Exhibit 10.35


 





















 


EXECUTION
VERSION


 


Exhibit A


 


RESTRICTED STOCK AWARD AGREEMENT


 


THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”), is entered into as of this
          of              ,
2004, by and between WMG Parent Corp., a Delaware corporation (“Parent”), and
Lyor Cohen (the “Executive”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the “Employment
Agreement” (as defined herein).


 


R E  C  I  T  A  L
S:


 


WHEREAS, WMG Acquisition Corp., a Delaware corporation (the “Company”),
an indirect wholly owned subsidiary of Parent and a direct or indirect wholly
owned subsidiary of WMG Holdings Corp., a Delaware corporation, and the
Executive have entered into an employment agreement, dated as of January 25,
2004 (the “Employment Agreement”), pursuant to which the Executive is to
be granted on the “Closing Date” (as defined in the Purchase Agreement
between the Company and Time Warner Inc., dated as of November 24, 2003; the
Closing Date is hereinafter referred to as the “Effective Date”) the
restricted stock award provided for herein (the “Restricted Stock Award”);
and


 


WHEREAS, the Board of Directors of Parent (the “Board”) has determined,
pursuant to the Employment Agreement, to grant the Restricted Stock Award to
the Executive effective as of the Effective Date, such grant to be subject to
the terms and conditions set forth herein.


 


NOW THEREFORE, in
consideration of the mutual covenants hereinafter set forth, the parties hereto
agree as follows:


 


1.           Grant of Restricted Stock Award.
Subject to the terms and conditions set forth in this Agreement, Parent hereby
grants, effective as of the Effective Date, to the Executive a Restricted Stock
Award consisting of            shares
of Class A Common Stock of Parent (the “Restricted Shares”). The Board
will advise the Executive in writing on or immediately following the Effective
Date of the fair market value of one share of Class A Common Stock on the
Effective Date (the “Initial Value”), determined without regard to any
restrictions applicable thereto other than restrictions which by their terms do
not lapse. The Restricted Shares shall vest in accordance with Section 2 and
Section 5 hereof.


 





















 


2.             Vesting.


 


(a)           Service-Based
Restricted Stock. Except as otherwise provided in this Agreement, one-third
of the Restricted Shares (the “Service-Based Restricted Stock”), shall
vest and become non-forfeitable in four equal installments on the day prior to
each of the first, second, third and fourth anniversaries of the Effective Date
provided that the Executive remains employed with the Company on each such
date, such that one hundred percent (100%) of the Service-Based Restricted
Stock shall be vested and non-forfeitable on the day prior to the fourth
anniversary of the Effective Date; provided that any unvested Service-Based
Restricted Stock shall become vested and non-forfeitable upon a Change in
Control.


 


(b)           Performance-Based
Restricted Stock. Except as otherwise provided in this Agreement,
two-thirds of the Restricted Shares (the “Performance-Based Restricted Stock”)
shall contingently vest in equal installments on the day prior to each of the
first, second, third and fourth anniversary of the Effective Date provided that
the Executive remains employed with the Company on each such date (the “Service
Condition”), but shall remain subject to forfeiture as described below
until and unless the condition described in Section 2(b)(i) or 2(b)(ii), as
applicable, has been satisfied (each such condition, a “Performance Condition”).


 


(i)           With respect to one-half of the Performance-Based
Restricted Stock, the Performance Condition shall be the occurrence of a 2X
Restricted Stock Liquidity Event.


 


(ii)          With respect to the other one-half of the Performance-Based
Restricted Stock, the Performance Condition shall be the occurrence of a 3X
Restricted Stock Liquidity Event.


 


(iii)         For purposes of this Section 2(b), and also as and if used
elsewhere in this Agreement, the following terms shall have the following
meanings:


 


(1)           “2X Investor Equity Value” shall mean (X) two times
the Investment minus (Y) the aggregate amount of cash and “Fair Market
Value” (as defined below) of readily marketable securities or other assets
(determined at the time of receipt) received by the Investors in respect of the
Investor Equity prior to or coincident with the time of determination.


