Document:

Exhibit 10.9

 

SRS LABS, INC.

2006
STOCK INCENTIVE PLAN

Stock
Option Award Agreement

You are hereby
awarded the following stock option (the “Option”) to purchase Shares of
SRS Labs, Inc. (the “Company”), subject to the terms and conditions set
forth in this Stock Option Award Agreement (the “Award Agreement”) and
in the SRS Labs, Inc. 2006 Stock Incentive Plan (the “Plan”), which is
attached hereto as Exhibit A. 
You should carefully review these documents, and consult with your
personal financial advisor, before exercising this Option.

By executing this
Award Agreement, you agree to be bound by all of the Plan’s terms and
conditions as if they had been set out verbatim below.  In addition, you recognize and agree that all
determinations, interpretations, or other actions respecting the Plan and this
Award Agreement will be made by the Company’s Board of Directors or any
Committee appointed by the Board to administer the Plan, and shall (in the
absence of material and manifest bad faith or fraud) be final, conclusive and
binding on all parties, including you and your successors in interest.  Terms that begin with initial capital letters
have the special meanings set forth in the Plan or in this Award Agreement
(unless the context indicates otherwise).

1.                     Specific
Terms.  This Option shall have, and be
interpreted according to, the following terms, subject to the provisions of the
Plan in all instances:

	
  1.1

  	
   

  	
  Your Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.2

  	
   

  	
  Type of Stock Option:

  	
   

  	
  o

  	
  Incentive Stock Option (ISO)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
  Non-Incentive Stock Option

  
	
  1.3

  	
   

  	
  Number of Shares subject to Option:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.4

  	
   

  	
  Option Exercise Price per Share:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.5

  	
   

  	
  Grant Date:

  	
   

  	
   

  	
   

  

 

1.6                                     Vesting
Schedule:  (Establishes your rights to exercise this Option with respect to the
Number of Shares stated above, subject to your Continuous Service after the
Grant Date and subject to acceleration per Section 2 below and to any
shareholder approval requirement set forth in the Plan.)

	
  Vesting Date

  	
   

  	
  Amount of Shares

  Vested on Vesting Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

 

	
  1.7

  	
   

  	
  Reverse Vesting

  	
   

  	
  o

  	
  Allowed in accordance with Section 6 of the Plan

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
  Not allowed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.8

  	
   

  	
  Lifetime Transfer:

  	
   

  	
  o

  	
  Allowed pursuant to Section 8 below only for
  Non-Incentive Stock Options

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.9

  	
   

  	
  Expiration Date:

  	
   

  	
  o

  	
          years
  after Grant Date; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
  10 years after Grant Date

  

 

2.                   Accelerated
Vesting; Change in Corporate Control.  To the extent you have not
previously vested in your rights with respect to this Award, your Award will
become –

 ̈                                %
vested if your Continuous Service ends due to your death or “disability” within
the meaning of Section 409A of the Code;

 ̈                               %
vested if your Continuous Service ends due to your retirement at or after you
have attained the age of        and completed at
least         full years of Continuous
Service;

 ̈                                %
vested if your Continuous Service ends due to an Involuntary Termination that
occurs within the one-year period following a Change in Control.

3.             Term of Option.  The term of the Option will expire at 5:00
p.m. (P.D.T. or P.S.T., as applicable) on the Expiration Date.

4.             Manner of Exercise.  The Option shall be exercised in the manner
set forth in the Plan, using the exercise form attached hereto as Exhibit B or another form approved by the Company.  The amount of Shares for which the Option may
be exercised is cumulative; that is, if you fail to exercise the Option for all
of the Shares vested under the Option during any period set forth above, then
any Shares subject to the Option that are not exercised during such period may
be exercised during any subsequent period, until the expiration or termination
of the Option pursuant to Sections 2 and 6 of this Award Agreement and the
terms of the Plan.  Fractional Shares may
not be purchased.

