notice
and the Stockholders’ Agreement, and Participant shall forthwith cause the
certificate(s) evidencing the Shares so purchased to be surrendered to the
Company for transfer or cancellation.

 

 

4.                                       Participant’s
Rights to Transfer Shares.

 

(a)                                  Limitations
on Transfer. Participant may transfer Shares subject to the restrictions
contained in this Section 4 and the Stockholders’ Agreement; provided,
that prior to a Public Offering (as defined in Section 4(d)) no Shares may be
transferred (i) to a direct competitor of the Company as determined by the
Board of Directors, or (ii) for consideration other than cash.

 

(b)                                 Company’s
Right of First Refusal. Before any Shares held by Participant or any
permitted transferee (each, a “Holder”) may be
sold, pledged, assigned, hypothecated, transferred or otherwise disposed of
(including transfer by gift or operation of law, collectively a “Transfer” or “Transferred”),
the Company or its assignee(s) shall have a right of first refusal to purchase
the Shares on the terms and conditions set forth in this Section 4 (the “Right of First Refusal”).

 

(i)                                     Notice
of Proposed Transfer. The Holder of the Shares shall deliver to the Company
a written notice (the “Notice”)
stating:  (i) the Holder’s bona fide
intention to sell or otherwise Transfer such Shares; (ii) the name of each
proposed Participant or other transferee (“Proposed Transferee”);
(iii) the number of Shares to be Transferred to each Proposed Transferee;
and (iv) the bona fide cash price for which the Holder proposes to
Transfer the Shares (the “Offered Price”),
and the Holder shall offer the Shares at the Offered Price to the Company or
its assignee(s).

 

(ii)                                  Exercise
of Right of First Refusal. Within thirty (30) days after receipt of the
Notice, the Company and/or its assignee(s) may elect in writing to purchase
all, but not less than all, of the Shares proposed to be Transferred to any one
or more of the Proposed Transferees. The purchase price will be determined in
accordance with subsection (iii) below.

 

(iii)                               Purchase Price. The
purchase price (“Purchase Price”) for the Shares
repurchased under this Section shall be the Offered Price. If the Offered Price
includes consideration other than cash, the cash equivalent of the non-cash
consideration will be determined by the Committee in good faith.

 

(iv)                              Payment.
Payment of the Purchase Price shall be made, at the option of the Company or
its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of repurchase
by an assignee, to the assignee), or by any combination thereof within thirty
(30) days after receipt of the Notice or in the manner and at the times set
forth in the Notice.

 

(v)                                 Holder’s
Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company
and/or its assignee(s) as provided in this Section, then subject to any rights
of first refusal or other restrictions on transfer contained in the
Stockholders’ Agreement, the Holder may sell or otherwise Transfer such Shares
to that Proposed Transferee at the Offered Price or at a higher price, provided
that such sale or other Transfer is consummated within one hundred twenty
(120) days after the date of the Notice and provided further that any such
sale or other Transfer is effected in accordance with any applicable securities
laws and the Proposed Transferee agrees in

 

2

 

writing to the provisions of this Section and shall continue to apply
to the Shares in the hands of such Proposed Transferee. If the Shares described
in the Notice are not Transferred to the Proposed Transferee within such
period, a new Notice shall be given to the Company, and the Company and/or its assignees
shall again be offered the Right of First Refusal as provided herein before any
Shares held by the Holder may be sold or otherwise Transferred. The Company’s
Right of First Refusal as contained herein shall be in addition to and arise
prior to any rights of first refusal contained in the Stockholders’ Agreement.

 

(c)                                  Exception
for Certain Family Transfers. Anything to the contrary contained in this
Section notwithstanding, the Transfer of any or all of the Shares during the
Participant’s lifetime or on the Participant’s death by will or intestacy to
the Participant’s Immediate Family or the Participant’s Immediate Family’s
trusts, foundations, partnerships and other family entities (as defined in the
Option Agreement) shall be exempt from the Right of First Refusal. In such
case, the transferee or other recipient shall receive and hold the Shares so
Transferred subject to the provisions of this Section 4, Section 5, and the
Stockholders’ Agreement, as applicable, and there shall be no further Transfer
of such Shares except in accordance with the terms of this Section.

 

(d)                                 Termination
of Right of First Refusal. The Right of First Refusal and the restrictions
on transfer set forth in Section 4(a) shall terminate as to all Shares ninety
(90) days after a sale of Common Stock to the general public pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended (a “Public Offering”).

 

5.                                       Company
Call Right.

 

(a)                                  If
Participant ceases to provide services to the Company and its Subsidiaries for
any reason, the Company shall have the right to purchase any or all of the
Shares then held by a Holder at a price equal to the  Fair
Market Value (as defined in the Plan) of the Shares on the date on which the
Participant ceases to provide such services (the “Call Right”).

 

(b)                                 The
Company may exercise the Company Call Right by delivering personally or by
registered mail to Holder, within ninety (90) days of the date on which
Participant ceases to provide services to the Company and its Subsidiaries, a
notice in writing indicating the Company’s intention to exercise the Company
Call Right and setting forth a date for closing not later than thirty (30) days
from the mailing of such notice. The closing shall take place at the Company’s
office.

 

(c)                                  At
its option, the Company may elect to make payment for the Shares to a bank
selected by the Company. The Company shall avail itself of this option by a
notice in writing to Holder stating the name and address of the bank, date of
closing, and waiving the closing at the Company’s office.