 


(2)          “3X Investor Equity Value” shall mean (X) three
times the Investment minus (Y) the aggregate amount of cash and Fair
Market Value of readily marketable securities or other assets (determined at
the time of receipt) received by the Investors in respect of the Investor
Equity prior to or coincident with the time of determination.


 


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(3)          “2X Restricted Stock Liquidity Event” shall mean (A)
the first sale in an underwritten offering of Parent’s Class A Common Stock
pursuant to a registration statement on Securities and Exchange Commission (“SEC”)
Form S-1 or otherwise under the Securities Act of 1933, as amended (the “Securities
Act”) (an “IPO”), at a per share price which implies an aggregate value of
the Investor Equity at the time of the IPO of at least the 2X Investor Equity
Value, (B) following an IPO, or any transaction other than an IPO which causes
Parent’s Class A Common Stock, or all or substantially all of the securities
into which such Class A Common Stock is converted or for which it is exchanged,
to be listed for trading on a national securities exchange or quoted on an
automated quotation system, the average closing price of Parent’s Class A
Common Stock, or such securities into which Class A Common Stock is converted
or for which it is exchanged, on the primary exchange on which, or system over
which, it is traded over any 20 consecutive trading days is such that the
implied aggregate value of the Investor Equity at the end of such 20
consecutive trading days, based on such average price, is at least the 2X
Investor Equity Value, determined as of the first of such 20 consecutive
trading days, or (C) a Bonus Liquidity Event (provided that the consideration
paid to the Investors may be in the form of cash, readily marketable securities
or a combination of both) occurs which results in a combination of cash and
readily marketable securities being paid or provided to the Investors having an
aggregate value (as determined by the Board in good faith as of the time of
receipt) of at least the 2X Investor Equity Value.


 


(iv)              “3X Restricted Stock Liquidity Event” has the
same meaning as a 2X Restricted Stock Liquidity Event, except that the term “2X
Investor Equity Value” each time it appears in Section 2(b)(iii)(3) above shall
be replaced with “3X Investor Equity Value.”


 


(v)               “Fair Market Value” shall mean the price at
which the asset in question would change hands in an arms’ length sale between
a willing buyer and a willing seller, with neither being under any compunction
to buy or sell and each with full knowledge of all relevant facts, as
determined by, in the Executive’s sole discretion, an investment bank or other
valuation firm chosen by the Executive from among a list of no less than five
such banks and/or firms (all of which must be experienced in the valuation of
privately held companies) provided to the Executive by the Company; provided
that, in determining Fair Market Value of the securities of any member of the
Parent Group, the chosen investment bank or valuation firm shall be instructed
to use a methodology which takes into account the free cash flow, revenue and
EBITDA and such other methodologies and characteristics as may be relevant.


 


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Notwithstanding anything in this Agreement to the
contrary, the Service Condition applicable to each share of Performance-Based
Restricted Stock shall be deemed to have been attained upon a Change in
Control.


 


(c)           Performance-Based Restricted Stock as
to which both the Service Condition and the Performance Condition has been
actually or deemed satisfied, and shares of Service-Based Restricted Stock as
to which the vesting condition set forth in Section 2(a) hereof has been
actually or deemed satisfied, are hereinafter referred to as “Vested Restricted
Shares.”


 


3.           Taxes. The Executive shall pay to the Company or
Parent promptly upon request, and in any event at the time the Executive
recognizes taxable income in respect of the Restricted Stock Award, an amount
equal to the taxes the Company or Parent determines it is required to withhold
under applicable tax laws with respect to the Restricted Shares. Such payment
shall be made in the form of cash. As a condition to the effectiveness of the
Restricted Stock Award, the Executive shall make a timely and valid election
pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the
“Code”) to realize taxable income in respect of the grant of the
Restricted Stock Award, in an amount equal to the Initial Value.


 


4.           Certificates. Certificates evidencing the
Restricted Shares shall be issued by Parent and shall be registered in the
Executive’s name on the stock transfer books of Parent promptly after the date
hereof, but shall remain in the physical custody of Parent or its designee at
all times prior to, in the case of any particular Restricted Shares, the date
such Restricted Shares become Vested Restricted Shares. As a condition to the
receipt of this Restricted Stock Award, the Executive shall deliver to Parent a
stock power, duly endorsed in blank, relating to the Restricted Shares.


