RESTRICTED STOCK
AGREEMENT
MAKEMUSIC, INC.
2003 EQUITY INCENTIVE PLAN
THIS AGREEMENT is
made effective as of this _______day of _______, ___, by and
between MakeMusic, Inc., a Minnesota corporation (the
“Company”), and ______(the
“Participant”).
WHEREAS, the
Participant on the date hereof is a key employee, officer, director
of or consultant or advisor to, the Company or one of its
Subsidiaries;
WHEREAS, the
Company wishes to grant a restricted stock award to the Participant
for shares of the Company’s Common Stock pursuant to the
Company’s 2003 Equity Incentive Plan (the
“Plan”); and
WHEREAS, the
Administrator of the Plan has authorized the grant of a restricted
stock award to the Participant.
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein
contained, the parties hereto agree as follows:
1.
Grant of Restricted Stock Award . The Company hereby
grants to the Participant a restricted stock award (the
“Award”) for _____(_____) shares of Common Stock on the
terms and conditions set forth herein, which shares are subject to
adjustment pursuant to Section 14 of the Plan.
2.
Vesting of Restricted Stock .
a.
General . Except as provided in Paragraph 3
below, the shares of Common Stock subject to this Award shall
remain forfeitable until the risks of forfeiture lapse according to
the following vesting schedule:
Vesting Date
Cumulative Percentage of Shares Vested
b.
Termination of Relationship . Except as provided in
Paragraph 3 below, if, prior to a Vesting Date of all or any
portion of the Award, the Participant ceases to be [a key
employee or officer] [a consultant or advisor] [a director] of
the Company or any Affiliate for any reason, the Participant may be
required to forfeit all shares of Common Stock subject to this
Award which have not vested and for which the risks of forfeiture
have not lapsed and this Award may, in the Administrator’s
discretion, terminate as of the date of the act giving rise to such
termination.
c.
Issuance of Shares; Rights as a Shareholder . The
Company shall cause to be issued one or more stock certificates
representing such shares of Common Stock in the Participant’s
name, and shall hold each such certificate until such time as the
risk of forfeiture and other transfer restrictions set forth in
this Agreement have lapsed with respect to the shares represented
by the certificate. The Company may also place a legend on such
certificates describing the risks of forfeiture and other transfer
restrictions set forth in this Agreement providing for the
cancellation of such certificates if the shares of Common Stock are
forfeited as provided Paragraph 2(b). Until such risks of
forfeiture have lapsed or the shares subject to this
Award have been
forfeited pursuant to Paragraph 2(b), the Participant shall be
entitled to vote the shares represented by such stock certificates
and shall receive dividends attributable to such shares of Common
Stock, but the Participant shall not have any other rights as a
shareholder with respect to such shares.
a.
Acceleration . Notwithstanding anything in the Plan
or this Agreement to the contrary, in the event of the termination
of the Participant’s relationship with the Company in
connection with a Change of Control (as defined below), the risks
of forfeiture on this Award shall immediately and fully
lapse.
b.
Change of Control Defined . For purposes of this
Paragraph 3, a “Change of Control”
means:
i.
The consummation of any merger, consolidation, exchange, or
reorganization to which the Company is a party if the individuals
and entities who were shareholders of the Company immediately prior
to the effective date of such transaction have, immediately
following the effective date of such transaction, beneficial
ownership (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of less than fifty percent (50%) of the total
combined voting power of all classes of securities issued by the
surviving corporation for the election of directors of the
surviving corporation;
ii.
The shareholders of the Company approve any plan or proposal for
the liquidation of the Company;
iii.
A sale, lease or other transfer of all or substantially all of the
assets of the Company to any person or entity which is not an
Affiliate of the Company; or
iv.
The acquisition, without prior approval by resolution adopted by
the Board, of direct or indirect beneficial ownership (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company representing, in the aggregate, fifty
percent (50%) or more of the total combined voting power of all
classes of the Company’s then-issued and outstanding
securities by any person or entity or by a group of associated
persons or entities acting in concert; provided, however, that a
Change of Control will not be deemed to occur if such acquisition
is initiated by the Participant or an entity in which the
Participant owns fifty percent (50%) or more of the total combined
voting power of all classes of such entity’s securities, or
if the Participant or such entity is a member of the group of
associated persons or entities acting in concert.
c.
Limitation on Change of Control Payments . The
Participant shall not be entitled to receive any Change of Control
Payment, as defined below, which would constitute a
“parachute payment” for purposes of Code
Section 280G, or any successor provision, and the regulations
thereunder. In the event any Change of Control Payment payable to
the Participant would constitute a “parachute payment,”
the Participant shall have the right to designate those Change of
Control Payments which would be reduced or eliminated so that the
Participant will not receive a “parachute payment.” For
purposes of this Paragraph 3(c), a “Change of Control
Payment” shall mean any payment, benefit or transfer of
property in the nature of compensation paid to or for the benefit
of the Participant under any arrangement which is considered
contingent on a Change of Control for purposes of Code
Section 280G, including, without limitation, any and all of
the Company’s salary, bonus, incentive, restricted stock,
stock option, equity-based
2
compensation or
benefit plans, programs or other arrangements, and shall include
the acceleration of this Award.
a.
Employment . This Agreement shall not confer on the
Participant any right with respect to continuance of employment by
the Company or any of its subsidiaries, nor will it interfere in
any way with
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