 

(d)                                 If
the Company does not elect to exercise the Company Call Right conferred above
by giving the requisite notice within ninety (90) days following the date on
which Participant ceases to provide services to the Company and its
Subsidiaries, the Company Call Right shall terminate.

 

3

 

(e)                                  The
Company Call Right shall terminate as to all Shares ninety (90) days after a
Public Offering.

 

6.                                       Lock-Up
Period. Participant hereby agrees that if so requested by the Company (or
any successor thereto) or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration
of the offering of any securities of the Company under the Securities Act,
Participant shall not sell or otherwise transfer any Shares or other securities
of the Company during the 180-day period (or such longer period as may be
requested in writing by the Managing Underwriter and agreed to in writing by
the Company) (the “Market Standoff Period”)
following the effective date of a registration statement of the Company filed
under the Securities Act; provided, however,
that such restriction shall apply only to the first registration statement of
the Company to become effective under the Securities Act that includes
securities to be sold on behalf of the Company to the public in an underwritten
public offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.

 

7.                                       Spousal
Consent. As a further condition to the Company’s and Participant’s
obligations under this Exercise Notice, the spouse of the Participant, if any,
shall execute and deliver to the Company the Consent of Spouse attached hereto
as Exhibit C.

 

8.                                       Restrictive
Legends and Stop-Transfer Orders.

 

(a)                                  Legends.
Participant understands and agrees that the Company shall cause the legends set
forth below or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by state or federal securities laws:

 

THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”)
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM
AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE
OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER
AND RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH IN THE EXERCISE NOTICE AND THE STOCKHOLDERS AGREEMENT DATED APRIL 1, 2004, AS AMENDED FROM
TIME TO TIME BY AND BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
SHARES, A COPY OF

 

4

 

WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND
RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

 

(b)                                 Stop-Transfer
Notices. Participant agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate “stop
transfer” instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.

 

(c)                                  Refusal
to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of
any of the provisions of the Stockholders’ Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

 

9.                                       No
Right to Employment. PARTICIPANT ACKNOWLEDGES AND AGREES THAT NEITHER THE
TERMS AND PROVISIONS OF (A) THIS EXERCISE NOTICE, NOR (B) THE COMPANY’S 2004
EQUITY INCENTIVE PLAN (AS AMENDED), WHICH IS INCORPORATED BY REFERENCE HEREIN,
SHALL EITHER (X) CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO CONTINUATION
OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, OR (Y) INTERFERE IN ANY WAY WITH
PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE PARTICIPANT’S
EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT, CAUSE OR NOTICE.

 

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

 

11.                                 Arbitration.
Except as provided in Section 13 hereof, in the event that there shall be
a dispute among the parties arising out of or relating to this Agreement, or
the breach thereof, the parties agree that such dispute shall be resolved by
final and binding arbitration in Newark, New Jersey, administered by the
American Arbitration Association (the “AAA”), in accordance with AAA’s
Commercial Arbitration Rules, to which shall be added the provisions of the
Federal Rules of Civil Procedure relating to the Production of Evidence, and
the parties agree that the arbitrators may impose sanctions in their discretion
to enforce compliance with discovery and other obligations. Such arbitration
shall be presided over by a single arbitrator. If the Participant, on the one
hand, and the Company, on the other hand, do not agree on the arbitrator within
fifteen (15) days after a party requests arbitration, the arbitrator shall be
selected by the Participant and the Company from a list of five (5) potential
arbitrators provided by AAA. Such list shall be provided within twenty five
(25) days of the request of any party for arbitration. The party requesting
arbitration shall delete one name from the list. The other party shall delete
one name from the list. This process shall then be repeated in the same order,
and the last remaining person on the list shall be the arbitrator. This
selection process shall take place within the two

 

5

 

(2) business days following both parties’ receipt of the list of five
(5) potential arbitrators. Hearings in the arbitration proceedings shall
commence within twenty (20) days of the selection of the arbitrator or as soon
thereafter as the arbitrator is available. The arbitrator shall deliver his or
her opinion within twenty (20) days after the completion of the arbitration
hearings. The arbitrator’s decision shall be final and binding upon the
parties, and may be entered and enforced in any court of competent jurisdiction
by either of the parties. The arbitrator shall have the power to grant
temporary, preliminary and permanent relief, including without limitation,
injunctive relief and specific performance. The arbitrator’s fees and expenses
shall be paid by the Company.

 

12.                                 Attorney’s
Fees. Without limiting Section 11 above, if any arbitration, proceeding, or other action is brought under this
Agreement, each party shall pay their own attorneys’ fees and costs in that
arbitration, proceeding, or action.

 

13.                                 Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts executed in and to be
performed entirely within that state. The parties irrevocably agree that all
actions to enforce an arbitrator’s decision pursuant to Section 11 of this
Agreement shall be instituted and litigated only in federal, state or local
courts sitting in Newark, New Jersey and each of such parties hereby consents
to the exclusive jurisdiction and venue of such court and waives any objection
based on forum non conveniens.

 

14.                                 WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE,
RELEASE AND RELINQUISH ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY ACTIONS TO ENFORCE AN ARBITRATOR’S DECISION PURSUANT TO
SECTION 11 OF THIS AGREEMENT.

 

15.                                 Severability. 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.

 

16.                                 Notices.
Any notice required or permitted hereunder shall be given in writing and shall
be deemed effectively given upon personal delivery or upon deposit in the
United States mail by certified mail, with postage and fees prepaid, addressed
to the other party at its address as shown below beneath its signature, or to
such other address as such party may designate in writing from time to time to
the other party. Participant further agrees to notify the Company upon any
change in the residence address indicated below.

