EXHIBIT 10.122 - FORM OF STOCK OPTION AGREEMENT FOR DIRECTORS AND OFFICERS UNDER
THE 2002 EQUITY INCENTIVE PLAN
INTERLAND, INC.
2002 EQUITY INCENTIVE PLAN
NOTICE OF GRANT
This Notice of Grant (the "AGREEMENT") is made and entered into as of
the date of grant set forth below (the "DATE OF GRANT") by and between
Interland, Inc., a Minnesota corporation ("INTERLAND"), and the participant
named below (the "PARTICIPANT"). Capitalized terms not defined herein shall have
the meaning ascribed to them in Interland, Inc. 2002 Equity Incentive Plan.
PARTICIPANT:
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TOTAL OPTION SHARES:
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EXERCISE PRICE PER SHARE:
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DATE OF GRANT:
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FIRST VESTING DATE:
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EXPIRATION DATE:
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IN WITNESS WHEREOF, Interland, Inc. has caused this Agreement to be
executed in duplicate by its duly authorized representative and Participant has
executed this Agreement in duplicate, effective as of the Date of Grant.
INTERLAND, INC. PARTICIPANT
By: /s/ Xxxx Xxxxxx
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(Signature)
Xxxx Xxxxxx
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(Please print name) (Please print name)
CEO and Chairman of the Board
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(Please print title)
TERMS AND CONDITIONS
OF NOTICE OF GRANT
1. GRANT OF OPTION. Interland hereby grants to Participant an
option (this "OPTION") to purchase the total number of shares of Common Stock,
..01 par value, of Interland set forth above as Total Option Shares (the
"SHARES") at the Exercise Price Per Share set forth above (the "EXERCISE
PRICE"), subject to all of the terms and conditions of this Agreement and the
Plan.
2. EXERCISE PERIOD.
2.1 Exercise Period of Option. Provided Participant
continues to provide services to Interland or a Subsidiary, the Option will
become vested and exercisable as to portions of the Shares as follows: (i) this
Option shall not vest nor be exercisable with respect to any of the Shares until
the First Vesting Date set forth on the first page of this Agreement (the "FIRST
VESTING DATE"); (ii) on the First Vesting Date the Option will become vested and
exercisable as to twenty-five percent (25%) of the Shares; and (iii) thereafter
at the end of each full succeeding month the Option will become vested and
exercisable as to 2.08333% of the Shares until the Shares are vested with
respect to one hundred percent (100%) of the Shares. If application of the
vesting percentage causes a fractional share, such share shall be rounded down
to the nearest whole share for each month except for the last month in such
vesting period, at the end of which last month this Option shall become
exercisable for the full remainder of the Shares.
2.2 Vesting of Options. Shares that are vested pursuant
to the schedule set forth in Section 2.1 are "VESTED SHARES." Shares that are
not vested pursuant to the schedule set forth in Section 2.1 are "UNVESTED
SHARES."
3. TERMINATION.
3.1 Termination for Any Reason Except Death, Disability
or Cause. If Participant is Terminated for any reason other than death,
Disability or for Cause, then the Participant may exercise such Participant's
Options only to the extent that such Options are exercisable upon the
Termination Date or as otherwise determined by the Committee. Such Options must
be exercised by the Participant, if at all, as to all or some of the Vested
Shares calculated as of the Termination Date or such other date determined by
the Committee, within thirty (30) days after the Termination Date but in any
event, no later than the expiration date of the Options.
3.2 Termination Because of Death or Disability. If
Participant is Terminated because of Participant's death or Disability (or the
Participant dies within thirty (30) days after a Termination other than for
Cause), then Participant's Options may be exercised only to the extent that such
Options are exercisable by Participant on the Termination Date or as otherwise
determined by the Committee. Such options must be exercised by Participant (or
Participant's legal representative or authorized assignee), if at all, as to all
or some of the Vested Shares calculated as of the Termination Date or such other
date determined by the Committee, within twelve (12) months after the
Termination Date but in any event no later than the expiration date of the
Options.
3.3 Termination for Cause. If Participant is terminated
for Cause, then Participant's Options shall expire on such Participant's
Termination Date, or at such later time and on such conditions as are determined
by the Committee.
3.4 No Obligation to Employ. Nothing in the Plan or this
Agreement shall confer on Participant any right to continue in the employ of, or
other relationship with, Interland or a Subsidiary or limit in any way the right
of Interland or a Subsidiary to terminate Participant's employment or other
relationship at any time, with or without Cause.