5.             Special ISO
Provisions.  If
designated as an ISO, this Option shall be treated as an ISO to the extent
allowable under Section 422 of the Code, and shall otherwise be treated as a
Non-ISO.  If you sell or otherwise
dispose of Shares acquired upon the exercise of an ISO within 1 year from the
date such Shares were acquired or 2 years from the Grant Date, you agree to
deliver a written report to the Company within 10 days following the sale or
other disposition of such Shares detailing the net proceeds of such sale or
disposition.

 

6.             Termination of Continuous Service.  If your Continuous Service with the Company
is terminated for any reason, this Option shall terminate on the date on which
you cease to have any right to exercise the Option pursuant to the terms and
conditions set forth in Section 6 of the Plan.

7.             Designation of
Beneficiary. 
Notwithstanding anything to the contrary contained herein or in the
Plan, following the execution of this Award Agreement, you may expressly
designate a beneficiary (the “Beneficiary”) to your interest in the
Option awarded hereby.  You shall
designate the Beneficiary by completing and executing a designation of
beneficiary agreement substantially in the form attached hereto as Exhibit C (the “Designation
of Beneficiary”) and delivering an executed copy of the Designation of
Beneficiary to the Company.

8.             Restrictions on Transfer of Awards.
This Award Agreement may not be sold, pledged, or otherwise transferred without
the prior written consent of the Committee.  Notwithstanding the
foregoing, you may transfer this Option (if allowed under Section 1 for a
Non-Incentive Stock Option):

(i)            by instrument to an inter vivos or
testamentary trust (or other entity) in which each beneficiary is a permissible
gift recipient, as such is set forth in subsection (ii) of this Section, or

(ii)           by gift to charitable institutions or
by gift or transfer for consideration to any of the following relatives of
yours (or to an inter vivos trust, testamentary trust or other entity primarily
for the benefit of the following relatives of yours): any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, domestic
partner, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive
relationships.

Any transferee of your rights shall succeed and be
subject to all of the terms of this Award Agreement and the Plan.

9.             Conditions on
Issuance of Shares; Transfer Restrictions.  Notwithstanding any other provision of the
Plan or of this Award Agreement: (i) the Committee may condition your receipt
of Shares on your execution of a shareholder agreement imposing terms  generally applicable to other
similarly-situated employee-shareholders; and (ii) any Shares issued pursuant
to this Award Agreement shall be non-transferable except in accordance with Section 8
above,  until the first day of the
seventh month following the termination of your Continuous Service.

10.           Taxes.  By signing this Award Agreement, you
acknowledge that you shall be solely responsible for the satisfaction of any
taxes that may arise (including taxes arising under Sections 409A or 4999 of
the Code), and that neither the Company nor the Administrator shall have any
obligation whatsoever to pay such taxes.

11.           Notices.  Any notice or communication required or
permitted by any provision of this Award Agreement to be given to you shall be
in writing and shall be delivered electronically, personally, or by certified
mail, return receipt requested, addressed to you at the last address that the
Company had for you on its records.  Each
party may, from time to time, by notice to the other party hereto, specify a
new e-mail or home address for delivery of notices relating to this Award
Agreement.  Any such notice shall be
deemed to be given as of the date such notice is personally delivered or
properly mailed.

12.           Binding Effect.  Except as otherwise provided in this Award
Agreement or in the Plan, every covenant, term, and provision of this Award
Agreement shall be binding upon and inure to the benefit

 

of the parties hereto and their respective heirs,
legatees, legal representatives, successors, transferees, and assigns.

13.           Modifications.  This Award Agreement may be modified or
amended at any time, in accordance with Section 15 of the Plan and provided
that you must consent in writing to any modification that adversely and
materially affects your rights or obligations under this Award Agreement (with
such an effect being presumed to arise from a modification that would trigger a
violation of Section 409A of the Code).

14.           Headings.  Section and other headings contained in this
Award Agreement are for reference purposes only and are not intended to
describe, interpret, define or limit the scope or intent of this Award
Agreement or any provision hereof.

15.           Severability.  Every provision of this Award Agreement and
of the Plan is intended to be severable. 
If any term hereof is illegal or invalid for any reason, such illegality
or invalidity shall not affect the validity or legality of the remaining terms
of this Award Agreement.