 

17.                                 Further
Instruments. The parties agree to execute such further instruments and to
take such further action as may be reasonably necessary to carry out the
purposes and intent of this Exercise Notice.

 

18.                                 Delivery
of Payment. Participant herewith delivers to the Company the full Exercise
Price for the Shares, as well as any applicable withholding tax.

 

6

 

19.                                 Entire
Agreement. The Plan, Stockholders’ Agreement, Option Agreement, and
Employment Agreement are incorporated herein by reference. The Plan,
Stockholders’ Agreement, Option Agreement, Employment Agreement, Investment
Representation Statement and this Exercise Notice, if applicable, 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.

 

	
  Submitted by:

  	
  Accepted by:

  
	
   

  	
   

  
	
  PARTICIPANT:

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Bradley T. Sheares

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Its:

  	
   

  	
   

  
	
  [to his
  last known address as shown

  on the records of the Company]

  	
   

  
						

 

7

 

EXHIBIT B

 

INVESTMENT REPRESENTATION
STATEMENT

 

	
  PARTICIPANT:

  	
  BRADLEY T. SHEARES

  
	
   

  	
   

  
	
  COMPANY

  	
  :

  	
  RELIANT PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
  SECURITY

  	
  :

  	
  COMMON STOCK

  
	
   

  	
   

  	
   

  
	
  AMOUNT

  	
  :

  	
  400,000

  
	
   

  	
   

  	
   

  
	
  DATE

  	
  :

  	
                                                          

  	
   

  

 

In connection with the purchase of the above-listed Securities, the
undersigned Participant represents to the Company the following:

 

(a)                                  Participant is aware of the Company’s
business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
to acquire the Securities. Participant has received and read the financial
information provided by the Company and has had an opportunity to discuss the
Company’s business, management and financial affairs with the managers,
officers and other management personnel of the Company. Participant has also
had the opportunity to ask questions of and receive answers from, the Company
and its management regarding the risks, terms and conditions of this
investment.

 

(b)                                 Participant (i) has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its investment in these Securities, (ii) is able to
bear the complete loss of his investment in these Securities, and (iii) is an “accredited
investor” as that term is defined in Rule 501(a)(3) under the Securities Act of
1933, as amended (the “Securities Act”).

 

(c)                                  Participant is acquiring these Securities for
investment purposes for Participant’s own account only and not with a view to
distributing or resale of all or any part thereof in any transaction which
would constitute a “distribution”
within the meaning of the Securities Act. Participant acknowledges that none of
the Securities have been registered under the Securities Act and, except as may
be specifically agreed to by the Company, the Company is under no obligation to
file a registration statement with the Securities and Exchange Commission with
respect to all or any part of such Securities.

 

Participant acknowledges and understands that the Securities constitute
“restricted securities” under the
Securities Act and have not been registered under the Securities Act in
reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of Participant’s investment intent as
expressed herein. In this connection, Participant understands that, in the view
of the Securities and Exchange Commission, the statutory basis for such
exemption may be unavailable if Participant’s representation was predicated
solely upon a present intention to hold these Securities for the

 

 

minimum
capital gains period specified under tax statutes, for a deferred sale, for or
until an increase or decrease in the market price of the Securities, or for a
period of one year or any other fixed period in the future. Participant further
understands that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Participant has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of securities purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things:  the availability of certain current public information
about the Company, the resale occurring not less than one year after a party
has purchased and paid for the security to be sold, the sale being through an
unsolicited “broker’s transaction” or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended) and the number of shares being sold during any three-month period not
exceeding specified limitations.

 

	
   

  	
  Signature
  of Participant:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Bradley
  T. Sheares

  
	
   

  	
   

  
	
  Date:

  	
                         ,             

  	
   

  	
   

  	
   

  	
   

  
							

 

2

 

EXHIBIT C

 

CONSENT OF SPOUSE

 

I,                 ,
spouse of Bradley T. Sheares, have read and approve the foregoing Exercise
Notice. In consideration of granting of the right to my spouse to purchase
Common Stock of  Reliant Pharmaceuticals, Inc. as
set forth in the Option Agreement and the Exercise Notice, I hereby appoint my
spouse as my attorney-in-fact in respect to the exercise of any rights under
the Option Agreement and the Exercise Notice and agree to be bound by the
provisions of the Option Agreement and the Exercise Notice insofar as I may
have any rights in said Option Agreement and Exercise Notice or any shares
issued pursuant thereto under the community property laws or similar laws
relating to marital property in effect in the state of our residence as of the
date of the signing of the foregoing Exercise Notice.

 

	
   

  	
  Signature
  of Spouse:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:EXHIBIT 10.26

 

RELIANT PHARMACEUTICALS,
INC.

 

2004 EQUITY INCENTIVE
PLAN

 

STOCK OPTION AGREEMENT

(Super-performance Option)

 

Unless
otherwise defined herein, capitalized terms shall have the same meanings as set
forth in the Reliant Pharmaceuticals, Inc. 2004 Equity Incentive Plan (as
amended from time to time, the “Plan”).

