Exhibit 10.2

 

LOTON, CORP.

 

NOTICE OF GRANT

AND

RESTRICTED STOCK AGREEMENT

 

Subject to the terms and conditions of this Notice of Grant and Restricted Stock
Agreement including the attachments hereto (collectively, “Notice and
Agreement”) and pursuant to the Employment Agreement dated as of May 3, 2017, by
and between Loton, Corp. (the “Company”) and Douglas Schaer (“Schaer”), the
Company hereby grants to THE SCHAER FAMILY TRUST DTD 2/4/08 (“Grantee”) the
number of shares of Restricted Common Stock of Loton, Corp., as set forth below
(“Common Shares”):

 

Grantee: The Schaer Family Trust DTD 2/4/08     Address:

2119 Pelham Avenue

Los Angeles, CA 90025

   

Social Security Number:

 

Number of Restricted Common Shares Granted:

400,000 Shares     Grant Date: Dated and effective May 3, 2017     Period of
Restriction (see Section 2 of the attached Restricted Stock Agreement) At the
end of the latter of the One (1) year anniversary of the date on which Company’s
underwritten public offering of its common stock closes or September 30, 2018,
the restrictions on transfer imposed by the Restricted Stock Agreement on
200,000 Shares shall lapse and on the Second Anniversary of the date hereof the
restrictions on transfer imposed by the Restricted Stock Agreement on remaining
200,000 Shares shall lapse.   

 

By signing below, Grantee accepts this grant of Common Shares and hereby
represents that it: (i) agrees to the terms and conditions of this Notice and
Agreement; (ii) has reviewed the Notice and Agreement in their entirety, and has
had an opportunity to obtain the advice of legal counsel and/or tax advice with
respect thereto; (iii) fully understands and accepts all provisions hereof; (iv)
agrees to accept as binding, conclusive, and final all of the Company’s
decisions regarding, and all interpretations of, the Notice and Agreement; (v)
agrees to notify the Company upon any change in Grantee’s’s address indicated
above; and Schaer hereby acknowledges and consents to the terms and conditions
of this Notice and Agreement.

 

  AGREED AND ACCEPTED:       /s/ Douglas Schaer   Douglas Schaer         THE
SCHAER FAMILY TRUST DTD 2/4/08         By: /s/ Douglas Schaer     Douglas Schaer
        By: /s/ Karen Schaer     Karen Schaer

 

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LOTON, CORP.

RESTRICTED STOCK AGREEMENT

 

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is dated as of May 3, 2017
(the “Effective Date”), by and between Loton, Corp., a Nevada corporation (the
“Company”), and Douglas Schaer (“Schaer”) and The Schaer Family Trust
(“Grantee”).

 

RECITALS

 

WHEREAS, Schaer is an employee of the Company and is entitled to a grant of
“Shares” (defined below) under the terms of the Employment Agreement between the
Company and Scherer, dated as of the Effective Date (the “Employment
Agreement”);

 

WHEREAS, Schaer has assigned his right to receive the Shares to Grantee and
Company desires to issue the Shares to the Grantee in accordance with and
subject to all the terms and conditions of this Agreement and the Employment
Agreement; and

 

WHEREAS, the parties hereto desire to memorialize grant of shares of the
Company’s Common Stock for the reasons set forth above.

 

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:

 

1.            Grant of Shares.

 

(a)          Upon the full execution of this Agreement, the Company shall issue
to the Grantee 400,000 restricted shares of the Company’s Common Stock (the
“Shares”), which shares shall vest in accordance with Section 1(b) below and
shall be subject to all the terms and conditions of the Employment Agreement,
including the forfeiture provisions contained therein.

 

(b)           The Shares shall vest in increments, in accordance with the
following schedule: (i) the first tranche of Two Hundred Thousand (200,000)
Shares shall vest twelve (12) months from the Effective Date; and (ii) the
second tranche of 200,000 Shares shall vest in twelve (12) equal monthly
installments (at the end of each month) starting with the thirteenth (13th)
month from the Effective Date and ending with the twenty-fourth (24th) month
from the Effective Date.