16.           Counterparts.  This Award Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.

17.           Plan Governs.  By signing this Award Agreement,
you acknowledge that you have received a copy of the Plan and that your Award
Agreement is subject to all the provisions contained in the Plan, the
provisions of which are made a part of this Award Agreement and your Award is
subject to all interpretations, amendments, rules and regulations which from
time to time may be promulgated and adopted pursuant to the Plan.  In the event of a conflict between the
provisions of this Award Agreement and those of the Plan, the provisions of the
Plan shall control.

18.           Investment Purposes. By executing
this Award Agreement, you represent and warrant that any Shares issued to you
pursuant to your Options will be held for investment purposes only for your own
account, and not with a view to, for resale in connection with, or with an
intent in participating directly or indirectly in, any distribution of such
Shares within the meaning of the Securities Act of 1933, as amended.

19.           Not a Contract of Employment.  By executing this Award Agreement you
acknowledge and agree that (i) any person who is terminated before full vesting
of an award, such as the one granted to you by this Award Agreement, could
claim that he or she was terminated to preclude vesting; (ii) you promise never
to make such a claim; (iii) nothing in this Award Agreement or the Plan confers
on you any right to continue an employment, service or consulting relationship
with the Company, nor shall it affect in any way your right or the Company’s
right to terminate your employment, service, or consulting relationship at any
time, with or without Cause; and (iv) the Company would not have granted this
Award to you but for these acknowledgements and agreements.

20.           Governing Law.  The laws of the State of Delaware shall
govern the validity of this Award Agreement, the construction of its terms, and
the interpretation of the rights and duties of the parties hereto.

 

BY YOUR SIGNATURE BELOW, along with the signature of
the Company’s representative, you and the Company agree that the Option is
awarded under and governed by the terms and conditions of this Award Agreement
and the Plan.

 

	
  

  	
  SRS LABS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The undersigned Participant hereby accepts the terms
  of this

  Award Agreement and the Plan.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of Participant:

  	
   

  	
   

  
						

 

 

EXHIBIT A

SRS LABS, INC.

2006
STOCK INCENTIVE PLAN

Plan
Document

 

 

EXHIBIT B

SRS LABS, INC.

2006
STOCK INCENTIVE PLAN

Form of
Exercise of Incentive Stock Option

	
  To:

  	
   

  	
  SRS Labs, Inc.

  
	
  Attention:

  	
   

  	
  Secretary

  

 

Dear Sir or Madam:

The
undersigned elects to exercise his/her Incentive Stock Option to purchase              
shares of Common Stock of SRS Labs, Inc. (the “Company”) under and pursuant to
a Stock Option Award Agreement dated as of                             .

1.    o
Delivered herewith is a certified or bank cashier’s or teller’s check and/or
shares of Common Stock held by the undersigned for at least six months*, valued
at the closing sale price of the stock on the business day prior to the date of
exercise, as follows:

$                        in
cash or check

$                        in
the form of          shares of Common
Stock, valued at $                      
per share

$                     Total

2.    o
Delivered herewith are irrevocable instructions to a broker approved by the
Company to deliver promptly to the Company the amount of sale or loan proceeds
to pay the exercise price.**

If
method 1 is chosen, the name or names to be on the stock certificate or certificates
and the address and Social Security Number of such person(s) is as follows:

	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security Number

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Date

  	
   

  	
   

  	
   

  
	
   

  	
  Name of Optionee:

  	
   

  
									

 

* The Committee may waive the six months’ requirement
in its discretion.

**The Committee
must approve this method in writing before your election.

 

EXHIBIT C

SRS LABS, INC.

2006 STOCK INCENTIVE PLAN

Designation
of Beneficiary

In
connection with the Awards designated below that I have received pursuant to
the Company’s 2006 Stock Incentive Plan (the “Plan”), I hereby designate
the person specified below as the beneficiary upon my death of my interest in
Awards as defined in the Plan.  This
designation shall remain in effect until revoked in writing by me.

	
  Name of Beneficiary:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security
  No.:

  	
   

  	
   

  

 

This
beneficiary designation relates to any and all of my rights under the following
Award or Awards:

o                  any Award that I have received or
ever receive under the Plan.

o                  the                             
Award that I received pursuant to an award agreement dated           
          ,      
    between myself and the Company.

