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 (the "Issuance Agreement")
by and between Digital Island, Inc. (the "Corporation") and
______________________________________________________ ("Participant")
evidencing the stock issuance made this day to Participant under the terms of
the Corporation's 1999 Stock Incentive Plan, and such provisions are effective
immediately. All capitalized terms in this Addendum, to the extent not otherwise
defined herein, shall have the meanings assigned to such terms in the Issuance
Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION/CHANGE IN CONTROL
1. To the extent the Repurchase Right is assigned to the successor
corporation (or parent thereof) in connection with a Corporate Transaction, no
accelerated vesting of the Purchased Shares shall occur upon such Corporate
Transaction, and the Repurchase Right shall continue to remain in full force
and effect in accordance with the provisions of the Issuance Agreement. The
Participant shall, over Participant's period of Service following the
Corporate Transaction, continue to vest in the Purchased Shares in one or more
installments in accordance with the provisions of the Issuance Agreement.
2. No accelerated vesting of the Purchased Shares shall occur upon a
Change in Control, and the Repurchase Right shall continue to remain in full
force and effect in accordance with the provisions of the Issuance Agreement
and shall be assigned to any successor entity in the Change in Control
transaction. The Participant shall, over Participant's period of Service
following the Change in Control, continue to vest in the Purchased Shares in
one or more installments in accordance with the provisions of the Issuance
Agreement.
3. If the Corporate Transaction or Change in Control is effected more
than twelve (12) months after the commencement date of Participant's Service,
than immediately upon an Involuntary Termination of Participant's Service
within eighteen (18) months following that Corporate Transaction or Change in
Control, the Repurchase Right shall terminate automatically, and all the
Purchased Shares shall vest in full at that time. Any unvested cash escrow
maintained on the Participant's behalf pursuant to Paragraph C.5 of the
Issuance Agreement shall also vest at the time of such Involuntary Termination
and shall be paid to the Participant promptly thereafter.
4. For purposes of this Addendum, the following definitions shall be in
effect:
An Involuntary Termination shall mean the termination of Participant's
Service by reason of:
(i) Participant's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Participant's voluntary resignation within ninety (90) days
following (A) a change in Participant's position with the Corporation (or
Parent or Subsidiary employing Participant) which materially reduces
Participant's duties and responsibilities or the level of management to
which Participant reports, (B) a reduction in Participant's level of
compensation (including base salary, fringe benefits and target bonus
under any corporate performance based bonus or incentive programs) by
more than fifteen percent (15%) or (C) a relocation of Participant's
place of employment by more than fifty (50) miles, provided and only if
such change, reduction or relocation is effected by the Corporation
without Participant's consent.
A Change in Control shall be deemed to occur in the event of a change
in ownership or control of the Corporation effected through either of the
following transactions:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended)
of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the Corporation's
stockholders, or
(ii) a change in the composition of the Board over a period of thirty-
six (36) consecutive months or less such that a majority of the Board
members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been
elected or nominated for election as Board members during such period by
at least a majority of the Board members described in clause (A) who were
still in office at the time the Board approved such election or
nomination.
Misconduct shall mean the commission of any act of fraud, embezzlement
or dishonesty by the Participant, any unauthorized use or disclosure by the
Participant of confidential information or trade secrets of the Corporation (or
any Parent or Subsidiary), or any other intentional misconduct by the
Participant adversely affecting the business or affairs of the Corporation (or
any Parent or Subsidiary) in a material manner. The foregoing definition shall
not be deemed to be inclusive of all the acts or omissions which the Corporation
(or any Parent or Subsidiary) may consider as grounds for the dismissal or
discharge of the Participant or other person in the Service of the Corporation
(or any Parent or Subsidiary).
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IN WITNESS WHEREOF, Digital Island, Inc. has caused this Addendum to
be executed by its duly-authorized officer, effective as of the Effective Date
specified below.
DIGITAL ISLAND, INC.
By:
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Title:
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EFFECTIVE DATE:
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