Exhibit 10.1

 

NOTICE OF SAR GRANT

under the

CINEDIGM CORP. 2017 EQUITY INCENTIVE PLAN

 

 

No. of shares subject to SAR: _________

 

This GRANT, made as of the ____ day of ____________, 20__ by Cinedigm Corp., a
Delaware corporation (the “Company”), to ______________, is made pursuant and
subject to the provisions of the Company’s 2017 Equity Incentive Plan (the
“Plan”), a copy of which has been given to Participant. All terms used herein
that are defined in the Plan have the same meanings given them in the Plan.

 

1.        Grant of SARs. Pursuant to the Plan, the Company, on ___________, ____
(“Grant Date”), granted to Participant, an aggregate of _________ stock
appreciation rights (“SAR” or “SARs”) subject to the terms and conditions of the
Plan and subject further to the terms and conditions herein set forth. Each SAR
entitles the Participant to receive, upon exercise, an amount (referred to
herein as the “Stock Appreciation Amount”) equal to the excess of (a) the Market
Price per share of the Common Stock on the exercise date, over (b) $XX.XX, being
not less than the Market Price per share of the Common Stock on the Grant Date
(the amount in (b) referred to herein as the “Exercise Price”). Such SARs will
be exercisable as hereinafter provided.

 

2.        Expiration Date. The Expiration Date of the SARs is the date that is
ten (10) years from the Grant Date. The SARs may not be exercised on or after
the Expiration Date.

 

3.        Vesting of SARs. Except as provided in paragraphs 7, 8, 9, or 10, the
SARs shall become vested in three annual installments pursuant to the following
table:

 

Date of Vesting Number of SARs that will Vest __________, 20__
______________________ __________, 20__ ______________________ __________, 20__
______________________    

 

 

4.        Exercisability of SARs. Except as provided in paragraphs 7, 8, 9, or
10, the SARs shall become exercisable at the time they become vested pursuant to
paragraph 3. Once the SARs have become exercisable in accordance with the
preceding sentence, they shall continue to be exercisable until the termination
of Participant’s rights hereunder pursuant to paragraphs 7, 8, 9, or 10, or
until the Expiration Date, if earlier. A partial exercise of this SAR shall not
affect Participant’s right to exercise the SARs with respect to the remaining
shares, subject to the terms and conditions of the Plan and those set forth
herein.

 

5.       Method of Exercising SARs and Form of Payment of Stock Appreciation
Amount. The SARs shall be exercised pursuant to procedures established by the
Committee for exercising the SARs. Upon exercise of the SARs, the Stock
Appreciation Amount, less any amounts withheld pursuant to paragraph 18, shall
be paid, as determined solely at the discretion of the Company, in (a) whole
shares of Common Stock, (b) cash, or (c) a combination of both cash and Common
Stock. Notwithstanding the preceding sentence, to the extent the number of
Shares issuable upon exercise of any of the SARs awarded hereunder, would exceed
the limitations set forth in the Plan, then only the permitted number of Shares
may be issued and any remaining amounts payable shall be paid in cash.

 

  

 

  

6.       Nontransferability. This SARs are nontransferable except by will or the
laws of descent and distribution. During Participant’s lifetime, the SARs may be
exercised only by Participant.

 

7.       Upon a Qualifying Termination Event.

 

(a)       Notwithstanding anything in this SAR to the contrary, if, prior to the
forfeiture of the SARs under paragraph 9, Participant experiences a Qualifying
Termination Event (as defined below), the SARs shall become vested and
exercisable as to a pro-rata number of the unvested SARs, as determined in
accordance with the following sentence. The pro-rata number of the unvested SARs
that shall vest and become exercisable pursuant to the preceding sentence shall
be equal to a fraction of the remaining unvested SARs; the numerator of such
fraction shall be “x” where x equals the number of full months of service
performed by the Participant on and after (and including the month of) the Grant
Date, and prior to the Qualifying Termination Event, and the denominator of the
fraction shall be 28. The non-vested portion of the SARs shall be forfeited.