I
understand that this designation operates to entitle the above-named
beneficiary, in the event of my death, to any and all of my rights under the
Award(s) designated above from the date this form is delivered to the Company
until such date as this designation is revoked in writing by me, including by
delivery to the Company of a written designation of beneficiary executed by me
on a later date.

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  Name of Participant:

  	
   

  	
   

  
	
   

  	
   

  	
  (Print Name)

  

 

	
  Sworn to before me this

  	
   

  	
   

  
	
          day
  of                    ,
  20    

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Notary Public

  	
   

  	
   

  
	
  County of  

  	
   

  	
   

  
	
  State ofExhibit
10.10

SRS LABS, INC.

2006 STOCK INCENTIVE PLAN

Restricted Share Award Agreement

 

You are hereby
awarded Restricted Shares subject to the terms and conditions set forth in this
Restricted Share Award Agreement (“Award Agreement” or “Award”),
and in the SRS Labs, Inc. 2006 Stock Incentive Plan (the “Plan”), which
is attached as Exhibit A.  You
should carefully review these documents, and consult with your personal
financial advisor, in order to fully understand the implications of this Award,
including your tax alternatives and their consequences.

By executing this
Award Agreement, you agree to be bound by all of the Plan’s terms and
conditions as if they had been set out verbatim below.  In addition, you recognize and agree that all
determinations, interpretations, or other actions respecting the Plan and this
Award Agreement will be made by the Board of Directors (the “Board”) of
SRS Labs, Inc. (the “Company”), or any Committee appointed by the Board
to administer the Plan, and shall (in the absence of manifest bad faith or
fraud) be final, conclusive and binding upon all parties, including you, your
heirs, and representatives.  Capitalized
terms are defined in the Plan or in this Award Agreement.

1.             Specific
Terms.  Your Restricted
Shares have the following terms:

	
  Name of Participant

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares

  Subject to Award

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Purchase Price
  per

  Share (if applicable)

  	
   

  	
  Not applicable.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Award Date

  	
   

  	
   

  	
   

  	
   

  

 

	
  Vesting

  	
   

  	
  Vesting Date

  	
   

  	
  Amount of Shares

  Vested on Vesting Date

  
	
      

  	
   

  	
   

  	
   

  	
   

  
	
      

  	
   

  	
   

  	
   

  	
   

  
	
      

  	
   

  	
   

  	
   

  	
   

  
	
      

  	
   

  	
   

  	
   

  	
   

  

 

	
  Deferral Elections

  	
   

  	
   ̈
  Allowed in accordance with Section 8(g) of the Plan.   ̈
  Not allowed.

  
	
   

  	
   

  	
   

  
	
  Lifetime
  Transfers

  	
   

  	
   ̈
  Allowed in accordance with Section 12(b) of the Plan.   ̈
  Not allowed.

  

2.             Accelerated Vesting; Change in
Corporate Control.  To
the extent you have not previously vested in your rights with respect to this
Award, your Award will become –

o                       %
vested if your Continuous Service ends due to your death or “disability” within
the meaning of Section 409A of the Code;

o                       %
vested if your Continuous Service ends due to your retirement at or after you
have attained the age of       and completed at least       
full years of Continuous Service;

o                       %
if your Continuous Service ends due to an Involuntary Termination that occurs
within the one year period following a Change in Control.

3.             Dividends.   When Shares are released to you or your
duly-authorized transferee pursuant to the vesting of the Shares, you or your
duly-authorized transferee shall also be entitled to receive, with respect to
each Share released, a number of Shares equal to the sum of (i) any stock
dividends, which were declared and paid to the holders of Shares between the
Grant Date and the date such Share is released from the vesting restrictions,
and (ii) a number of Shares equal to the Shares that the Participant could have
purchased at Fair Market Value on the payment date of any cash dividends for
Shares if the Participant had received such cash dividends between its Grant
Date and its settlement date.  To the
extent that your Continuous Service ends before vesting of the Shares, you will
forfeit all dividends (whether paid in cash or in stock) attributable to all
such shares.

