NAPSTER, INC. DIRECTOR RESTRICTED STOCK AWARD AGREEMENT
EXHIBIT
10.2
NAPSTER,
INC.
2001
STOCK PLAN
THIS
DIRECTOR RESTRICTED STOCK AWARD AGREEMENT
(this
“Agreement”)
is
dated as of [____________,
200_]
(the
“Award
Date”)
by and
between Napster, Inc., a Delaware corporation (the “Corporation”),
and
[______________]
(the
“Director”).
W
I T N E S S E T H
WHEREAS,
pursuant to the Napster, Inc. 2001 Stock Plan, as amended (the “Plan”),
the
Corporation hereby grants to the Director, effective as of the date hereof,
a
restricted stock award (the “Award”),
upon
the terms and conditions set forth herein and in the Plan.
NOW
THEREFORE,
in
consideration of services rendered and to be rendered by the Director, and
the
mutual promises made herein and the mutual benefits to be derived therefrom,
the
parties agree as follows:
1. Defined
Terms.
Capitalized terms used herein and not otherwise defined herein shall have
the
meaning assigned to such terms in the Plan.
2. Grant.
Subject
to the terms of this Agreement, the Corporation hereby grants to the Director
an
Award with respect to an aggregate of [________]
restricted shares of Common Stock of the Corporation (the “Restricted
Stock”).
3. Vesting.
Subject
to Section 8 below, the Award shall vest, and restrictions (other than those
set
forth in Section 16 of the Plan) shall lapse, with respect to 6.25%
of the
total number of shares of Restricted Stock (subject to adjustment under
Section 13 of the Plan) on each three-month anniversary of the Award
Date.
If the Award Date is the 29th, 30th or 31st of a month and a three-month
anniversary of such date is scheduled to occur in a month that does not contain
29, 30 or 31 days, as applicable, the applicable installment of the Restricted
Stock shall instead be deemed to vest on the last day of the relevant month.
The
Board reserves the right to accelerate the vesting of the Restricted Stock
in
such circumstances as it, in its sole discretion, deems appropriate and any
such
acceleration shall be effective only when set forth in a written instrument
executed by an officer of the Corporation.
4. Continuance
of Services.
The
vesting schedule requires continued service through each applicable vesting
date
as a condition to the vesting of the applicable installment of the Award
and the
rights and benefits under this Agreement. Partial service, even if substantial,
during any vesting period will not entitle the Director to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of services as provided in Section 8 below or under
the
Plan. Nothing contained in this Agreement or the Plan constitutes a continued
service commitment by the Corporation, confers upon the Director any right
to
remain in service to the Corporation or any of its Subsidiaries, interferes
in
any way with the right of the Corporation or any of its Subsidiaries at any
time
to terminate such services, or affects the right of the Corporation or any
of
its Subsidiaries to increase or decrease the Director’s other compensation or
benefits. Nothing in this paragraph, however, is intended to adversely affect
any independent contractual right of the Director without his or her consent
thereto.
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5. Dividend
and Voting Rights.
After
the Award Date, the Director shall be entitled to cash dividends and voting
rights with respect to the shares of Restricted Stock subject to the Award
even
though such shares are not vested, provided that such rights shall terminate
immediately as to any shares of Restricted Stock that are forfeited pursuant
to
Section 8 below.
6. Restrictions
on Transfer.
Prior
to the time that they have become vested pursuant to Section 3 hereof or
Section 20(g)(iii) of the Plan, neither the Restricted Stock, nor
any
interest therein, amount payable in respect thereof, or Restricted Property
(as
defined in Section 9 hereof) may be sold, assigned, transferred, pledged
or
otherwise disposed of, alienated or encumbered, either voluntarily or
involuntarily. The transfer restrictions in the preceding sentence shall
not
apply to transfers to the Corporation.
7. Stock
Certificates.
(a) Book
Entry Form.