 

NOTICE OF OPTION GRANT

 

Bradley T. Sheares

[to his last known address as shown on the records
of the Company]

 

You
(the “Participant”) have been granted an
option to purchase Common Stock (the “Shares”)
in the Company, subject to the terms and conditions of the Plan and this Stock
Option Agreement (the “Option  Agreement”). The terms of your grant are set forth below:

 

	
  Grant Date:

  	
   

  	
   

  	
   

  	
  February 14, 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vesting Commencement Date

  	
   

  	
   

  	
   

  	
  January 15, 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
   

  	
   

  	
   

  	
  $22.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Shares Granted:

  	
   

  	
   

  	
   

  	
  100,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Exercise Price:

  	
   

  	
   

  	
   

  	
  $2,200,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  [          ]

  	
   

  	
  Incentive Stock Option

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [          ]

  	
   

  	
  Non-Qualified Stock Option

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
   

  	
   

  	
  January 14, 2017

  

 

Exercise
and Vesting:

 

This Option is exercisable only to the extent that it is vested. This Option shall vest according to the
following schedule:

 

Twenty percent (20%) of the One Hundred Thousand (100,000) Shares granted
subject to the Option or Twenty Thousand (20,000) Shares shall vest on each
anniversary of the Vesting Commencement Date, so long as the goals (as
determined in the next two sentences of this

 

 

paragraph)
for the relevant year are satisfied in the reasonable discretion of the
Committee. The goals for the first installment of Twenty Thousand
(20,000) Shares shall be determined by the Committee in consultation with the
Executive, no later than July 15, 2007. The goals for the remaining four (4)
installments of Twenty Thousand (20,000) Shares each shall be determined by the
Compensation Committee in consultation with the Executive no later than January
31 of each year in which the relevant installment Option is eligible for
vesting. Failure to meet the goals for any year shall result in the related
installment of the Option that otherwise would have vested in such year to be
cancelled.

 

Termination Period:

 

Once
vested, this Option may be exercised at any time prior to the Expiration Date
as provided above.

 

I.                                         AGREEMENT

 

1.                                       Grant
of Option. The Company hereby grants to the Participant an Option to
purchase the number of Shares set forth in the Notice of Option Grant, at the
exercise price set forth in the Notice of Option Grant (the “Exercise Price”). Notwithstanding anything to the contrary
anywhere else in this Option Agreement, this grant of an Option is subject to
the terms, definitions and provisions of the Plan and the Stockholders’
Agreement dated April 1, 2004 (as amended from time to time, the “Stockholders’ Agreement”) which are incorporated herein by
reference.

 

If
designated in the Notice of Option Grant as an Incentive Stock Option, this
Option is intended to qualify as an Incentive Stock Option as defined in
Section 422 of the Code; provided, however, that to the
extent that the aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options (within the meaning of Code Section 422, but without
regard to Code Section 422(d)), including the Option, are exercisable for the first
time by the Participant during any calendar year (under the Plan and all other
incentive stock option plans of the Company or any Subsidiary) exceeds
$100,000, such options shall be treated as not qualifying under Code Section
422, but rather shall be treated as a Non-Qualified Stock Option to the extent
required by Code Section 422. The rule set forth in the preceding sentence
shall be applied by taking options into account in the order in which they were
granted. For purposes of these rules, the Fair Market Value of the Common Stock
shall be determined as of the time the option with respect to such stock is
granted.

 

2.                                       Exercise
of Option.

 

(a)                                  Right
to Exercise. This Option is exercisable as follows:

 

(i)                                     This
Option shall be exercisable cumulatively according to the vesting schedule set
forth in the Notice of Option Grant. For purposes of this Option Agreement,
this Option shall vest, except as otherwise provided herein, based on
Participant’s continued performance of services for the Company or any of its
Subsidiaries. If the Participant ceases to be an Employee, Director and
Consultant of the Company and all of its Subsidiaries (such date being his “Termination of Service”), then any portion of the Option
which is not vested shall terminate and shall not become exercisable.

 

2

 

(ii)                                  This
Option may not be exercised for fractional Shares;

 

(iii)                               In the event of
Participant’s death, Disability or other Termination of Service from the
Company and all Subsidiaries, the exercisability of the Option is governed by
Section 5 below; and

 

(iv)                              In
no event may this Option be exercised after the Expiration Date as set forth in
the Notice of Option Grant.

 

(b)                                 Method
of Exercise. This Option shall be exercisable by delivery of an executed
Exercise Notice (in the form attached as Exhibit A). The Exercise Notice
must state the number of Shares for which the Option is being exercised, and
such other representations and agreements with respect to such shares of Common
Stock as may be required by the Company pursuant to the provisions of the Plan.
The Exercise Notice must be signed by the Participant and shall be delivered in
person or by certified mail to the Secretary of the Company. The Exercise
Notice must be accompanied by payment of the Exercise Price, including payment
of any applicable withholding tax. This Option shall be deemed to be exercised
upon receipt by the Company of such written Exercise Notice accompanied by the
Exercise Price and payment of any applicable withholding tax.

 

(c)                                  Compliance
with Applicable Law. No Shares shall be issued pursuant to the exercise of
an Option unless such issuance and such exercise comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to the Participant on the date on
which the Option is exercised with respect to such Shares. However, for
purposes of voting or rights to receive dividends, the Shares will not be
considered issued to the Participant until the Participant is listed on the
books and records of the Company as the holder of such Shares.

 

3.                                       Participant’s
Representations. If the Shares purchasable pursuant to the exercise of this
Option have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), at the
time this Option is exercised, Participant shall concurrently with the exercise
of all or any portion of this Option, deliver to the Company his or her
Investment Representation Statement in the form attached hereto as Exhibit B.