4.             Investment Purposes.  By executing this Award, you acknowledge that
you are receiving and will be holding your Restricted Shares for investment
purposes only for your own account, and not with a view to, for resale in
connection with, or with an intent of participating directly or indirectly in,
any distribution of such Shares within the meaning of the Securities Act of
1933, as amended.

5.             Issuance of Restricted Shares.  Until all vesting restrictions lapse, any
certificates that you receive for Restricted Shares will include a legend
stating that they are subject to the restrictions set forth in the Plan and
this Award Agreement.  The certificates evidencing such
Restricted Shares that will be issued will bear the following legend that shall
remain in place and effective until all other vesting restrictions lapse and
new certificates are issued:

“The sale or other transfer of the Stock
represented by this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on transfer set forth in
the SRS Labs, Inc. 2006 Stock Incentive Plan, and in any rules and
administrative procedures adopted pursuant to such Plan and in a related Award
Agreement.  A copy of the Plan, such
rules and procedures and such Award Agreement may be obtained from the
Secretary of SRS Labs, Inc.”

6.             Unvested Restricted Shares.  The Company will hold all Restricted Shares
in escrow until vesting occurs.  You will
be reflected as the owner of record on the Company’s books and records of any
Shares issued pursuant to this Award Agreement. The Company will hold the stock
certificates for safekeeping until such Shares have become vested and
non-forfeitable.  You must deliver to the
Company, as soon as practicable after the date any Shares are issued, a stock
power, endorsed in blank, with respect to any such Shares. If you forfeit any
Shares, the stock power will be used to return the certificates for the
forfeited Shares to the transfer agent for cancellation.  As the owner of record of any Restricted
Shares you qualify to receive pursuant to this Award Agreement, you will be
entitled to all rights of a stockholder of the Company, including the right to
vote Shares;

 2
 

subject, however, to the provisions of Section 3
hereof with respect to any cash or stock dividends that are paid between the
date of this Award and your receipt of shares pursuant to a vesting event,
subject in each case to the treatment of the Award upon termination of
employment before the particular record date for determining stockholders of
record entitled to the payment of the dividend or distribution.  To the extent such a dividend is paid in
stock, such stock shall be subject to the same restrictions contained in
Section 1.

7.             Section 83(b) Election Notice.  If you make an election under Section
83(b) of the Internal Revenue Code of 1986, as amended, with respect to the
Shares underlying your Restricted Shares (a “Section 83(b) election”),
you agree to provide a copy of such election to the Company within 10 days
after filing that election with the Internal Revenue Service.  Exhibit B contains a suggested form of
Section 83(b) election.

8.             Designation of Beneficiary.  Notwithstanding anything to the contrary
contained herein or in the Plan, following the execution of this Award
Agreement, you may expressly designate a beneficiary (the “Beneficiary”)
to your interest, if any, in this Award and any underling Shares.  You shall designate the Beneficiary by
completing and executing a designation of beneficiary agreement substantially
in the form attached hereto as Exhibit C (the “Designation of
Beneficiary”) and delivering an executed copy of the Designation of
Beneficiary to the Company.

9.             Restrictions on Transfer
of Award. If lifetime transfers are allowed under Section 1,
your rights under this Award Agreement may not be sold, pledged, or otherwise
transferred without the prior written consent of the Committee. 
Notwithstanding the foregoing, the Participant may transfer the Restricted
Shares that are subject to this Award (i) by instrument to an inter vivos or
testamentary trust (or other entity) in which each beneficiary is a permissible
gift recipient, as such is set forth in subsection (ii) of this Section, or
(ii) by gift to charitable institutions or by gift or transfer for
consideration to any of the following relatives of the Participant (or to an
inter vivos trust, testamentary trust or other entity primarily for the benefit
of the following relatives of the Participant): any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, domestic
partner, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
and shall include adoptive relationships.  Any transferee of the
Participant’s rights shall succeed and be subject to all of the terms of this
Award Agreement and the Plan.