 

2.            Restrictions Against Transfer.

 

(a)          Restrictions Imposed by this Agreement. The Grantee agrees that it
will not transfer, assign, hypothecate, or in any way dispose of any of the
Shares, or any right or interest therein, whether voluntarily or by operation of
law, or by gift or otherwise, until the following dates:

 

(i) At the end of the latter of the One (1) year anniversary of the date on
which Company’s underwritten public offering of its common stock closes or
September 30, 2018, the restrictions on transfer imposed by this Restricted
Stock Agreement on 200,000 Shares shall lapse; and

 

(ii) On the second anniversary of the date hereof, the restrictions on transfer
imposed by this Restricted Stock Agreement on remaining 200,000 Shares shall
lapse.

 

Any purported transfer in violation of any provision of this Agreement shall be
void and ineffectual, and shall not operate to transfer any interest or title to
the purported transferee.

 

(b)          Federal Law Restrictions on Transfer. The Grantee hereby
acknowledges that in addition to the restrictions imposed by subsection 2(a),
above, the following restrictions also apply with respect to the Shares:

 

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(i)          The Shares held by the Grantee must be held indefinitely unless
registered under the Securities Act of 1933, as amended (the “Act”), or unless,
in the opinion of counsel of the Company, an exemption from such registration is
available;

 

(ii)         Only the Company may file a registration statement with the
Securities and Exchange Commission (the “SEC”) and the Company is under no
obligation to do so with respect to the Shares;

 

(iii)        Exemption from registration may not be available or may not permit
the Grantee to transfer Shares in the amounts or at the times proposed by the
Grantee;

 

(iv)        The Acquiror has been advised that Rule 144 promulgated by the SEC
under the Act (“Rule 144”), which provides for certain limited, routine sales of
unregistered securities through brokers, is not presently available with respect
to the Shares and may never be available, and in any event, requires that the
Shares be held and fully paid for within the meaning of Rule 144 for a minimum
of one (1) year, and possibly longer, before they may be resold under Rule 144;

 

(v)         The Company is under no obligation to file any disclosure statement
with the SEC or to furnish the Grantee with information to sell any of the
Shares under Rule 144; and

 

(vi)        In reliance upon the representations of the Grantee set forth in
Section 3 below, the Company has not registered the Shares with the SEC under
the Act.

 

(b)          Representation by Transferee. The Grantee agrees that it will not
transfer, assign, hypothecate, or in any way dispose of any of the Shares to a
transferee until such transferee executes a written consent to be bound by the
terms and conditions of this Agreement in form and substance satisfactory to the
Company.

 

3.            Representations of the Acquiror. The Grantee represents and
warrants to the Company that:

 

(a)          It is acquiring the Shares for its own account for investment only
and not with a view to, or for sale in connection with, a distribution of the
Shares within the meaning of the Act;

 

(b)          It has no present intention of selling or otherwise disposing of
all or any portion of the Shares, and no other person has any beneficial
ownership in the Shares;

 

(c)          It has had access to all information regarding the Company and its
present and prospective business, assets, liabilities and financial condition;

 

(d)          It has had ample opportunity to ask questions of and receive
answers from the Company’s representatives concerning this investment and to
obtain any and all documents requested in order to supplement or verify any of
the information supplied; and

 

(e)          It recognizes (i) the lack of liquidity of the Shares and
restrictions upon transferability thereof (e.g., that the undersigned may not be
able to sell or dispose of them or use them as collateral for loans), and (ii)
the qualifications and backgrounds of the principals of the Company, among other
matters.

 

4.             Inducement. In order to induce the Company to consent to the
grant of the Shares to Grantee in accordance with this Agreement, Schaer hereby
guarantees the full and complete performance of the terms and conditions of this
Agreement by the Grantee, and acknowledges and agrees that the Shares granted
hereunder to Grantee shall be subject to all the terms and conditions of this
Agreement and the Employment Agreement, including the forfeiture provisions
contained therein. Schaer acknowledges and agrees that the grant of the Shares
to Grantee hereunder satisfies the Company’s obligation to grant the Shares to
Schaer under the Employment Agreement.