 

4.                                       Method
of Payment. Payment of the Exercise Price shall be by any of the following,
or a combination thereof, at the election of the Participant:

 

(a)                                  cash;

 

(b)                                 check;

 

(c)                                  with
the consent of the Committee, surrender of other shares of Common Stock of the
Company which (A) in the case of Shares acquired from the Company, have been
owned by the Participant for more than six (6) months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal
to the Exercise Price of the Shares as to which the Option is being exercised;

 

3

 

(d)                                 with
the consent of the Committee, surrendered Shares issuable upon the exercise of
the Option having a Fair Market Value on the date of exercise equal to the
aggregate Exercise Price of the Option or exercised portion thereof;

 

(e)                                  with
the consent of the Committee, delivery of a notice that the Participant has
placed a market sell order with a broker with respect to Shares then issuable
upon exercise of the Option and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the aggregate Exercise Price; provided, that payment of
such proceeds is then made to the Company upon settlement of such sale; or

 

(f)                                    with
the consent of the Committee, property of any kind which constitutes good and
valuable consideration.

 

5.                                       Term
of Option. To the extent that this Option is not vested at the date
Participant incurs a Termination of Service, or if the Participant does not
exercise this Option within the time specified herein, the unvested portion of
the Option, or the Option, as applicable, shall terminate. This Option shall
terminate on the date Participant incurs a Termination of Service for Cause (as
defined in the Employment Agreement). Except as provided in this Section 5,
this Option may be exercised only within the term set out in the Notice of
Option Grant.

 

6.                                       Restrictions
on Shares . Participant hereby agrees that Shares purchased upon the
exercise of the Option shall be subject to such terms and conditions as set
forth in the attached Exercise Notice.

 

7.                                       Non-Transferability
of Option. This Option may not be transferred in any manner except by will
or by the laws of descent or distribution. It may be exercised during the
lifetime of Participant only by Participant. Notwithstanding the foregoing if
the Option is designated in the Notice of Option Grant as a Non-Qualified Stock
Option, then the Option may be transferred to the Participant’s Immediate
Family (as defined below); provided, however, that any such
transfer is without payment of any consideration whatsoever, that no such transfer
shall be valid unless first approved by the Committee, acting in its sole
discretion, and that any Option so transferred shall remain subject to the
terms and conditions of this Option agreement. The terms of this Option shall
be binding upon the executors, heirs, successors and assigns of the Participant.
For this purpose “Immediate Family”
shall mean Participant’s spouse, former spouse, children, step-children,
grandchildren, siblings, parents, step-parents, nieces, nephews, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law,
including adoptive relationships, and any person sharing the Participant’s
household (other than as a tenant, guest or employee), or trusts in which any
of the foregoing have more than a fifty percent interest, foundations in which
the foregoing (or the Participant) control the management of assets or any
other entity in which the foregoing persons (or the Participant) own more than
fifty percent of the voting interests.

 

[Signature Page Follows]

 

4

 

This Option Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one document.

 

	
   

  	
  RELIANT PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

PARTICIPANT
ACKNOWLEDGES AND AGREES THAT NEITHER THE TERMS AND PROVISIONS OF (A) THIS
AGREEMENT, NOR (B) THE COMPANY’S 2004 EQUITY INCENTIVE PLAN (AS AMENDED), WHICH
IS INCORPORATED BY REFERENCE HEREIN, SHALL EITHER (X) CONFER UPON PARTICIPANT
ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE
COMPANY, OR (Y) INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE COMPANY’S
RIGHT TO TERMINATE PARTICIPANT’S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR
WITHOUT, CAUSE OR NOTICE.

 

Participant
acknowledges receipt of a copy of the Plan and the Stockholders’ Agreement and
represents that he is familiar with the terms and provisions thereof. Participant
hereby accepts this Option subject to all of the terms and provisions thereof. Participant
has reviewed the Plan, the Stockholders’ Agreement and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option. Participant
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan or
this Option. Participant further agrees to notify the Company upon any change
in the residence address indicated below.

 

 

	
  Dated: February 14, 2007

  	
   

  
	
   

  	
  Bradley T. Sheares

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  [to his last known
  address as shown

  on the records of the Company]

  

 

5

 

EXHIBIT A

 

RELIANT PHARMACEUTICALS,
INC

 

2004 EQUITY INCENTIVE
PLAN

 

EXERCISE NOTICE

 

Reliant Pharmaceuticals, Inc.

110 Allen Road

Liberty Corner, New Jersey  07938

 

Attention: 
Secretary

 

1.                                       Exercise
of Option. Effective as of today,                       ,
          , the undersigned (“Participant”) hereby elects to exercise Participant’s option
to purchase (“Option”)       
shares of Common Stock (the “Shares”)
of Reliant Pharmaceuticals, Inc. (the “Company”) under
and pursuant to the Reliant Pharmaceuticals, Inc. 2004 Equity Incentive Plan
(as amended from time to time, the “Plan”) and the
Stock Option Agreement dated as of February 14, 2007, (as amended from time to
time, the “Option Agreement”).

 

2.                                       Representations
of Participant. Participant, without further action on his or her part, by purchase of
the Shares agrees to be deemed a party to, a signatory of and bound by the
Stockholders’ Agreement dated April 1, 2004 (as amended from time to time, the “Stockholders’ Agreement”), and the Shares
shall be subject to such rights and restrictions as contained therein.
Participant acknowledges that he or she has received, read and understood the
Plan, the Option Agreement, the Stockholders’ Agreement, and this Exercise
Notice and is familiar with their terms and provisions. Participant hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee  upon any
questions arising under this Exercise Notice.