The
Corporation shall issue the shares of Restricted Stock subject to the Award
either: (a) in certificate form as provided in Section 7(b) below; or (b)
in
book entry form, registered in the name of the Director with notations regarding
the applicable restrictions on transfer imposed under this
Agreement.
(b) Certificates
to be Held by Corporation; Legend.
Any
certificates representing shares of Restricted Stock that may be delivered
to
the Director by the Corporation prior to vesting shall be redelivered to
the
Corporation to be held by the Corporation until the restrictions on such
shares
shall have lapsed and the shares shall thereby have become vested or the
shares
represented thereby have been forfeited hereunder. Such certificates shall
bear
the following legend and any other legends the Corporation may determine
to be
necessary or advisable to comply with all applicable laws, rules, and
regulations:
“The
ownership of this certificate and the shares of stock evidenced hereby and
any
interest therein are subject to substantial restrictions on transfer under
an
Agreement entered into between the registered owner and Napster, Inc. A copy
of
such Agreement is on file in the office of the Secretary of Napster,
Inc.”
(c) Delivery
of Certificates Upon Vesting.
Promptly after the vesting of any shares of Restricted Stock pursuant to
Section
3 hereof or Section 20(g)(iii) of the Plan, the Corporation shall, as
applicable, either remove the notations on any shares of Restricted Stock
issued
in book entry form which have vested or deliver to the Director a certificate
or
certificates evidencing the number of shares of Restricted Stock which have
vested (or, in either case, such lesser number of shares as may be permitted
pursuant to Section 10 hereof. The Director (or the beneficiary or personal
representative of the Director in the event of the Director’s death or
disability, as the case may be) shall deliver to the Corporation any
representations or other documents or assurances as the Corporation or its
counsel may determine to be necessary or advisable in order to ensure compliance
with all applicable laws, rules, and regulations with respect to the grant
of
the Award and the delivery of shares of Common Stock in respect thereof.
The
shares so delivered shall no longer be restricted shares hereunder.
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(d) Stock
Power; Power of Attorney.
Concurrently with the execution and delivery of this Agreement, the Director
shall deliver to the Corporation an executed stock power in the form attached
hereto as Exhibit
A,
in
blank, with respect to such shares. The Corporation shall not deliver any
share
certificates in accordance with this Agreement unless and until the Corporation
shall have received such stock power executed by the Director. The Director,
by
acceptance of the Award, shall be deemed to appoint, and does so appoint
by
execution of this Agreement, the Corporation and each of its authorized
representatives as the Director’s attorney(s)-in-fact to effect any transfer of
unvested forfeited shares (or shares otherwise reacquired by the Corporation
hereunder) to the Corporation as may be required pursuant to the Plan or
this
Agreement and to execute such documents as the Corporation or such
representatives deem necessary or advisable in connection with any such
transfer.
8. Effect
of Termination of Employment or Services.
If
the
Director ceases to be a member of the Board (regardless of the reason, whether
with or without cause, voluntarily or involuntarily, or due to death or
disability), the Director’s shares of Restricted Stock (and related Restricted
Property as defined in Section 9 hereof) shall be forfeited to the Corporation
to the extent such shares have not become vested pursuant to Section 3 hereof
or
Section 20(g)(iii) of the Plan upon the Severance Date (as defined below).
Upon
the occurrence of any forfeiture of shares of Restricted Stock hereunder,
such
unvested, forfeited shares and related Restricted Property shall be
automatically transferred to the Corporation as of the Severance Date, without
any other action by the Director (or the Director’s beneficiary or personal
representative in the event of the Director’s death or disability, as
applicable). No consideration shall be paid by the Corporation with respect
to
such transfer. The Corporation may exercise its powers under Section 7(d)
hereof
and take any other action necessary or advisable to evidence such transfer.