 

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5.            Notices. All notices required or desired to be given pursuant to
this Agreement shall be in writing and shall be personally served (including by
commercial delivery or courier service) or given by mail or facsimile. Any
notice given by mail shall be deemed to have been given and received when
seventy-two (72) hours have elapsed from the time such notice was deposited in
the United States mails, certified or registered and first-class postage
prepaid, addressed, if intended to a party to this Agreement, at the address set
forth below its signature or to such other address as such party may have
designated by like written notice to each of the other parties from time to
time.

 

6.            Refusal to Transfer. The Company shall not be required:

 

(a)          To transfer on its books any Shares that have been sold, given
away, or otherwise transferred in violation of any provision set forth in this
Agreement; or

 

(b)          To treat as owner of such Shares or to accord the right to receive
dividends to any purchaser, donee, or other transferee to whom such Shares shall
have been so transferred.

 

7.            Restriction on Certificates.

 

(a)          Legends. The Company and the Grantee agree that all certificates
representing all Shares of the Company which at any time are subject to the
provisions of this Agreement shall have endorsed upon them legends substantially
similar to the following:

 

THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS
OF THE VARIOUS STATES, AND HAVE BEEN ISSUED AND SOLD PURSUANT TO AN EXEMPTION
FROM THE ACT, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED BY THE
HOLDER THEREOF AT ANY TIME, EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, FILED UNDER THE ACT COVERING THE SHARES, OR (2) UPON DELIVERY TO THE
COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT THE SHARES MAY
BE TRANSFERRED WITHOUT REGISTRATION.

 

THESE SHARES HAVE NOT BEEN QUALIFIED UNDER ANY STATE SECURITIES LAWS AND MAY
ALSO BE RESTRICTED UNDER THE PROVISIONS OF SUCH LAWS. THESE SHARES MUST BE HELD
INDEFINITELY UNLESS THEY ARE SUBSEQUENTLY QUALIFIED OR ARE OTHERWISE EXEMPT FROM
QUALIFICATION UNDER SUCH LAWS.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF THAT CERTAIN RESTRICTED STOCK AGREEMENT, BETWEEN THE COMPANY
AND THE HOLDER HEREOF, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.

 

(b)           Stop Transfer Instructions. The Grantee 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,
with respect to such certificates or instruments and, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
own records.

 

8.            Code Section 83(b) Election. Grantee acknowledges that he has been
informed and is aware of the following income tax consequences resulting from
the receipt and vesting of the Shares:

 

(a)          Grantee will be taxed on the fair market value of the Shares as and
when the restrictions lapse in accordance with the provisions of this Agreement
and any related agreement (such fair market value determined on such vesting
dates), unless Grantee files an election pursuant to Section 83(b) of the Code
(and any similar state tax provisions if applicable). If such an election is
made, Grantee will be taxed currently on the full fair market value of the
Shares on the Effective Date. Any such election must be filed by Grantee with
the Internal Revenue Service and, if necessary, the proper state taxing
authorities, within 30 days of the receipt of the Shares. A form of Election
under Section 83(b) is attached hereto. GRANTEE ACKNOWLEDGES THAT IT IS HIS OR
HER SOLE RESPONSIBILITY AND NOT THE COMPANY’S (i) TO DETERMINE WHETHER OR NOT TO
MAKE ANY ELECTION UNDER SECTION 83(b) OF THE CODE, AND (ii) IF GRANTEE
DETERMINES TO MAKE ANY SUCH ELECTION, TO TIMELY FILE SUCH ELECTION UNDER SECTION
83(b) OF THE CODE, EVEN IF GRANTEE ASKS THE COMPANY OR ITS REPRESENTATIVE TO
MAKE THIS FILING ON HIS OR HER BEHALF. Grantee must obtain its own counsel to
determine whether Grantee is eligible to make an 83(b) election and Grantee’s
compliance with all tax reporting obligations relating to the Agreement, and the
Company makes no representations with regard to any reporting obligations of the
Grantee including the filing of an 83(b) election or the form attached hereto.