 


5.           Effect
of Termination of Employment.


 


(a)           For
Cause or by the Executive without Good Reason. Upon the Executive’s
termination of employment with the Company (i) by the Company for Cause, or
(ii) by the Executive without Good Reason, then all Restricted Shares which are
not Vested Restricted Shares at the time of such termination shall be forfeited
by the Executive.


 


(b)           Termination
by the Company without Cause, by the  Executive for Good Reason or upon
the Executive’s death or Disability. Upon a termination of the Executive’s
employment with the Company (i) due to his death, (ii) by the Company due to
his Disability or without Cause or (iii) by the Executive for Good Reason, then
all of the vesting conditions shall be deemed satisfied as to all Restricted
Shares, and all Restricted Shares shall become Vested Restricted Shares.


 


(c)           Call
Option.


 


(i)            If
the Executive’s employment with the Company is terminated for any reason (or no
reason), Parent shall have the right and


 


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option
(the “Call Option”), but not the obligation, to purchase, or to cause
any member of the Parent Group designated by Parent (the “Call Assignee”)
to purchase, from the Executive any or all of the Vested Restricted Shares. The
purchase price (the “Call Price”) of the Vested Restricted Shares
subject to purchase under this provision (the “Called Shares”) shall be
as follows:


 


(1)           In the event of a termination of
employment described in Section 5(a) above, the lower of the Fair Market Value
of the Called Shares on the date of the “Call Notice” (as defined below) or the
Initial Value of the Called Shares.


 


(2)           In the event of a termination
described in Section 5(b) above, as to shares of Service-Based Restricted Stock
and Performance-Based Restricted Stock which are Vested Restricted Stock
immediately prior to such termination (i.e., without taking account of
the vesting acceleration described in Section 5(b)), and as to shares of
Performance-Based Restricted Stock for which the Performance Condition, but not
the Service Condition, has been met prior to such termination, the Fair Market
Value on the date of the Call Notice of such shares which are Called Shares.


 


(3)           In the event of a termination
described in Section 5(b) above, as to shares of Service-Based Restricted Stock
which are not Vested Restricted Stock immediately prior to such termination,
the lower of the Fair Market Value on the date of the Call Notice of such
shares which are Called Shares or the Initial Value of such Called Shares.


 


(4)           In the event of a termination
described in Section 5(b) above where a 2X Restricted Stock Liquidity Event,
but not a 3X Restricted Stock Liquidity Event, has occurred prior to such
termination, (A) if the Fair Market Value of the Investor Equity at the time of
such termination is at least the 3X Investor Equity Value then, as to shares of
Performance-Based Restricted Stock for which the Performance Condition had not
been met prior to such termination, the Call Price shall be the Fair Market
Value of such shares which are Called Shares on the date of the Call Notice,
and (B) if the Fair Market Value of the Investor Equity at the time of such
termination is less than the 3X Investor Equity Value then, as to shares of
Performance-Based Restricted Stock for which the Performance Condition had not
been met prior to such termination, the Call Price shall be the lower of the
Fair Market Value on the date of the Call Notice of such shares which are
Called Shares or the Initial Value of such Called Shares.


 


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(5)           In the event of a termination described
in Section 5(b) above where neither a 2X Restricted Stock Liquidity Event nor a
3X Restricted Stock Liquidity Event has occurred prior to such termination, (A)
if the Fair Market Value of the Investor Equity at the time of such termination
is at least the 3X Investor Equity Value then, as to shares of
Performance-Based Restricted Stock for which the Performance Condition had not
been met prior to such termination, the Call Price shall be the Fair Market
Value on the date of the Call Notice of such shares which are Called Shares,
(B) if the Fair Market Value of the Investor Equity at the time of such
termination is at least the 2X Investor Equity Value, but less than the 3X
Investor Equity Value, then, as to one-half of the shares of Performance-Based
Restricted Stock for which the Performance Condition had not been met prior to
such termination, the Call Price shall be the Fair Market Value on the date of
the Call Notice of such shares which are Called Shares, and as to the other
one-half of the shares of Performance-Based Restricted Stock for which the
Performance Condition had not been met prior to such termination, the Call
Price shall be the lower of the Fair Market Value on the date of the Call
Notice of such shares which are Called Shares or the Initial Value of such
Called Shares and (C) if the Fair Market Value of the Investor Equity at the
time of such termination is less than the 2X Investor Equity Value then, as to
shares of Performance-Based Restricted Stock for which the Performance Condition
had not been met prior to such termination, the Call Price shall be the lower
of the Fair Market Value on the date of the Call Notice of such shares which
are Called Shares or the Initial Value of such Called Shares.