3.5 Confidentiality. Participant agrees that information
regarding this Option, including, but not limited to, the issuance of the Option
to Participant and the number of Shares subject to the Option, is Interland
confidential information, and is subject to Participant's obligations to
maintain such information in confidence. Participant agrees not to disclose such
information to any third party, except to his or her immediate family members,
accountants, financial advisors and attorneys (each of whom shall be informed of
the confidential nature of the information and agree not to disclose the
information to any third party), or as required by law. Participant agrees that
the Committee may, at its discretion, immediately terminate all or part of this
Option if Participant violates this Section 3.5.
4. MANNER OF EXERCISE.
4.1 Stock Option Exercise Agreement. To exercise this
Option, Participant (or in the case of exercise after Participant's death or
incapacity, Participant's executor, administrator, heir or legatee, as the case
may be) must deliver to Interland an executed stock option exercise agreement in
such form as may be approved by the Committee from time to time (the "EXERCISE
AGREEMENT"), which shall set forth, inter alia, (i) Participant's election to
exercise the Option, (ii) the number of Shares being purchased, (iii) any
restrictions imposed on the Shares and (iv) any representations, warranties and
agreements regarding Participant's investment intent and access to information
as may be required by Interland to comply with applicable securities laws. If
someone other than Participant exercises the Option, then such person must
submit documentation reasonably acceptable to Interland verifying that such
person has the legal right to exercise the Option and such person shall be
subject to all of the restrictions contained herein as if such person were the
Participant.
4.2 Limitations on Exercise. The Option may not be
exercised unless such exercise is in compliance with all applicable federal and
state securities laws, as they are in effect on the date of exercise. The Option
may not be exercised as to fewer than one hundred (100) Shares unless it is
exercised as to all Shares as to which the Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be accompanied
by full payment of the Exercise Price for the shares being purchased in cash (by
check), or where permitted by law:
(a) by cancellation of indebtedness of Interland or a
Subsidiary to the Participant;
(b) by surrender of shares of Interland's Common Stock
that (i) either (A) have been owned by Participant
for more than six (6) months and have been paid for
within the meaning of SEC Rule 144 (and, if such
shares were purchased from Interland by use of a
promissory note, such note has
been fully paid with respect to such shares); or (B)
were obtained by Participant in the open public
market; and (ii) are clear of all liens, claims,
encumbrances or security interests;
(c) by waiver of compensation due or accrued to
Participant from Interland or a Subsidiary for
services rendered;
(d) provided that a public market for Interland's stock
exists: (i) through a "same day sale" commitment from
Participant and a broker-dealer that is a member of
the National Association of Securities Dealers (an
"NASD DEALER") whereby Participant irrevocably elects
to exercise the Option and to sell a portion of the
Shares so purchased sufficient to pay for the total
Exercise Price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to
forward the total Exercise Price directly to
Interland, or (ii) through a "margin" commitment from
Participant and an NASD Dealer whereby Participant
irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in
a margin account as security for a loan from the NASD
Dealer in the amount of the total Exercise Price, and
whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the total Exercise
Price directly to Interland; or
(e) any other form of consideration approved by the
Committee; or
(f) by any combination of the foregoing.
4.4 Tax Withholding. Prior to the issuance of the Shares
upon exercise of the Option, Participant must pay or provide for any applicable
federal, state and local withholding obligations of Interland or any Subsidiary.
If the Committee permits, Participant may provide for payment of withholding
taxes upon exercise of the Option by requesting that Interland retain the
minimum number of Shares with a Fair Market Value equal to the minimum amount of
taxes required to be withheld; but in no event will Interland withhold Shares if
such withholding would result in adverse accounting consequences to Interland or
any Subsidiary. In such case, Interland shall issue the net number of Shares to
the Participant by deducting the Shares retained from the Shares issuable upon
exercise.
4.5 Issuance of Shares. Provided that the Exercise
Agreement and payment are in form and substance satisfactory to counsel for
Interland, Interland shall issue the Shares registered in the name of
Participant, Participant's authorized assignee, or Participant's legal
representative, and shall deliver certificates representing the Shares with the
appropriate legends affixed thereto.
5. CORPORATE TRANSACTIONS.
5.1 Assumption or Replacement of Options by Successor. In
the event of a Change in Control all outstanding Options shall become fully
exercisable, and such Options shall be assumed or replaced by the Acquiring
Corporation which assumption, conversion or replacement will be binding on all
Participants.