 

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(b)          Grantee shall notify the Company immediately in writing in the
event Grantee makes an election under Section 83(b) of the Code (or any
successor provision) or corresponding provisions of state or local tax laws with
respect to the Shares.

 

9.            General Provisions.

 

(a)          Severability. In the event that any of the provisions of this
Agreement are held to be unenforceable or invalid by any court of competent
jurisdiction, the validity and enforceability of the remaining provisions shall
not be affected thereby.

 

(b)          Construction. All pronouns used in this Agreement shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as
identification of the person or persons, firm or firms, corporation or
corporations may require.

 

(c)          Governing Law. This Agreement shall be governed by the laws of the
State of Nevada, without regard to its conflicts of laws rules or provisions.

 

(d)          Amendment. No amendment or variation of the terms of this
Agreement, with or without consideration, shall be valid unless made in writing
and signed by all of the parties to this Agreement at the time of such
amendment.

 

(e)          Inurement. Subject to the restrictions against transfer or
assignment contained herein, the provisions of this Agreement shall inure to the
benefit of and shall be binding upon the assigns, successors in interest,
personal representatives, estates, heirs, and legatees of each of the parties.
The Grantee agrees that it will not hypothecate or otherwise create or suffer to
exist any lien, claim, or encumbrance upon any of its Shares at any time subject
hereto, other than an encumbrance created or permitted by this Agreement.

 

(f)          Entire Agreement. This Agreement, the Notice of Grant, and the
Employment Agreement contain the entire understanding between the parties
concerning the subject matter contained herein. There are no representations,
agreements, arrangements, or understandings, oral or written, between or among
the parties, relating to the subject matter of this Agreement, the Notice of
Grant, and the Employment Agreement which are not fully expressed herein or
therein.

 

(g)          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 Agreement.

 

(h)          Counterparts; Originals. This Agreement may be executed in one or
more counterparts and by PDF or facsimile, each of which shall be deemed an
original and all of which together shall constitute one instrument.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first above written.

 

  LOTON, CORP         By: /s/ Robert Ellin   Name: Robert Ellin   Title:
Executive Chairman and President         /s/ Douglas Schaer   Douglas Schaer    
    THE SCHAER FAMILY TRUST DTD 2/4/08         By: /s/ Douglas Schaer    
Douglas Schaer         By: /s/ Karen Schaer     Karen Schaer

 

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SECTION 83(b) TAX ELECTION

 

This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.

 

(1)         Name: ______________________________________________________________

 

Address: ___________________________________________________________

 

___________________________________________________________

 

Social Security No.: __________________

 

(2)         The property with respect to which the election is being made is
______________ shares of the common stock of Loton, Corp., a Nevada corporation
(“Shares”).

 

(3)         The date on which the Shares were acquired is __________________,
2017.

 

(4)         The taxable year in which the election is being made is the calendar
year 2017.

 

(5)         The property is subject to surrender and cancellation if for any
reason the taxpayer ceases to be an employee the issuer prior to specified
vesting dates. This restriction lapses in accordance with the terms of an
agreement between the company and taxpayer.

 

(6)         The fair market value at the time of transfer (determined without
regard to any restriction other than a restriction which by its terms will never
lapse) is $________ per share.

 

(7)         The amount paid for such property is $  0     per share.

 

(8)         A copy of this statement was furnished to Loton, Corp., for whom
taxpayer rendered the services underlying the transfer of property.

 

(9)         This statement is executed as of _________________, 2017.

 

Signature:     Taxpayer           Taxpayer’s Spouse, if any

 

NOTE: To make the election, this form must be filed with the Internal Revenue
Service Center with which taxpayer files his/her Federal income tax returns. The
filing must be made within thirty (30) days after the Effective Date of the
Restricted Stock Agreement.

 

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