 


(ii)           For purposes of Section 5(c)(i), the termination of the
Executive’s employment at the end of the initial Employment Period (i.e., on
the day prior to the fourth anniversary of the Effective Date) in connection
with either the Company or the Executive giving the other a notice of non-renewal,
as described in Section 1 of the Employment Agreement, shall be deemed to be a
termination described in Section 5(b) above.


 


(iii)          Parent or the Call Assignee, as applicable, may exercise
the Call Option by delivering or mailing to the Executive (or to his estate, if
applicable), in accordance with Section 15 of this Agreement, written notice of
exercise (a “Call Notice”) at any time following the termination of the
Executive’s employment with the Company. The Call Notice shall specify the date
thereof, the number of Called Shares and the Call Price.


 


(iv)          Within ten (10) days after his receipt of the Call Notice,
the Executive (or his estate) shall tender to Parent or the Call


 


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Assignee, as applicable, at its principal office the
certificate or certificates representing the Called Shares, duly endorsed in
blank by the Executive (or his estate) or with duly endorsed stock powers
attached thereto, all in form suitable for the transfer of such shares to Parent
or the Call Assignee, as applicable, (the date on which the Company receive
such certificate or certificates, the “Call Date”). Upon its receipt of
such shares, Parent or the Call Assignee, as applicable, shall pay to the
Executive the aggregate Call Price therefore, in cash.


 


(v)           Parent or the Call Assignee, as
applicable, will be entitled to receive customary representations and
warranties from the Executive regarding the sale of the Called Shares pursuant
to the exercise of the Call Option as may reasonably requested by Parent or the
Call Assignee, as applicable, including but not limited to the representation
that the Executive has good and marketable title to the Called Shares to be
transferred free and clear of all liens, claims and other encumbrances.


 


(vi)          If Parent or the Call Assignee, as
applicable, delivers a Call Notice, then from and after the time of delivery of
the Call Notice the Executive shall no longer have any rights as a holder of
the Called Shares subject thereto (other than the right to receive payment of
the Call Price as described above), and such Called Shares shall be deemed
purchased in accordance with the applicable provisions hereof and Parent or the
Call Assignee, as applicable, shall be deemed to be the owner and holder of
such Called Shares.


 


(vii)         Any Vested Restricted Shares as to
which the Call Option is not exercised will remain subject to all terms and
conditions of this Agreement, including the continuation of Parent’s or the
Call Assignee’s, as applicable, right to exercise the Call Option.


 


(viii)        The Section 5(c) is in addition to, and
not in lieu of, any rights and obligations of the Executive and Parent in
respect of the Restricted Shares contained in the “Stockholders Agreement” (as
defined below). Notwithstanding the above, this Section 5(c) shall become
ineffective on and following an IPO or any other event which causes the Class A
Common Stock, or other securities for which all or substantially all of the
Class A Common Stock may have been exchanged, to be or become listed for
trading on or over an established securities market or established trading
system.


 


6.             Rights as a Stockholder;
Dividends.


 


(a)           The Executive shall be the record
owner of the Restricted Shares unless and until such shares are forfeited pursuant
to Sections 2 or 5 hereof or sold or otherwise disposed of, and as record owner
shall be entitled to all rights of a common stockholder of Parent, including,
without limitation, voting rights, if any, with respect to


 


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the
Restricted Shares; provided  that (i) any cash or in-kind
dividends paid with respect to Restricted Shares which are not Vested
Restricted Shares shall be withheld by Parent and shall be paid to the
Executive, without interest, only when, and if, such Restricted Shares shall
become Vested Restricted Shares (provided, however, that in the event of a
rights offering in which the Restricted Shares are entitled to participate, the
Executive shall be entitled to subscribe for and purchase any securities made
available in such rights offering with
respect to all Restricted Shares, whether or not such Restricted Shares are
Vested Restricted Shares), and (ii) the Restricted Shares shall be subject to
the limitations on transfer and encumbrance set forth in this Agreement and the
Stockholders’ Agreement to be executed and entered into by and between Parent,
the Investors, the Executive and the other parties thereto on or about the
Effective Date (the “Stockholders’ Agreement”), as annexed hereto as
Exhibit A. As soon as practicable following the vesting of any Restricted
Shares, certificates for such Vested Restricted Shares shall be delivered to
the Executive or to the Executive’s legal representative along with the stock
powers relating thereto.


