Exhibit 99.7
ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Issuance Agreement dated
_______________________, 199__ (the "Issuance Agreement") by and between
DoubleClick, Inc. (the "Corporation") and __________________________________
("Participant") evidencing the stock issuance (the "Issuance") on such date
to Participant under the terms of the Corporation's 1997 Stock Incentive Plan
(the "Plan"), and such provisions shall be effective immediately. All
capitalized terms used in this Addendum, to the extent not otherwise
specifically defined herein, shall have the meanings assigned to such terms
in the Issuance Agreement.
PART ONE: VESTING ACCELERATION UPON CHANGE IN CONTROL
To the extent the Repurchase Right is assigned to the
successor entity (or parent company) in connection with a Change in Control,
the Repurchase Right shall terminate automatically with respect to the
Purchased Shares in an amount equal to the sum of (i) the number of Purchased
Shares that would have become vested during the twelve (12)-month period
following the Change in Control in accordance with the Vesting Schedule
indicated in the Issuance Agreement if the Participant had remained in
Service through that date. No such termination of the Repurchase Right shall
occur, however, to the extent the acceleration of the vesting of the
Purchased Shares would, when added to the present value of certain other
payments in the nature of compensation which become due and payable to
Participant in connection with the Change in Control, result in the payment
to Participant of an excess parachute payment under Code Section 280G(b).
The determination of any such excess parachute payment shall be made by the
Plan Administrator in accordance with the guidelines set forth in Part Two of
this Addendum, and such determination shall be final, binding and conclusive.
PART TWO: DETERMINATION OF SECTION 280G LIMITATION
A. The following definitional provisions are to be utilized in
making all determinations and calculations with respect to any parachute
payments to which Participant may be entitled in connection with a Change in
Control:
ACTUAL AVERAGE COMPENSATION means Participant's average W-2 wages
and other compensation received from the Corporation for the five (5)
calendar years (or such fewer number of actual calendar years of employment
with the Corporation) completed immediately prior to the calendar year in
which the Change in Control is effected. Any W-2 wages or other compensation
for a partial year of employment with the Corporation shall be annualized, in
accordance with the frequency with which such wages are paid during such
partial year, before inclusion within Actual Average Compensation. Should
Participant's Service with the Corporation commence in the calendar year in
which the Change in Control is effected, then
Actual Average Compensation shall be equal in amount to the rate of base
salary in effect for the Participant for that year plus all other items of
compensation received from the Corporation for such year. If any of
Participant's compensation from the Corporation during such five (5)-year or
shorter period was not included in Participant's W-2 wages for U.S. income
tax purposes, either because Participant was not a U.S. citizen or resident
or because such compensation was excludible from income as foreign earned
income under Code Section 911 or as pre-tax income under Code Section 125 or
402(g), then such compensation shall nevertheless be included in Actual
Average Compensation to the same extent as if it were part of Participant's
W-2 wages.
CODE means the Internal Revenue Code of 1986, as periodically amended.
FAIR MARKET VALUE means, with respect to any shares of Common
Stock, the closing selling price per share of Common Stock on the date in
question on the Nasdaq National Market, as such price is reported on the
Nasdaq National Market or any successor system. If there is no such reported
price on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.
ISSUANCE means any Purchased Shares held by the Participant under
the Corporation's 1997 Stock Incentive Plan (the "1997 Plan") or the
Corporation's predecessor 1997 Stock Option Plan (the "Predecessor Plan") and
unvested at the time of the Change in Control. Such Issuances are to be
divided into two separate categories as follows:
- RESTRICTED ISSUANCES: unvested Purchased Shares subject
to the Issuance Agreement and any other Issuance of which the
acceleration of the vesting of such shares is limited, pursuant to the
express provisions of the instrument evidencing the issuance, to an
amount which will not result in an excess parachute payment under Code
Section 280G and the Treasury Regulations issued thereunder.
- UNRESTRICTED ISSUANCES: any unvested Purchased Shares of
which the acceleration of the vesting of those shares is not subject to
any limitations under the instrument of issuance which is designed to
avoid an excess parachute payment under Code Section 280G and the
Treasury Regulations issued thereunder.
ISSUANCE PARACHUTE PAYMENT means, with respect to each Issuance
which is accelerated under either the 1997 Plan or the Predecessor Plan upon
the Change in Control, the portion of that Issuance deemed to be a parachute
payment under Code Section 280G and the Treasury Regulations issued
thereunder. The portion of such Issuance which is categorized as an Issuance
Parachute Payment shall be calculated in accordance with the valuation
provisions established under Code Section 280G and the applicable Treasury
Regulations and shall include an appropriate dollar adjustment to reflect the
lapse of Participant's obligation to remain in Service as a condition to
vesting of the Purchased Shares subject to the accelerated installment.