 

(b)       The portion of the SARs vested pursuant to paragraph 3 or subparagraph
(a) of this paragraph 7 may be exercised beginning on the date the SAR becomes
vested and shall remain exercisable according to the terms provided in paragraph
4, and the Participant or Participant’s beneficiary (or estate as the case may
be) may exercise this SAR during the remainder of the period preceding the
Expiration Date. Participant shall have the right to designate his beneficiary
in accordance with procedures established under the Plan for such purpose. If
Participant fails to designate a beneficiary, or if at the time of his death
there is no surviving beneficiary, the SARs may be exercised by his estate.

 

8.       Exercise of Vested SARs After Other Termination of Employment. Except
as provided in paragraph 7, in the event Participant ceases to be employed by
the Company or an Affiliate, the rules under this paragraph 8 shall apply. If
Participant ceases to be employed after the SARs are vested, but prior to the
Expiration Date, Participant may exercise the SARs with respect to the shares he
is entitled to purchase pursuant to paragraphs 3 and 4 above within sixty (60)
days of the date of such termination of employment (but in no event later than
the Expiration Date). Any portion of the vested SARs that is not exercised
within the foregoing sixty (60) day period shall be immediately forfeited.

 

9.       Forfeiture. Any non-vested portion of the SARs that does not become
vested pursuant to paragraph 3, 7(a) or 10, shall be forfeited if Participant’s
employment with the Company or an Affiliate terminates for any reason.

 

10.       Change in Control. In the event of a Change in Control (as defined in
the Plan) prior to the forfeiture of the SARs under paragraph 9, the provisions
of this paragraph 10 shall apply in addition to the provisions of Article 17
(and related provisions) of the Plan.

 

(a) Any Replacement Award made to the Participant shall provide that if the
Participant is terminated by the Company other than for Cause or voluntarily
resigns for Good Reason (as defined in paragraph 11) concurrent with or within
two (2) years after the date of the Change in Control, the non-vested
Replacement Award shall become immediately vested and shall be exercisable as
provided in paragraph 7(b), at the time of the termination or resignation. The
Committee shall have the discretion to determine the terms of any Replacement
Award in compliance with the Plan and applicable law. For purposes of paragraphs
9 and 11, references to the Company or an Affiliate shall also include any
successor entity.

 

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(b) Notwithstanding the provisions of subparagraph (a) hereof, in connection
with a Change in Control where the Company’s shares continue to be traded on the
Nasdaq Global Market or another established securities market and this SAR
remains in effect, if the Participant is terminated by the Company other than
for Cause or voluntarily resigns for Good Reason (as defined in paragraph 11)
concurrent with or within two (2) years after the date of the Change in Control,
the non-vested SARs shall become immediately vested and shall be exercisable as
provided in paragraph 7(b), as of the time of the termination or resignation.

 

11.       Qualifying Termination Event and Other Terms.

 

(a) For purposes of this SAR, Qualifying Termination Event shall mean a
Participant’s death, Disability, termination by the Company or an Affiliate
other than for Cause, or voluntary termination for Good Reason.

 

(b) “Disability” shall mean a Participant’s permanent and total disability
within the meaning of Section 22(e)(3) of the Code.

 

(c) If the events described in subparagraph (a) or paragraph 10 occur after the
date that the Participant is advised (upon recommendation by the Committee) that
his employment is being, or will be, terminated for Cause, on account of
performance or in circumstances that prevent him from being in good standing
with the Company, accelerated vesting shall not occur and all rights under this
SAR shall terminate, and this SAR shall expire on the date of Participant’s
termination of employment. The Committee shall have the authority to determine
whether Participant’s termination from employment is for Cause or for any reason
other than Cause.

