SEC Form 4
FORM 4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
1. Name and Address of Reporting Person*
Hughes Stephen B

(Last) (First) (Middle)
C/O SMART BALANCE, INC.
6106 SUNRISE RANCH DRIVE

(Street)
LONGMONT CO 80503

(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
SMART BALANCE, INC. [ SMBL ]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
X Director 10% Owner
X Officer (give title below) Other (specify below)
Chairman and CEO
3. Date of Earliest Transaction (Month/Day/Year)
10/18/2012
4. If Amendment, Date of Original Filed (Month/Day/Year)
6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Stock (1) 10/18/2012 M 250,000 A (1) 1,331,586 D
Common Stock (1) 10/18/2012 F 102,700 D $12.55 1,228,886 D
Common Stock 101,000 I By Spouse
Common Stock 239,265 I Trust (2)
Common Stock 3,000 I By Son
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Restricted Stock Unit (1) (1) 10/18/2012 M 250,000 (3) 01/03/2022 Common Stock 250,000 $0 250,000 (4) D
Option toPurchase $9.85 11/19/2012 G V 425,000 (6) 05/21/2017 Common Stock 425,000 $0 325,000 (7) D
Explanation of Responses:
1. Each restricted stock unit was granted under the Second Amended and Restated Smart Balance, Inc. Stock and Awards Plan and represented a right to receive one share of Common Stock. A portion of the shares were withheld by the Company to satisfy tax withholding obligations in connection with the settlement of the restricted stock units.
2. Held in trust for Caroline Elise Hughes, John Trevelyn Hughes and Henry Thomas Hughes, adult family members not residing with Mr. Hughes. The reporting person disclaims beneficial ownership of these shares.
3. The restricted stock units vested upon completion of the performance goal, when the closing price for a share of common stock of the Company was at least $12 for 20 of 30 consecutive trading days.
4. The reporting person continues to hold 250,000 restricted stock units that vest, if at all, if the closing price for a share of common stock of the Company is at least $16 for 20 of 30 consecutive trading days.
5. On 11/16/2012, the reporting person transferred 425,000 options to Sunset Oasis Limited Partnership (the "Limited Partnership"), a Delaware limited partnership of which the reporting person was then the sole limited partner. 1% of these options were transferred as a capital contribution to Hughes Enterprises, LLC (the "General Partner"), a Delaware limited liability company which is the general partner of the Limited Partnership and then by the General Partner as a capital contribution to the Limited Partnership. The reporting person was the sole member of the General Partner at that time. On 11/19/2012, the reporting person transferred 100% of his interests in the Limited Partnership by assigning as a gifts (i) all rights in the General Partner to a sibling, and (ii) all of his Limited Partnership interests to his three children and his three siblings in varying percentages.
6. 50,000 of the stock options become exercisable, if at all, if the closing price for a share of common stock of the Company is at least $16.75 for 20 of 30 consecutive trading days and 375,000 of the stock options become exercisable, if at all, if the closing price for a share of common stock of the Company is at least $20.25 for 20 of 30 consecutive trading days.
7. The reporting person continues to hold 325,000 stock options with an expiration date of 5/21/17 that vest, if at all, if the closing price for a share of common stock of the Company is at least $16.75 for 20 of 30 consecutive trading days.
/s/ Stephen B. Hughes 12/28/2012
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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