2.
In no event, however, shall the Issuance Parachute Payment attributable to
any Issuance exceed the spread of the Issuance (the excess of the Fair Market
Value of the accelerated shares over the issuance price payable for those
shares).
OTHER PARACHUTE PAYMENTS means any payments in the nature of
compensation (other than the vesting acceleration of the Purchased Shares
under the Plan) to which Participant may become entitled in connection with
the Change in Control, whether payable at that time or upon Participant's
subsequent termination of Employee status, and which accordingly qualify as
parachute payments within the meaning of Code Section 280G(b)(2) and the
Treasury Regulations issued thereunder.
PRESENT VALUE means the value, determined as of the effective date
of the Change in Control, of any payment in the nature of compensation which
Participant becomes entitled to receive from the Corporation in connection
therewith, including (without limitation) the Issuance Parachute Payment
attributable to the Issuance evidenced by this Issuance Agreement and the
aggregate Issuance Parachute Payment attributable to all other Issuances of
Participant which accelerate upon the Change in Control. The Present Value
of any such payment which is not otherwise due and payable at the time of the
Change in Control shall be determined in accordance with the provisions of
Code Section 280G(d)(4), utilizing a discount rate equal to one hundred
twenty percent (120%) of the applicable Federal rate in effect at the time of
such determination, compounded semi-annually to the effective date of the
Change in Control.
PURCHASED SHARES shall mean the shares purchased by the Participant
pursuant to each Issuance under the Plan.
SEVERANCE PAYMENT means the lump-sum cash payment to which
Participant may become entitled, pursuant to separate letter agreement with
the Corporation, upon the involuntary termination of his or her Employee
status within eighteen (18) months following certain changes in control of
the Corporation.
B. The extent to which the Issuance evidenced by this Issuance
Agreement and all other Restricted Issuances are to accelerate upon the
Change in Control shall be determined as follows:
FIRST, there is to be determined the Issuance Parachute
Payment attributable to each Unrestricted Issuance (or installment
thereof) which accelerates upon the Change in Control,
THEN, there is to be determined the Issuance Parachute Payment
attributable to each Restricted Issuance (or installment thereof) which
is subject to acceleration upon the Change in Control.
3.
To the extent the aggregate Issuance Parachute Payment
calculated for the Unrestricted Issuances does not exceed 2.99 times
Participant's Actual Average Compensation, then the Restricted Issuances
shall be accelerated until the Issuance Parachute Payments attributable to
such Restricted Issuances, when added to the aggregate Issuance Parachute
Payment attributable to the Unrestricted Issuances, equal 2.99 times
Participant's Actual Average Compensation.
C. If the aggregate Issuance Parachute Payment attributable to
the Restricted Issuances which would otherwise accelerate upon the Change in
Control would, when added to the aggregate Issuance Parachute Payment
attributable to the accelerated Unrestricted Issuances, exceed 2.99 times
Participant's Actual Average Compensation, then the Restricted Issuances will
be accelerated in the order of their share spread (the Fair Market Value of
the unvested Purchased Shares at the time of the Change in Control less the
stock issuance price payable for those shares), with the Restricted Issuances
with the highest share spread to be the first to be accelerated, until the
aggregate Issuance Parachute Payment attributable to the Restricted Issuances
(or installments thereof) so accelerated equals the difference between (i)
2.99 times Participant's Actual Average Compensation and (ii) the aggregate
Issuance Parachute Payment attributable to the Unrestricted Issuances.
D. Accordingly, except as otherwise provided under Paragraph F.
below, neither the Issuance evidenced by this Issuance Agreement nor any
other Restricted Issuance is to accelerate upon the Change in Control if and
to the extent the Issuance Parachute Payments attributable to the
installments thereof which would otherwise accelerate upon such Change in
Control would, when added to the Issuance Parachute Payments attributable to
the Unrestricted Issuances which accelerate upon such Change in Control,
exceed in amount 2.99 times Participant's Actual Average Compensation.
E. In the event there is any dispute with Participant as to
whether one or more payments to which Participant may become entitled in
connection with the Change in Control constitute Issuance Parachute Payments
or Other Parachute Payments, such dispute shall be resolved as follows:
- In the event temporary, proposed or final Treasury
Regulations in effect at the time under Code Section 280G (or applicable
judicial decisions) specifically address the status of any such payment
or the method of valuation therefor, the characterization afforded to
such payment by the Regulations (or such decisions) shall, together with
the applicable valuation methodology, be controlling.