The
Director (or the Director’s beneficiary or personal representative in the event
of the Director’s death or disability, as applicable) shall deliver any
additional documents of transfer that the Corporation may request to confirm
the
transfer of such unvested, forfeited shares and related Restricted Property
to
the Corporation. Notwithstanding anything to the contrary in this Section
8, the
Director’s “Severance
Date”
shall
be the last day that the Director is a member of the Board; provided, however,
that if the Director ceases to be a member of the Board (regardless of the
reason) but, immediately thereafter, is employed by the Corporation or one
of
its Subsidiaries, the Director’s Severance Date shall not be the date the
Director ceases to be a member of the Board but instead shall be the last
day
that the Director is either or both (1) a member of the Board and/or (2)
employed by the Corporation or a Subsidiary.
9. Adjustments
Upon Specified Events.
Upon
the occurrence of certain events relating to the Corporation’s stock
contemplated by Section 13(a) of the Plan, the Administrator shall make
adjustments if appropriate in the number and kind of securities that may
become
vested under the Award. If any adjustment shall be made under Section 13(a)
of
the Plan or an event described in Section 13(f)(i) of the Plan shall occur
and
the shares of Restricted Stock are not fully vested upon such event or prior
thereto, the restrictions applicable to such shares of Restricted Stock shall
continue in effect with respect to any consideration, property or other
securities (the “Restricted
Property”
and,
for the purposes of this Agreement, “Restricted Stock” shall include “Restricted
Property”, unless the context otherwise requires) received in respect of such
Restricted Stock. Such Restricted Property shall vest at such times and in
such
proportion as the shares of Restricted Stock to which the Restricted Property
is
attributable vest, or would have vested pursuant to the terms hereof if such
shares of Restricted Stock had remained outstanding. To the extent that the
Restricted Property includes any cash (other than regular cash dividends),
such
cash shall be invested, pursuant to policies established by the Administrator,
in interest bearing, FDIC-insured (subject to applicable insurance limits)
deposits of a depository institution selected by the Administrator, the earnings
on which shall be added to and become a part of the Restricted
Property.
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10. Tax
Withholding.
The
Corporation shall reasonably determine the amount of any federal, state,
local
or other income, employment, or other taxes which the Corporation or any
of its
Subsidiaries may reasonably be obligated to withhold with respect to the
grant,
vesting, making of an election under Section 83(b) of the Code or other event
with respect to the Restricted Stock. The Corporation shall, to the extent
the
Corporation reasonably determines is permitted by all Applicable Laws, withhold
and/or reacquire a sufficient number of shares of Restricted Stock that vest
pursuant to this Agreement, valued at their Fair Market Value on the applicable
vesting date, to satisfy the minimum amount of any such withholding obligations
that arise with respect to the vesting of such shares. The Corporation may
take
such action(s) without notice to the Director and shall remit to the Director
in
cash the balance of any proceeds from withholding and/or reacquiring such
shares
in excess of the amount reasonably determined to be necessary to satisfy
such
withholding obligations. The Director shall have no discretion as to the
Corporation’s satisfaction of tax withholding obligations in such manner. If,
however, the Director makes an election under Section 83(b) of the Code with
respect to the Restricted Stock, if any other withholding event occurs with
respect to the Restricted Stock other than the vesting of such shares, or
if the
Corporation is otherwise reasonably not able to satisfy the withholding
obligations with respect to the vesting of the Restricted Stock as provided
above in this Section 10, the Corporation (or any Subsidiary of the Corporation
that employs the Director, as applicable) shall be entitled to require a
cash
payment by or on behalf of the Director and/or to deduct from other compensation
payable to the Director the amount of any such withholding
obligations.
11. Notices.
Any
notice to be given under the terms of this Agreement shall be in writing
and
addressed to the Corporation at its principal office to the attention of
the
Secretary, and to the Director at the Director’s last address reflected on the
Corporation’s payroll records. Any notice shall be delivered in person or shall
be enclosed in a properly sealed envelope, addressed as aforesaid, registered
or
certified, and deposited (postage and registry or certification fee prepaid)
in
a post office or branch post office regularly maintained by the United States
Government. Any such notice shall be given only when received, but if the
Director is no longer a Service Provider, shall be deemed to have been duly
given five business days after the date mailed in accordance with the foregoing
provisions of this Section 11.