 

3.                                       Rights
and Obligations as a Stockholder. Until the stock certificate evidencing
such Shares is issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder shall exist with
respect to Shares subject to the Option, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such stock certificate
promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued.

 

Participant
shall enjoy rights as a stockholder until such time as Participant disposes of
the Shares or the Company and/or its assignee(s) exercises the Right of First
Refusal provided in this Exercise Notice or otherwise in the Stockholders’
Agreement. Upon such exercise, Participant shall have no further rights as a
holder of the Shares so purchased except the right to receive payment for the
Shares so purchased in accordance with the provisions of this Exercise Notice and
the Stockholders’ Agreement, and Participant shall forthwith cause the
certificate(s) evidencing the Shares so purchased to be surrendered to the
Company for transfer or cancellation.

 

 

4.                                       Participant’s
Rights to Transfer Shares.

 

(a)                                  Limitations
on Transfer. Participant may transfer Shares subject to the restrictions
contained in this Section 4 and the Stockholders’ Agreement; provided,
that prior to a Public Offering (as defined in Section 4(d)) no Shares may be
transferred (i) to a direct competitor of the Company as determined by the
Board of Directors, or (ii) for consideration other than cash.

 

(b)                                 Company’s
Right of First Refusal. Before any Shares held by Participant or any
permitted transferee (each, a “Holder”) may be
sold, pledged, assigned, hypothecated, transferred or otherwise disposed of
(including transfer by gift or operation of law, collectively a “Transfer” or “Transferred”),
the Company or its assignee(s) shall have a right of first refusal to purchase
the Shares on the terms and conditions set forth in this Section 4 (the “Right of First Refusal”).

 

(i)                                     Notice
of Proposed Transfer. The Holder of the Shares shall deliver to the Company
a written notice (the “Notice”)
stating:  (i) the Holder’s bona fide
intention to sell or otherwise Transfer such Shares; (ii) the name of each
proposed Participant or other transferee (“Proposed Transferee”);
(iii) the number of Shares to be Transferred to each Proposed Transferee;
and (iv) the bona fide cash price for which the Holder proposes to Transfer
the Shares (the “Offered Price”), and the Holder
shall offer the Shares at the Offered Price to the Company or its assignee(s).

 

(ii)                                  Exercise
of Right of First Refusal. Within thirty (30) days after receipt of the
Notice, the Company and/or its assignee(s) may elect in writing to purchase
all, but not less than all, of the Shares proposed to be Transferred to any one
or more of the Proposed Transferees. The purchase price will be determined in
accordance with subsection (iii) below.

 

(iii)                               Purchase Price. The
purchase price (“Purchase Price”) for the Shares
repurchased under this Section shall be the Offered Price. If the Offered Price
includes consideration other than cash, the cash equivalent of the non-cash
consideration will be determined by the Committee in good faith.

 

(iv)                              Payment.
Payment of the Purchase Price shall be made, at the option of the Company or
its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of
repurchase by an assignee, to the assignee), or by any combination thereof
within thirty (30) days after receipt of the Notice or in the manner and at the
times set forth in the Notice.

 

(v)                                 Holder’s
Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company
and/or its assignee(s) as provided in this Section, then subject to any rights
of first refusal or other restrictions on transfer contained in the Stockholders’
Agreement, the Holder may sell or otherwise Transfer such Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other Transfer is consummated within one hundred twenty
(120) days after the date of the Notice and provided further that any such
sale or other Transfer is effected in accordance with any applicable securities
laws and the Proposed Transferee agrees in

 

2

 

writing to the provisions of this Section and shall continue to apply
to the Shares in the hands of such Proposed Transferee. If the Shares described
in the Notice are not Transferred to the Proposed Transferee within such
period, a new Notice shall be given to the Company, and the Company and/or its
assignees shall again be offered the Right of First Refusal as provided herein
before any Shares held by the Holder may be sold or otherwise Transferred. The
Company’s Right of First Refusal as contained herein shall be in addition to
and arise prior to any rights of first refusal contained in the Stockholders’
Agreement.

 

(c)                                  Exception
for Certain Family Transfers. Anything to the contrary contained in this
Section notwithstanding, the Transfer of any or all of the Shares during the
Participant’s lifetime or on the Participant’s death by will or intestacy to
the Participant’s Immediate Family or the Participant’s Immediate Family’s
trusts, foundations, partnerships and other family entities (as defined in the
Option Agreement) shall be exempt from the Right of First Refusal. In such
case, the transferee or other recipient shall receive and hold the Shares so
Transferred subject to the provisions of this Section 4, Section 5, and the
Stockholders’ Agreement, as applicable, and there shall be no further Transfer
of such Shares except in accordance with the terms of this Section.

 

(d)                                 Termination
of Right of First Refusal. The Right of First Refusal and the restrictions
on transfer set forth in Section 4(a) shall terminate as to all Shares ninety
(90) days after a sale of Common Stock to the general public pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended (a “Public Offering”).

 

5.                                       Company
Call Right.

 

(a)                                  If
Participant ceases to provide services to the Company and its Subsidiaries for
any reason, the Company shall have the right to purchase any or all of the
Shares then held by a Holder at a price equal to the  Fair
Market Value (as defined in the Plan) of the Shares on the date on which the
Participant ceases to provide such services (the “Call Right”).