 

(d) “Good Reason” means (1), (2) or (3), as determined by the Committee in its
sole discretion without Participant’s written consent: (1) a material and
substantially adverse reduction in Participant’s title or job responsibilities
compared with Participant’s title or job responsibilities on the Date of Grant,
(2) the Company’s requiring the office nearest to Participant’s principal
residence to be located at a place that is more than fifty (50) miles from where
such office is currently located, or (3) any material breach of an employment
agreement by the Company. Notwithstanding the foregoing, Good Reason will be
deemed to exist only in the event that: (x) Participant gives written notice to
the Company of his or her claim of Good Reason and the specific grounds for the
claim within ninety (90) days following the occurrence of the event upon which
the claim rests, (y) the Company fails to cure such breach within thirty days
(30) of receiving such notice (“Cure Period”), and (z) Participant gives written
notice to the Company to terminate his or her employment within fifteen (15)
days following the Cure Period.

 

12.       Fractional Shares. Fractional shares shall not be issuable hereunder,
and when any provision hereof may entitle Participant to a fractional share such
fraction shall be disregarded.

 

13.       No Right to Continued Employment. This SAR does not confer upon
Participant any right with respect to continuance of employment by the Company
or an Affiliate, nor shall it interfere in any way with the right of the Company
or an Affiliate to terminate his employment at any time.

 

14.       Change in Capital Structure. The terms of this SAR shall be adjusted
as the Committee determines is equitable in the event the Company effects one or
more stock dividends, stock split-ups, subdivisions or consolidations of shares
or other similar changes in capitalization.

 

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15.        Governing Law. This SAR shall be governed by the laws of the State of
Delaware and applicable Federal law. All disputes arising under this SAR shall
be adjudicated solely within the state or Federal courts located within the
State of Delaware.

 

16.       Conflicts.

 

(a)       In the event of any conflict between the provisions of the Plan as in
effect on the date hereof and the provisions of this SAR, the provisions of the
Plan shall govern. All references herein to the Plan shall mean the Plan as in
effect on the date hereof.

 

(b)       In the event of any conflict between the provisions of this SAR and
the provisions of any separate Agreement between the Company and the
Participant, including, but not limited to, any Severance Compensation
Agreement, the provisions of that separate Agreement shall govern.

 

17.        Binding Effect. Subject to the limitations set forth herein and in
the Plan, this SAR shall be binding upon and inure to the benefit of the
legatees, distributees, and personal representatives of Participant and the
successors of the Company. 

 

18.        Taxes. Tax withholding requirements attributable to the exercise of
this SAR, including employment taxes, Federal income taxes, and state and local
income taxes with respect to the state and locality where, according to the
Company's system of records, the Participant resides at the time the SAR is
exercised, except as otherwise might be determined to be required by the
Company, will be satisfied by the Participant as instructed in the established
procedures for exercising this SAR; provided, however, that the foregoing
employment, Federal, state and local income tax withholding provision shall be
subject to any special rules or provisions that may apply to Participants who
are non-US employees (working inside or outside of the United States) or US
employees working outside of the United States. It is the Participant's
responsibility to properly report all income and remit all Federal, state, and
local taxes that may be due to the relevant taxing authorities as the result of
exercising this SAR.

 

19.       Recoupment. In addition to any other applicable provision of the Plan,
this SAR is subject to the terms of any separate Clawback Policy maintained by
the Company, as such Policy may be amended from time to time.

 

20.       Acceptance. Participant hereby acknowledges receipt of a copy of the
Plan and this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the SAR subject to all of the terms and
conditions of the Plan and this Agreement. The Participant acknowledges that
there may be adverse tax consequences upon exercise of the SARs or disposition
of the underlying shares and that the Participant should consult a tax advisor
prior to such exercise or disposition.

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IN WITNESS WHEREOF, the Company and Participant have each caused this Notice of
SAR Grant to be signed on their behalf.

 

  Cinedigm Corp.         By:                   Participant

 

 

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