 


(b)           At or promptly following an IPO or
any other transaction which makes Parent eligible to use SEC Form S-8, Parent
shall register all of the Restricted Shares (whether or not vested) on Form S-8
or an equivalent registration statement (including, at Parent’s option, on the
Form S-1 filed in connection with an IPO), and use reasonable commercial
efforts to keep such registration effective so long as the Executive continues
to hold any of the Restricted Shares.


 


7.             Restrictive Legend. All
certificates representing Restricted Shares shall have affixed thereto a legend
in substantially the following form, in addition to any other legends that may
be required under federal or state securities laws, unless and to the extent
determined inapplicable or unnecessary by Parent:


 


THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND AN OPTION TO PURCHASE SET FORTH IN A CERTAIN RESTRICTED STOCK
AWARD AGREEMENT BETWEEN WMG PARENT CORP. AND THE REGISTERED OWNER OF THIS
CERTIFICATE (OR HIS PREDECESSOR IN INTEREST) AND A STOCKHOLDERS’ AGREEMENT TO
WHICH WMG PARENT CORP. AND THE REGISTERED OWNER OF THIS CERTIFICATE (OR HIS PREDECESSOR
IN INTEREST) ARE PARTIES, WHICH AGREEMENTS ARE BINDING UPON ANY AND ALL OWNERS
OF ANY INTEREST IN SAID SHARES. SAID AGREEMENTS ARE AVAILABLE FOR INSPECTION
WITHOUT CHARGE AT THE PRINCIPAL OFFICE OF WMG PARENT CORP. AND COPIES THEREOF
WILL BE FURNISHED WITHOUT CHARGE TO ANY OWNER OF SAID SHARES UPON REQUEST.


 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE


 


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SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE,
AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED AND ANY APPLICABLE STATE SECURITIES LAWS,
UNLESS WMG PARENT CORP. HAS RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS
REASONABLY SATISFACTORY TO IT, TO THE EFFECT THAT SUCH REGISTRATIONS ARE NOT
REQUIRED.


 


8.             Transferability.


 


(a)           The
Restricted Shares may not, at any time prior to becoming Vested Restricted
Shares, be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Executive and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance; and provided further that the foregoing
restriction shall not apply to a sale of Restricted Shares in compliance with
the obligations, if any, of the holder thereof to sell such shares pursuant to
the “drag along” provisions of the Stockholders’ Agreement.


 


(b)           Prior
to an IPO, neither the Executive nor any transferee of the Executive (including
any beneficiary, executor or administrator) shall assign, alienate, pledge,
attach, sell or otherwise transfer or encumber the Restricted Shares upon or
subsequent to their vesting, except in accordance with the applicable
provisions of this Agreement and the Stockholders’ Agreement; provided, that,
Vested Restricted Shares may be transferred (i) by will or the laws of descent,
or (ii) with the Board’s approval (which may be granted or withheld at its sole
discretion), by the Executive without consideration to (A) any person who is a “family
member” of the Executive, as such term is used in the instructions to SEC Form
S-8 (collectively, the “Immediate Family Members”); (B) a trust solely
for the benefit of the Executive and/or Immediate Family Members; or (C) any
other transferee as may be approved by the Board in its sole discretion
(collectively, the “Permitted Transferees”); provided, that,
the Executive gives the Board advance written notice describing the terms and
conditions of the proposed transfer and the Board notifies the Executive in
writing that such a transfer is in compliance with the terms of this Agreement;
provided, further, that, the restrictions upon any Vested
Restricted Shares transferred in accordance with this Section 8(b) shall apply
to the Permitted Transferee, such transfer shall be subject to the acceptance
by the Permitted Transferee of the terms and conditions hereof, and any
reference in this Agreement or the Stockholders’ Agreement to the Executive
shall be deemed to refer to the Permitted Transferee, except that (a) prior to
an IPO, Permitted Transferees shall not be entitled to transfer any Vested
Restricted Shares other than by will or the laws of descent and distribution
or, with the Board’s approval (which may be granted or withheld at its sole discretion),
to a trust solely for the benefit of the Permitted Transferee, and (b) the
consequences of the termination of the Executive’s employment with the Company