 

(b)                                 The
Company may exercise the Company Call Right by delivering personally or by
registered mail to Holder, within ninety (90) days of the date on which
Participant ceases to provide services to the Company and its Subsidiaries, a
notice in writing indicating the Company’s intention to exercise the Company
Call Right and setting forth a date for closing not later than thirty (30) days
from the mailing of such notice. The closing shall take place at the Company’s
office.

 

(c)                                  At
its option, the Company may elect to make payment for the Shares to a bank
selected by the Company. The Company shall avail itself of this option by a
notice in writing to Holder stating the name and address of the bank, date of
closing, and waiving the closing at the Company’s office.

 

(d)                                 If
the Company does not elect to exercise the Company Call Right conferred above
by giving the requisite notice within ninety (90) days following the date on
which Participant ceases to provide services to the Company and its
Subsidiaries, the Company Call Right shall terminate.

 

3

 

(e)                                  The
Company Call Right shall terminate as to all Shares ninety (90) days after a
Public Offering.

 

6.                                       Lock-Up
Period. Participant hereby agrees that if so requested by the Company (or
any successor thereto) or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration
of the offering of any securities of the Company under the Securities Act,
Participant shall not sell or otherwise transfer any Shares or other securities
of the Company during the 180-day period (or such longer period as may be
requested in writing by the Managing Underwriter and agreed to in writing by
the Company) (the “Market Standoff Period”)
following the effective date of a registration statement of the Company filed
under the Securities Act; provided, however,
that such restriction shall apply only to the first registration statement of
the Company to become effective under the Securities Act that includes
securities to be sold on behalf of the Company to the public in an underwritten
public offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.

 

7.                                       Spousal
Consent. As a further condition to the Company’s and Participant’s
obligations under this Exercise Notice, the spouse of the Participant, if any,
shall execute and deliver to the Company the Consent of Spouse attached hereto
as Exhibit C.

 

8.                                       Restrictive
Legends and Stop-Transfer Orders.

 

(a)                                  Legends.
Participant understands and agrees that the Company shall cause the legends set
forth below or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by state or federal securities laws:

 

THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.

 

THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER
AND RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH IN THE EXERCISE NOTICE AND THE STOCKHOLDERS AGREEMENT DATED APRIL 1, 2004, AS AMENDED FROM
TIME TO TIME BY AND BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
SHARES, A COPY OF

 

4

 

WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND
RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

 

(b)                                 Stop-Transfer
Notices. Participant agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate “stop
transfer” instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the
same effect in its own records.

 

(c)                                  Refusal
to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of
any of the provisions of the Stockholders’ Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

 

9.                                       No
Right to Employment. PARTICIPANT ACKNOWLEDGES AND AGREES THAT NEITHER THE
TERMS AND PROVISIONS OF (A) THIS EXERCISE NOTICE, NOR (B) THE COMPANY’S 2004
EQUITY INCENTIVE PLAN (AS AMENDED), WHICH IS INCORPORATED BY REFERENCE HEREIN,
SHALL EITHER (X) CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO CONTINUATION
OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, OR (Y) INTERFERE IN ANY WAY WITH
PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE PARTICIPANT’S
EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT, CAUSE OR NOTICE.

 

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

 

11.                                 Arbitration.
Except as provided in Section 13 hereof, in the event that there shall be
a dispute among the parties arising out of or relating to this Agreement, or
the breach thereof, the parties agree that such dispute shall be resolved by
final and binding arbitration in Newark, New Jersey, administered by the
American Arbitration Association (the “AAA”), in accordance with AAA’s
Commercial Arbitration Rules, to which shall be added the provisions of the
Federal Rules of Civil Procedure relating to the Production of Evidence, and
the parties agree that the arbitrators may impose sanctions in their discretion
to enforce compliance with discovery and other obligations. Such arbitration
shall be presided over by a single arbitrator. If the Participant, on the one
hand, and the Company, on the other hand, do not agree on the arbitrator within
fifteen (15) days after a party requests arbitration, the arbitrator shall be
selected by the Participant and the Company from a list of five (5) potential
arbitrators provided by AAA. Such list shall be provided within twenty five
(25) days of the request of any party for arbitration. The party requesting
arbitration shall delete one name from the list. The other party shall delete
one name from the list. This process shall then be repeated in the same order,
and the last remaining person on the list shall be the arbitrator. This
selection process shall take place within the two

 

5

 

(2) business days following both parties’ receipt of the list of five
(5) potential arbitrators. Hearings in the arbitration proceedings shall
commence within twenty (20) days of the selection of the arbitrator or as soon
thereafter as the arbitrator is available. The arbitrator shall deliver his or
her opinion within twenty (20) days after the completion of the arbitration
hearings. The arbitrator’s decision shall be final and binding upon the
parties, and may be entered and enforced in any court of competent jurisdiction
by either of the parties. The arbitrator shall have the power to grant
temporary, preliminary and permanent relief, including without limitation,
injunctive relief and specific performance. The arbitrator’s fees and expenses
shall be paid by the Company.

 

12.                                 Attorney’s
Fees. Without limiting Section 11 above, if any arbitration, proceeding, or other action is brought under this
Agreement, each party shall pay their own attorneys’ fees and costs in that
arbitration, proceeding, or action.

 

13.                                 Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts executed in and to be
performed entirely within that state. The parties irrevocably agree that all
actions to enforce an arbitrator’s decision pursuant to Section 11 of this
Agreement shall be instituted and litigated only in federal, state or local
courts sitting in Newark, New Jersey and each of such parties hereby consents
to the exclusive jurisdiction and venue of such court and waives any objection
based on forum non conveniens.