- In the event the Regulations (or applicable judicial
decisions) do not address the status of any payment in dispute, the
matter shall be submitted for resolution to independent counsel mutually
acceptable to the Corporation and Participant ("Independent Counsel").
The resolution reached by Independent
4.
Counsel shall be final and controlling; PROVIDED, however, that if in
the judgment of Independent Counsel the status of the payment in dispute
can be resolved through the obtainment of a private letter ruling from
the Internal Revenue Service, a formal and proper request for such
ruling shall be prepared and submitted by Independent Counsel, and the
determination made by the Internal Revenue Service in the issued ruling
shall be controlling. All expenses incurred in connection with the
retention of Independent Counsel and (if applicable) the preparation and
submission of the ruling request shall be shared equally by the
Corporation and Participant.
- In the event the Regulations (or applicable judicial
decisions) do not address the appropriate valuation methodology for any
payment in dispute, the value thereof shall, at the Independent
Counsel's election, be determined through an independent third-party
appraisal, and the expenses incurred in obtaining such appraisal shall
be shared equally by the Corporation and Participant.
F. Notwithstanding any provision to the contrary set forth in the
preceding paragraphs, the aggregate Issuance Parachute Payment attributable
to the Issuances accelerated upon the Change in Control shall not be reduced
below that amount (if any) which, when added to the Present Value of all the
Other Parachute Payments to which Participant becomes entitled in connection
with such Change in Control, would nevertheless qualify as reasonable
compensation within the standards established under Code Section 280G(b)(4).
G. Participant shall not be entitled to any Severance Payment in
the event that the aggregate Issuance Parachute Payment attributable to all
Restricted and Unrestricted Issuances which accelerate upon the Change in
Control equals or exceeds 2.99 times Participant's Actual Average
Compensation.
H. These guidelines shall in all events be interpreted in such
manner as shall avoid the imposition of excise taxes under Code Section 4999
and the disallowance of deductions under Code Section 280G(a) with respect to
the acceleration of Participant's Restricted Issuances in connection with the
Change in Control.
I. Not withstanding the existence of one or more payments in
dispute under Paragraph E. above and subject to the terms of the Issuance
Agreement, Participant shall have the right to direct the sale of Purchased
Shares under a Restricted Issuance, provided the sale proceeds are
immediately deposited in escrow.
J. Once the requisite determinations under Paragraph E. have been
made, then to the extent the aggregate Issuance Parachute Payment
attributable to the Restricted Issuances which would otherwise accelerate
upon the Change in Control would, when added to the aggregate Issuance
Parachute Payment attributable to the accelerated Unrestricted Issuances,
5.
exceed 2.99 times Participant's Actual Average Compensation or other
applicable limitation under Paragraph F. above, such acceleration shall be
precluded through the disposition of one or more Restricted Issuances as
follows:
FIRST, any unvested Purchased Shares subject to Restricted
Issuances shall immediately be cancelled. If there is more than one
such Restricted Issuance outstanding, then the cancellation of the
unvested Purchased Shares subject to Issuances shall occur in the
following order: the unvested Purchased Shares subject to the Restricted
Issuances with the lowest share spread shall be the first to be
cancelled.
THEN, the sales of unvested Purchased Shares subject to one or
more Restricted Issuances (or installments thereof) shall be rescinded
(with the Restricted Issuances with the lowest share spread to be the
first to be rescinded) by refunding to the Participant the share price
paid for the Purchased Shares and returning those shares (plus an cash
dividends paid thereon in connection with the Change in Control) to the
Corporation. To the extent the sales of unvested Purchased Shares (or
accelerated installments thereof) shall have been sold and the proceeds
are held in escrow, the sale proceeds attributable to those shares shall
be allocated as follows: first an amount not to exceed the share price
paid for such shares shall be refunded to Participant, and then the
balance of the proceeds (together with any cash dividends paid on those
shares in connection with the Change in Control) shall be returned to
the Corporation.
K. To the extent any cash proceeds remain in the escrow account
after the reductions specified in Paragraph J. above have been made, those
proceeds shall be promptly distributed to Participant.
6.
IN WITNESS WHEREOF, DoubleClick, Inc. has caused this Addendum to
be executed by its duly-authorized officer, and Participant has executed this
Addendum, all as of the Effective Date specified below.
DOUBLECLICK, INC.
By ________________________________________
Title _____________________________________
___________________________________________
PARTICIPANT
EFFECTIVE DATE: ______________________, 199_
7.