 


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under the terms of this Agreement shall continue to be applied with
respect to the Permitted Transferee to the extent specified in this Agreement.


 


9.             Securities Laws. The
Executive represents, warrants and covenants as follows:


 


(a)           The Executive is
acquiring the Restricted Shares for his own account and not with a view to, or
for sale in connection with, any distribution of the Restricted Shares in
violation of the Securities Act or any rule or regulation under the Securities
Act or in violation of any applicable state securities law.


 


(b)           The Executive has
had such opportunity as he has deemed adequate to obtain from representatives
of Parent such information as is necessary to permit him to evaluate the merits
and risks of his investment in the Parent.


 


(c)           The Executive has
sufficient experience in business, financial and investment matters to be able
to evaluate the risks involved in acquiring of the Restricted Shares and to
make an informed investment decision with respect to such investment.


 


(d)           The Executive can
afford the complete loss of the value of the Restricted Shares and is able to
bear the economic risk of holding such shares for an indefinite period.


 


(e)           The Executive
understands that (i) the Restricted Shares have not been registered under the
Securities Act and are “restricted securities” within the meaning of Rule 144
under the Securities Act; (ii) the Restricted Shares cannot be sold,
transferred or otherwise disposed of unless they are subsequently registered
under the Securities Act or an exemption from registration is then available;
(iii) in any event, the exemption from registration under Rule 144 will not be
available for at least one (1) year and even then will not be available unless
a public market then exists for such shares, adequate information concerning
Parent is then available to the public, and other terms and conditions of Rule
144 are complied with and (iv) there is now no registration statement on file
with the SEC with respect to the Restricted Shares and, except as set forth in
Section 6(b) hereof or in the Stockholders’ Agreement, there is no commitment
on the part of Parent to make any such filing.


 


(f)            In addition, upon
any Restricted Shares becoming Vested Restricted Shares, the Executive will
make or enter into such other written representations, the warranties and
agreements as the Board may reasonably determine are legally required in order
to comply with applicable securities laws.


 


10.           Adjustments for Stock Splits,
Stock Dividends, etc.


 


(a)           If from time to time
during the term of this Agreement there is any stock split-up, stock dividend,
stock distribution or other reclassification of Parent’s Class A Common Stock,
any and all new, substituted or additional securities to


 


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which
the Executive is entitled by reason of his ownership of the Restricted Shares
shall be immediately subject to the terms of this Agreement.


 


(b)           If the Parent’s Class A Common Stock
is converted into or exchanged for, or stockholders of Parent receive by reason
of any distribution in total or partial liquidation, securities of another
corporation, or other property (including cash), pursuant to any merger of
Parent or acquisition of its assets, then the rights of Parent under this
Agreement shall inure to the benefit of Parent’s successor and this Agreement
shall apply to the securities or other property received upon such conversion,
exchange or distribution in the same manner and to the same extent as the
Restricted Shares.


 


11.           Confidentiality
of the Agreement. The Executive agrees to keep confidential the terms of
this Agreement. This provision does not prohibit the Executive from providing
this information on a confidential and privileged basis to the Executive’s
attorneys or accountants for purposes of obtaining legal or tax advice or as
otherwise required by law, regulation or stock exchange rule.


 


12.           Severability.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
and each other provision of the Agreement shall be severable and enforceable to
the extent permitted by law.


 


13.           Waiver.
Any right of Parent contained in the Agreement may be waived in writing by the
Board. No waiver of any right hereunder by any party shall operate as a waiver
of any other right, or as a waiver of the same right with respect to any
subsequent occasion for its exercise, or as a waiver of any right to damages.
No waiver by any party of any breach of this Agreement shall be held to constitute
a waiver of any other breach or a waiver of the continuation of the same
breach.