5.2 Replacement Awards. Replacement Options shall be at
least as favorable to Participants in every respect as those replaced.
5.3 Other Treatment of Options. Subject to any greater
rights granted to Participants under the foregoing provisions of this Section 5,
in the event of the occurrence of any transaction described in Section 5.1
hereof, any outstanding Options will be treated as provided in the applicable
agreement or plan of merger, consolidation, dissolution, liquidation or sale of
assets.
6. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of the
Option and the issuance and transfer of Shares shall be subject to compliance by
Interland and Participant with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which Interland's Common Stock may be listed at the time of such issuance or
transfer. Participant understands that neither Interland nor any Subsidiary is
under any obligation to register or qualify the Shares with the SEC, any state
securities commission or any stock exchange to effect such compliance.
7. NONTRANSFERABILITY OF OPTION. The Option may not be
transferred in any manner other than by will or by the laws of descent and
distribution or as determined by the Committee. The terms of the Option shall be
binding upon the executors, administrators, successors and assigns of
Participant. Unless otherwise restricted by the Committee, the Option shall be
exercisable: (i) during the Participant's lifetime only by (A) the Participant,
(B) the Participant's guardian or legal representative, (C) a Family Member of
the Participant who has acquired the Option by "permitted transfer;" and (ii)
after Participant's death, by the legal representative of the Participant's
heirs or legatees. "Permitted transfer" means, as authorized by this Plan and
the Committee in an Option, any transfer effected by the Participant during the
Participant's lifetime of an interest in such Option but only such transfers
which are by gift or domestic relations order. A permitted transfer does not
include any transfer for value and neither of the following are transfers for
value: (a) a transfer of under a domestic relations order in settlement of
marital property rights or (b) a transfer to an entity in which more than fifty
percent of the voting interests are owned by Family Members or the Participant
in exchange for an interest in that entity.
8. TAX CONSEQUENCES. Set forth below is a brief summary as of the
Effective Date of the Plan of some of the tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
8.1 Exercise of Nonqualified Stock Option. There may be a
regular federal and state income tax liability upon the exercise of the Option.
Participant will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If Participant is
a current or former employee of Interland or a Subsidiary, Interland may be
required to withhold from Participant's compensation or collect from Participant
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
8.2 Disposition of Shares. The following tax consequences
may apply upon disposition of the Shares. If the Shares are held for more than
twelve (12) months after the date of purchase of the Shares pursuant to the
exercise of an Option, any gain realized on disposition of the Shares will be
treated as long term capital gain. If the Shares are disposed of within this
twelve (12) month period, any gain realized on such disposition will be treated
as compensation income. Interland may be required to withhold from the
Participant's compensation or collect from the Participant and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income.
9. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any
of the rights of a stockholder with respect to any Shares until the Shares are
issued to Participant.
10. INTERPRETATION. Any dispute regarding the interpretation of
this Agreement shall be submitted by Participant or Interland to the Committee
for review. The resolution of such a dispute by the Committee shall be final and
binding on Interland and Participant.
11. ENTIRE AGREEMENT. The Plan is incorporated herein by
reference. This Agreement and the Plan constitute the entire agreement of the
parties and supersede all prior undertakings and agreements with respect to the
subject matter hereof.
12. NOTICES. Any notice required to be given or delivered to
Interland under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of Interland at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to Interland. All
notices shall be deemed to have been given or delivered upon: (i) personal
delivery; (ii) three (3) days after deposit in the United States mail by
certified or registered mail (return receipt requested); (iii) one (1) business
day after deposit with any return receipt express courier (prepaid); or (iv) one
(1) business day after transmission by facsimile, rapifax or telecopier.
13. SUCCESSORS AND ASSIGNS. Interland may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of Interland. Subject to the restrictions
on transfer set forth herein, this Agreement shall be binding upon Participant
and Participant's heirs, executors, administrators, legal representatives,
successors and assigns.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota. If any
provision of this Agreement is determined by a court of law to be illegal or
unenforceable, then such provision will be enforced to the maximum extent
possible and the other provisions will remain fully effective and enforceable.
15. ACCEPTANCE. Participant hereby acknowledges receipt of a copy
of the Plan and this Agreement. Participant has read and understands the terms
and provisions thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of the Option or disposition of
the Shares and that Participant should consult a tax adviser prior to such
exercise or disposition.
