EXHIBIT 10.4
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (this "Agreement") is entered into as of 22
December 2005 between INTERLAND, INC., a Minnesota corporation (the "Company" or
"Interland") and Xxxxxxx Xxxxxx ("Executive").
Interland, Executive and the Company are parties to an employment agreement
dated of even date herewith (the "Employment Agreement").
In connection with Executive's employment, and as a material inducement for
Executive to accept employment with the Company, the Company has determined to
grant to Executive ONE HUNDRED FIFTY-THREE THOUSAND FOUR HUNDRED SIXTY-SIX
(153,466) shares of the common stock, no par value per share, of Interland,
subject to the terms, conditions and restrictions set forth in this Agreement
(the "Common Stock").
Therefore, the parties agree as follows:
1. Grant of Restricted Stock. Subject to the terms and conditions of this
Agreement, Interland hereby grants to Executive ONE HUNDRED FIFTY-THREE THOUSAND
FOUR HUNDRED SIXTY-SIX (153,466) shares of the common stock, no par value per
share, of Interland, Inc. (the "Restricted Stock"). The interest of Executive in
the Restricted Stock is fully vested as of the date of this Agreement and the
Company shall have no right to repurchase with respect to any of the Restricted
Stock.
2. Restrictions on Transfer.
(a) Lock-Up Period. Executive hereby agrees that, except as provided
in Section 2(b), below, he will not, directly or indirectly offer, sell, assign,
transfer, encumber, pledge, contract to sell, grant an option to purchase, or
otherwise dispose of (collectively, "Transfer") any of the Restricted Stock or
securities convertible or exchangeable into, or exercisable for, Restricted
Stock held of record or beneficially owned (within the meaning of Rule13d-3
under the Exchange Act) by him except as follows: (i) one thirty-sixth (1/36) of
the Executive's Restricted Shares may be Transferred at any time after January
31, 2006, (ii) an additional one thirty-sixth (1/36) of the Executive's
Restricted Shares may be Transferred at any time following the last day of each
of the next thirty-four (34) calendar month thereafter and (iii) the remainder
of the Executive's Restricted Shares may be Transferred at any time after
December 22, 2008.
(b) Permitted Transfers. Notwithstanding the foregoing, Executive may
transfer any Restricted Stock or securities convertible into or exchangeable or
exercisable for Restricted Stock either during his lifetime or on death (i) by
will or intestacy to his immediate family, (ii) to a trust the beneficiaries of
which are exclusively the Executive and/or a member or members of his immediate
family or (iii) to member's of Executive's immediate family; provided, however,
that prior to any such transfer each transferee shall execute an agreement,
reasonably satisfactory to the Company, pursuant to which each transferee shall
agree to receive and hold such shares of Restricted Stock, or securities
convertible into or exchangeable or exercisable for the Restricted Stock,
subject to the provisions hereof, and there shall be no further transfer except
in accordance with the provisions hereof. For the purposes of this paragraph,
1
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor.
(c) Legend on Certificates. Any certificates evidencing the Restricted
Stock issued prior to the end of the restrictive period described in Section
2(a), above, shall bear the following legend:
"The shares represented by this certificate are subject to an
agreement between the Corporation and the registered holder, a copy of
which is on file at the principal office of this Corporation."
3. Recapitalization. If the outstanding shares of Common Stock are changed
into or exchanged for a different number or kind of shares or other securities
of Interland by reason of any recapitalization, reclassification, stock split,
stock dividend, combination, subdivision or similar transaction, then, subject
to any required action by Interland's shareholders, the number and kind of
Restricted Stock is to be proportionately adjusted; except that no fractional
Common Stock may be issued in making the foregoing adjustments and any decisions
or interpretations to be made by Interland in connection therewith shall be made
by the Board of Directors of Interland or the Compensation Committee of the
Board of Directors, which determinations will be binding and conclusive on
Interland and Executive and any other person entitled to exercise rights under
this Agreement.
4. Rights as Shareholder. Except for the restrictions on Transfer set forth
in Section 2, above, Executive will have all of the rights and privileges of a
shareholder of Interland in respect of all of the Restricted Stock.
5. Withholding of Taxes. Interland's obligation to deliver Restricted Stock
is subject to Executive's satisfaction of any applicable federal, state and
local income and employment tax and withholding requirements in a manner and
form satisfactory to Interland.
6. No Special Employment Rights. No provision in this Agreement will be
deemed to grant to Executive any right with respect to Executive's continued
employment with, or other engagement by, the Company or any subsidiary, parent
or affiliate or interfere in any way with the ability of the Company or any
subsidiary, parent or affiliate at any time to terminate Executive's employment
or other engagement or to increase or decrease Executive's compensation from the
rate in existence at the Grant Date.
7. Representation and Warranty. Executive represents and warrants that
Executive is acquiring the Restricted Stock for Executive's own account for
investment purposes and not with any present intention of selling or otherwise
distributing such shares and that Executive will comply with applicable federal
and state securities laws in connection with any permitted transfer or sale of
such shares.
8. Other Employee Benefits. The amount of any compensation deemed to be
received by Executive as a result of the granting of the Common Shares will not
constitute "earnings" with respect to which any other benefits of Executive are
determined, including, without limitation, benefits under any pension, profit
sharing, life insurance or salary continuation plan.
2
9. Intentionally Reserved. ]
10. Choice of Law. This Agreement is to be governed by the internal law,
and not the laws of conflicts, of the State of Georgia.
11. Successors and Assigns. This Agreement is to bind and inure to the
benefit of and be enforceable by Executive, Interland and their respective
heirs, executors, personal representatives, successors and assigns.
12. Notices. Any notice provided for in this Agreement must be in writing
and is to be either personally delivered, sent by reputable overnight carrier or
mailed by first class mail, return receipt requested, to the recipient at the
address indicated as follows:
Notices to Executive:
Xxxxxxx Xxxxxx
00 Xxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Notices to Interland:
Interland, Inc.
000 Xxxxxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: General Counsel
or any other address or to the attention of any other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered,
sent or mailed.
13. Severability. Whenever possible, each provision of this Agreement is to
be interpreted in a manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any particular
jurisdiction, that invalidity, illegality or unenforceability is not to affect
any other provision or any other jurisdiction, and this Agreement shall be
reformed, construed and enforced in the particular jurisdiction as if the
invalid, illegal or unenforceable provision had never been contained herein.
14. Complete Agreement. This Agreement embodies the complete agreement and
understanding between the parties with respect to the subject matter hereof and
effective as of its date supersedes and preempts any prior understandings,
agreements or representations by or between the parties, written or oral, that
may have related to the subject matter hereof in any way.
15. Amendment and Waiver. Subject to the next sentence, the provisions of
this Agreement may be amended or waived only with the prior written consent of
Interland and Executive, and no course of conduct or failure or delay in
enforcing the provisions of this Agreement is to affect the validity, binding
3
effect or enforceability of this Agreement. Interland unilaterally may waive any
provision of this Agreement in writing to the extent that the waiver does not
adversely affect the interests of Executive under this Agreement, but the waiver
is not to operate as or be construed to be a subsequent waiver of the same
provision or a waiver of any other provision of this Agreement.
[ SIGNATURE PAGE TO FOLLOW ]
4
The parties are signing this Agreement as of the date stated in the
introductory clause.
INTERLAND, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
Name: Xxxxxxxx X. Xxxxxx
Title: Senior VP and General Counsel
/s/ Xxxxxxx Xxxxxx
---------------------------------
Xxxxxxx Xxxxxx
[ Signature Page to Agreement ]
5