10.           Conditions on Issuance of
Shares; Transfer Restrictions. 
Notwithstanding any other provision of the Plan or of this Award
Agreement: (i) the Committee may condition your receipt of Shares on your
execution of a shareholder agreement imposing terms  generally applicable to other
similarly-situated employee-shareholders; and (ii) any Shares issued pursuant
to this Award Agreement shall be non-transferable except in accordance with
Section 9 above, until the first day of the seventh month following the
termination of your Continuous Service.

11.           Taxes.  By
signing this Award Agreement, you acknowledge that you are solely responsible
and liable for the satisfaction of all taxes and penalties that may arise in
connection with this Award (including any taxes arising under Section 409A of
the Code), and the Company shall not have any obligation to indemnify or
otherwise hold you harmless from any or all of such taxes or penalties.

 3
 

The Committee shall have the sole discretion to
interpret the requirements of the Code, including Section 409A, for purposes of
the Plan and this Award Agreement.

12.           Notices.  Any
notice or communication required or permitted by any provision of this Award
Agreement to be given to you shall be in writing and shall be delivered
electronically, personally, or sent by certified mail, return receipt
requested, addressed to you at the last address that the Company had for you on
its records.  Each party may, from time
to time, by notice to the other party hereto, specify a new address for
delivery of notices relating to this Award Agreement.  Any such notice shall be deemed to be given
as of the date such notice is personally delivered or properly mailed.

13.           Binding Effect.  Except as otherwise provided in this Award
Agreement or in the Plan, every covenant, term, and provision of this Award
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, legatees, legal representatives, successors,
transferees, and assigns.

14.           Modifications.  This Award Agreement may be modified or
amended at any time, in accordance with Section 15 of the Plan and provided
that you must consent in writing to any modification that adversely and
materially affects any rights or obligations under this Award Agreement (with
such an effect being presumed to arise from a modification that would trigger a
violation of Section 409A of the Code).

15.           Headings.  Section and other headings contained in this
Award Agreement are for reference purposes only and are not intended to
describe, interpret, define or limit the scope or intent of this Award
Agreement or any provision hereof.

16.           Severability.  Every provision of this Award Agreement and
of the Plan is intended to be severable. 
If any term hereof is illegal or invalid for any reason, such illegality
or invalidity shall not affect the validity or legality of the remaining terms
of this Award Agreement.

17.           Counterparts.  This Award Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.

18.           Plan Governs.  By signing this Award Agreement, you acknowledge
that you have received a copy of the Plan and that your Award Agreement is
subject to all the provisions contained in the Plan, the provisions of which
are made a part of this Award Agreement and your Award is subject to all
interpretations, amendments, rules and regulations which from time to time may
be promulgated and adopted pursuant to the Plan.  In the event of a conflict between the
provisions of this Award Agreement and those of the Plan, the provisions of the
Plan shall control.

19.           Not a Contract of Employment.  By executing this Award Agreement you
acknowledge and agree that (i) any person who is terminated before full vesting
of an award, such as the one granted to you by this Award, could claim that he
or she was terminated to preclude vesting; (ii) you promise never to make such
a claim; (iii) nothing in this Award Agreement or the Plan confers on

 4
 

you any right to continue
an employment, service or consulting relationship with the Company, nor shall
it affect in any way your right or the Company’s right to terminate your
employment, service, or consulting relationship at any time, with or without
Cause; and (iv) the Company would not have granted this Award to you but for
these acknowledgements and agreements.

20.           Governing Law.  The laws of the State of Delaware shall
govern the validity of this Award Agreement, the construction of its terms, and
the interpretation of the rights and duties of the parties hereto.

BY YOUR SIGNATURE BELOW, along with the signature of
the Company’s representative, you and the Company agree that the Restricted
Shares are awarded under and governed by the terms and conditions of this Award
Agreement and the Plan.

 

	
  

  	
   

  	
  SRS
  LABS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The undersigned
  Participant hereby accepts the terms of this

  Award and the Plan.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name of
  Participant:

  	
   

  	
   

  
											

 5

EXHIBIT A

 

SRS LABS, INC.

2006 STOCK INCENTIVE PLAN

Plan Document

EXHIBIT B

 

SRS LABS, INC.