12. Plan.
The
Award and all rights of the Director under this Agreement are subject to
the
terms and conditions of the provisions of the Plan, incorporated herein by
reference. The Director agrees to be bound by the terms of the Plan and this
Agreement. The Director acknowledges having read and understanding the Plan,
the
Prospectus for the Plan, and this Agreement. Unless otherwise expressly provided
in other sections of this Agreement, provisions of the Plan that confer
discretionary authority on the Board or the Administrator do not (and shall
not
be deemed to) create any rights in the Director unless such rights are expressly
set forth herein or are otherwise in the sole discretion of the Board or
the
Administrator so conferred by appropriate action of the Board or the
Administrator under the Plan after
the date
hereof.
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13. Entire
Agreement.
This
Agreement and the Plan together constitute the entire agreement and supersede
all prior understandings and agreements, written or oral, of the parties
hereto
with respect to the subject matter hereof. The Plan may be amended pursuant
to
Section 15 of the Plan. This Agreement may be amended by the Board
from
time to time. Any such amendment must be in writing and signed by the
Corporation. Any such amendment that materially and adversely affects the
Director’s rights under this Agreement requires the consent of the Director in
order to be effective with respect to the Award. The Corporation may, however,
unilaterally waive any provision hereof in writing to the extent such waiver
does not adversely affect the interests of the Director hereunder, but no
such
waiver shall operate as or be construed to be a subsequent waiver of the
same
provision or a waiver of any other provision hereof.
14. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts, each
of
which shall be deemed an original but all of which together shall constitute
one
and the same instrument.
15. Section
Headings.
The
section headings of this Agreement are for convenience of reference only
and
shall not be deemed to alter or affect any provision hereof.
16. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Delaware without regard to conflict of law principles
thereunder.
IN
WITNESS WHEREOF,
the
Corporation has caused this Agreement to be executed on its behalf by a duly
authorized officer and the Director has hereunto set his or her hand as of
the
date and year first above written.
NAPSTER,
INC.,
a
Delaware corporation
By:
Print
Name:
Its:
DIRECTOR
Signature
Print
Name
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CONSENT
OF SPOUSE
In
consideration of the execution of the foregoing Director Restricted Stock
Award
Agreement by Napster, Inc., I, _____________________________, the spouse
of the
Director therein named, do hereby join with my spouse in executing the foregoing
Director Restricted Stock Award Agreement and do hereby agree to be bound
by all
of the terms and provisions thereof and of the Plan.
Dated: _____________,
2005
Signature
of Spouse
Print
Name
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EXHIBIT
A
STOCK
POWER
FOR
VALUE
RECEIVED and pursuant to that certain Director Restricted Stock Award Agreement
between Napster, Inc., a Delaware corporation (the “Corporation”), and the
individual named below (the “Individual”) dated as of _____________, 2005, the
Individual, hereby sells, assigns and transfers to the Corporation, an aggregate
________ shares of Common Stock of the Corporation, standing in the Individual’s
name on the books of the Corporation and represented by stock certificate
number(s) _____________________________________________ to which this instrument
is attached, and hereby irrevocably constitutes and appoints _________________
____________________________________ as his or her attorney in fact and agent
to
transfer such shares on the books of the Corporation, with full power of
substitution in the premises.
Dated
_____________, ________
Signature
Print
Name
(Instruction:
Please do not fill in any blanks other than the signature line. The purpose
of
the assignment is to enable the Corporation to exercise its sale/purchase
option
set forth in the Director Restricted Stock Award Agreement without requiring
additional signatures on the part of the Individual.)
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