 


14.           No
Rights to Employment. Nothing contained in this Agreement shall be
construed as giving the Executive any right to be retained, in any position, as
an employee, consultant or director of any member of the Parent Group.


 


15.           Notices.
Any notice, consent, request or other communication made or given in accordance
with this Agreement shall be in writing and shall be deemed to have been duly
given when actually received or, if mailed, three days after mailing by
registered or certified mail, return receipt requested, or one business day
after mailing by a nationally recognized express mail delivery service with
instructions for next-day delivery, to those persons listed below at their
following respective addresses or at such other address or person’s attention
as each may specify by notice to the others:


 


To
Parent:


 


WMG
Parent Corp.


75
Rockefeller Plaza


New
York, New York 10019


Attention:
Chief Executive Officer and General Counsel


 


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To
the Executive:


 


The
most recent address for the Executive in the records of Parent or the Company.
The Executive hereby agrees to promptly provide Parent and the Company with
written notice of any change in the Executive’s address for so long as this
Agreement remains in effect.


 


16.           Beneficiary.
The Executive may file with the Board a written designation of a beneficiary on
such form as may be prescribed by the Board and may, from time to time, amend
or revoke such designation. If no designated beneficiary survives the
Executive, the executor or administrator of the Executive’s estate shall be
deemed to be the Executive’s beneficiary. The Executive’s beneficiary shall
succeed to the rights and obligations of the Executive hereunder upon the
Executive’s death, except as maybe otherwise described herein.


 


17.           Successors.
The terms of this Agreement shall be binding upon and inure to the benefit of
Parent, its successors and assigns, and of the Executive and the beneficiaries,
executors, administrators, heirs and successors of the Executive.


 


18.           Modifications.
No change, modification or waiver of any provision of this Agreement shall be
valid unless the same be in writing and signed by the parties hereto.


 


19.           Restricted
Stock Award Subject to the Stockholders’ Agreement and  Contingent on the
Closing Date Occurring. By entering into this Agreement the Executive
agrees and acknowledges that the Executive has received and read the
Stockholders’ Agreement. The Stockholders’ Agreement as it may be amended from
time to time is hereby incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and any terms or
provisions of the Stockholders’ Agreement, the applicable terms and provisions
of the Stockholders’ Agreement will govern and prevail except with respect to
Section 5(c) hereof. Notwithstanding anything herein contained to the contrary,
this Agreement shall not become effective until and unless the Closing Date
occurs, at which time it shall become the binding and legal obligation of the
parties hereto. If the Purchase Agreement shall be abandoned in accordance with
its terms then this Agreement shall never become effective and shall be null
and void.


 


20.           GOVERNING
LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
AGREEMENTS MADE AND TO BE WHOLLY PERFORMED WITHIN THAT STATE. ANY ACTION TO
ENFORCE THIS AGREEMENT MUST BE BROUGHT IN A COURT SITUATED IN, AND THE PARTIES
HEREBY CONSENT TO THE JURISDICTION OF, COURTS SITUATED IN NEW YORK COUNTY, NEW
YORK. EACH PARTY HEREBY WAIVES THE RIGHTS TO CLAIM THAT ANY SUCH COURT IS AN
INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.


 


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21.           JURY
TRIAL WAIVER. THE PARTIES EXPRESSLY AND KNOWINGLY WAIVE ANY RIGHT TO A JURY
TRIAL IN THE EVENT ANY ACTION ARISING UNDER OR IN CONNECTION WITH THIS
AGREEMENT IS LITIGATED OR HEARD IN ANY COURT.


 


22.           Headings.
The headings of the Sections hereof are provided for convenience only and are
not to serve as a basis for interpretation or construction, and shall not
constitute a part, of this Agreement.


 


23.           Signature
in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. The parties hereto confirm that any
facsimile copy of another party’s executed counterpart of this Agreement (or
its signature page thereof) will be deemed to be an executed original thereof.


 


IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.


 


	
   

  	
  WMG
  PARENT CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Lyor Cohen

  
	
   

  	
  Lyor
  Cohen

  



 


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