 

14.                                 WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE,
RELEASE AND RELINQUISH ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY ACTIONS TO ENFORCE AN ARBITRATOR’S DECISION PURSUANT TO
SECTION 11 OF THIS AGREEMENT.

 

15.                                 Severability. 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.

 

16.                                 Notices.
Any notice required or permitted hereunder shall be given in writing and shall
be deemed effectively given upon personal delivery or upon deposit in the
United States mail by certified mail, with postage and fees prepaid, addressed
to the other party at its address as shown below beneath its signature, or to
such other address as such party may designate in writing from time to time to
the other party. Participant further agrees to notify the Company upon any
change in the residence address indicated below.

 

17.                                 Further
Instruments. The parties agree to execute such further instruments and to
take such further action as may be reasonably necessary to carry out the
purposes and intent of this Exercise Notice.

 

18.                                 Delivery
of Payment. Participant herewith delivers to the Company the full Exercise
Price for the Shares, as well as any applicable withholding tax.

 

6

 

19.                                 Entire
Agreement. The Plan, Stockholders’ Agreement, Option Agreement, and
Employment Agreement are incorporated herein by reference. The Plan,
Stockholders’ Agreement, Option Agreement, Employment Agreement, Investment
Representation Statement and this Exercise Notice, if applicable, 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.

 

	
  Submitted by:

  	
  Accepted by:

  
	
   

  	
   

  
	
  PARTICIPANT:

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Bradley T. Sheares

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Its:

  	
   

  	
   

  
	
  [to his
  last known address as shown

  on the records of the Company]

  	
   

  
						

 

7

 

EXHIBIT B

 

INVESTMENT REPRESENTATION
STATEMENT

 

	
  PARTICIPANT:

  	
  BRADLEY T. SHEARES

  
	
   

  	
   

  
	
  COMPANY

  	
  :

  	
  RELIANT PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
  SECURITY

  	
  :

  	
  COMMON STOCK

  
	
   

  	
   

  	
   

  
	
  AMOUNT

  	
  :

  	
  100,000

  
	
   

  	
   

  	
   

  
	
  DATE

  	
  :

  	
                                                          

  	
   

  

 

In connection with the purchase of the above-listed Securities, the
undersigned Participant represents to the Company the following:

 

(a)                                  Participant is aware of the Company’s
business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
to acquire the Securities. Participant has received and read the financial
information provided by the Company and has had an opportunity to discuss the
Company’s business, management and financial affairs with the managers,
officers and other management personnel of the Company. Participant has also
had the opportunity to ask questions of and receive answers from, the Company
and its management regarding the risks, terms and conditions of this
investment.

 

(b)                                 Participant (i) has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its investment in these Securities, (ii) is able to
bear the complete loss of his investment in these Securities, and (iii) is an “accredited
investor” as that term is defined in Rule 501(a)(3) under the Securities Act of
1933, as amended (the “Securities Act”).

 

(c)                                  Participant is acquiring these Securities for
investment purposes for Participant’s own account only and not with a view to
distributing or resale of all or any part thereof in any transaction which
would constitute a “distribution”
within the meaning of the Securities Act. Participant acknowledges that none of
the Securities have been registered under the Securities Act and, except as may
be specifically agreed to by the Company, the Company is under no obligation to
file a registration statement with the Securities and Exchange Commission with
respect to all or any part of such Securities.

 

Participant acknowledges and understands that the Securities constitute
“restricted securities” under the
Securities Act and have not been registered under the Securities Act in
reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of Participant’s investment intent as
expressed herein. In this connection, Participant understands that, in the view
of the Securities and Exchange Commission, the statutory basis for such
exemption may be unavailable if Participant’s representation was predicated
solely upon a present intention to hold these Securities for the

 

 

minimum
capital gains period specified under tax statutes, for a deferred sale, for or
until an increase or decrease in the market price of the Securities, or for a
period of one year or any other fixed period in the future. Participant further
understands that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Participant has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of securities purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things:  the availability of certain current public
information about the Company, the resale occurring not less than one year
after a party has purchased and paid for the security to be sold, the sale
being through an unsolicited “broker’s transaction” or in transactions directly
with a market maker (as said term is defined under the Securities Exchange Act
of 1934, as amended) and the number of shares being sold during any three-month
period not exceeding specified limitations.

 

 

	
   

  	
  Signature
  of Participant:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Bradley T. Sheares

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
  ,

  	
   

  	
   

  	
   

  
								

 

2

 

EXHIBIT C

 

CONSENT OF SPOUSE

 

I,                 ,
spouse of Bradley T. Sheares, have read and approve the foregoing Exercise
Notice. In consideration of granting of the right to my spouse to purchase
Common Stock of  Reliant Pharmaceuticals, Inc. as
set forth in the Option Agreement and the Exercise Notice, I hereby appoint my
spouse as my attorney-in-fact in respect to the exercise of any rights under
the Option Agreement and the Exercise Notice and agree to be bound by the
provisions of the Option Agreement and the Exercise Notice insofar as I may
have any rights in said Option Agreement and Exercise Notice or any shares
issued pursuant thereto under the community property laws or similar laws
relating to marital property in effect in the state of our residence as of the
date of the signing of the foregoing Exercise Notice.

 

	
   

  	
  Signature
  of Spouse:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]