2006 STOCK INCENTIVE PLAN

Section 83(b) Election Form

Attached
is an Internal Revenue Code Section 83(b) Election Form.  IF YOU WISH TO MAKE A
SECTION 83(B) ELECTION, YOU MUST  MAKE
YOUR ELECTION WITHIN 30 DAYS FOLLOWING THE ISSUANCE OF THE RESTRICTED SHARES
COVERED BY THE ELECTION.  In
order to make the election, you must completely fill out the attached form and
file one copy with the Internal Revenue Service office where you file your tax
return.  In addition, one copy of the
statement also must be submitted with your income tax return for the taxable
year in which you make this election. 
Finally, you also must submit a copy of the election form to the Company
within 10 days after filing that election with the Internal Revenue Service.  A Section 83(b) election normally cannot be
revoked.

SRS LABS, INC.

2006 STOCK INCENTIVE PLAN

Election to Include Value of
Restricted Shares in Gross Income

in Year of Transfer Under Internal Revenue Code Section 83(b)

Pursuant to Section 83(b) of the Internal Revenue
Code, I hereby elect within 30 days after receiving the property described
herein to be taxed immediately on its value specified in item 5 below.

1.                                       My
General Information:

	
  Name:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  S.S.N.

  	
   

  	
   

  
	
  or T.I.N.:   

  	
   

  	
   

  

 

2.                                       Description
of the property with respect to which I am making this election:

                                    
shares of                            
stock of SRS Labs, Inc. (the “Restricted Shares”).

3.                                       The
Restricted Shares were transferred to me on                             
      , 20    .  This election relates to the 20        
calendar taxable year.

4.                                       The
Restricted Shares are subject to the following restrictions:

The Restricted
Shares are forfeitable until they are earned in accordance with Section 1 of
the SRS Labs, Inc. 2006 Stock Incentive Plan (“Plan”) Restricted Shares
Award Agreement (“Award Agreement”) or other Award Agreement or Plan
provisions. The Restricted Shares generally are not transferable until my
interest becomes vested and nonforfeitable, pursuant to the Award Agreement and
the Plan.

5.                                       Fair
market value:

The fair market
value at the time of transfer (determined without regard to any restrictions
other than restrictions which by their terms never will lapse) of the Restricted
Shares with respect to which I am making this election is $          
per share.

6.             Amount
paid for Restricted Shares:

The amount I paid
for the Restricted Shares is $        
per share.

7.             Furnishing
statement to employer:

A copy of this
statement has been furnished to my employer,                             .  If the transferor of the Restricted Shares is
not my employer, that entity also has been furnished with a copy of this
statement.

8.             Award
Agreement or Plan not affected:

Nothing contained
herein shall be held to change any of the terms or conditions of the Award
Agreement or the Plan.

	
  Dated:
                          
      , 20    .

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Taxpayer

  	
   

  

 

EXHIBIT C

 

SRS LABS, INC.

2006 STOCK INCENTIVE PLAN

Designation of Beneficiary

In connection with Awards granted pursuant to the
Plan, I hereby designate the person specified below as the beneficiary upon my
death of my interest in Awards as defined in the Company’s 2006 Stock Incentive
Plan (the “Plan”).  This designation
shall remain in effect until revoked in writing by me.

	
  Name of Beneficiary:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security No.:

  	
   

  	
   

  

 

This beneficiary designation relates to any and all of
my rights under the following Award or Awards:

o                  any Award that I
have received or ever receive under the Plan.

o                  the                          
Award that I received pursuant to an award agreement dated                   
    ,         
between myself and the Company.

I understand that this designation operates to entitle
the above-named beneficiary, in the event of my death, to any and all of
my rights under the Award(s) designated above from the date this form is
delivered to the Company until such date as this designation is revoked in
writing by me, including by delivery to the Company of a written designation of
beneficiary executed by me on a later date.

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  Name of Participant:

  	
   

  	
   

  
	
   

  	
   

  	
  (Print Name)

  

 

	
  Sworn to before me this

  	
   

  	
   

  
	
          day
  of
                     ,
  20    

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Notary Public

  	
   

  	
   

  
	
  County of  

  	
   

  	
   

  
	
  State of

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