EXHIBIT 10.18

 

[DIRECTORS]

 

NOTICE

 

This Restricted Stock Award Agreement (“Agreement”) will be valid only if the
Grantee executes and delivers this Agreement and the attached Stock Power of
Attorney to Internet Security Systems, Inc., Attn:                            ,
on or before                       , 20    .

 

RESTRICTED STOCK AWARD AGREEMENT

under the

INTERNET SECURITY SYSTEMS, INC.

2005 STOCK INCENTIVE PLAN

 

THIS AGREEMENT, made and entered into as of the          day of         ,
20    , by and between Internet Security Systems, Inc. (“the “Company”) and
                       (“Grantee”).

 

WITNESSETH THAT:

 

WHEREAS, the Company maintains the Internet Security Systems, Inc. 2005 Stock
Incentive Plan (the “Plan”), and the Grantee has been selected by the Committee
to receive a Restricted Stock Award under the Plan;

 

NOW, THEREFORE, IT IS AGREED, by and between the Company and the Grantee, as
follows:

 

1.             AWARD OF RESTRICTED STOCK

 

1.1           THE COMPANY HEREBY GRANTS TO THE GRANTEE AN AWARD OF
                         (              ) SHARES OF RESTRICTED STOCK
(“RESTRICTED STOCK”), SUBJECT TO, AND IN ACCORDANCE WITH, THE RESTRICTIONS,
TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT.  THE GRANT DATE OF THIS AWARD
OF RESTRICTED STOCK IS                , 20     (“GRANT DATE”).

 

1.2           THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE AND CONSISTENT
WITH, AND SUBJECT TO, THE PROVISIONS OF THE PLAN (THE PROVISIONS OF WHICH ARE
INCORPORATED HEREIN BY REFERENCE) AND, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
HEREIN, THE CAPITALIZED TERMS USED IN THIS AGREEMENT SHALL HAVE THE SAME
DEFINITIONS AS SET FORTH IN THE PLAN.

 

2.             RESTRICTIONS

 

2.1           SUBJECT TO SECTIONS 2.2, 2.3, AND 2.4 BELOW, IF THE GRANTEE
CONTINUES TO PERFORM SERVICES AS A DIRECTOR FOR THE COMPANY OR A SUBSIDIARY, THE
GRANTEE SHALL BECOME VESTED IN THE RESTRICTED STOCK OVER THE         -YEAR
PERIOD FROM THE GRANT DATE, AS FOLLOWS:  [         OF THE SHARES OF RESTRICTED
STOCK SHALL VEST AT THE END OF EACH                              BEGINNING
                         AFTER

 

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THE GRANT DATE] [           OF THE SHARES OF RESTRICTED STOCK SHALL VEST ON
                                ,            OF THE SHARES OF RESTRICTED STOCK
SHALL VEST ON                                 , AND             OF THE SHARES OF
RESTRICTED STOCK SHALL VEST ON                                 ] (EACH SUCH DATE
SHALL BE A “VESTING DATE”) SUCH THAT ON                , 20     (THE “FINAL
VESTING DATE”) ALL OF THE SHARES OF RESTRICTED STOCK SHALL BE FULLY VESTED.  ON
EACH VESTING DATE, GRANTEE SHALL OWN THE VESTED SHARES OF RESTRICTED STOCK FREE
AND CLEAR OF ALL RESTRICTIONS IMPOSED BY THIS AGREEMENT (EXCEPT THOSE IMPOSED BY
SECTION 3.4 BELOW).  FOR PURPOSES OF THIS AGREEMENT, PERFORMANCE OF SERVICES AS
A DIRECTOR FOR ANY SUBSIDIARY OF THE COMPANY, OR SERVICE AS AN EMPLOYEE OF THE
COMPANY OR ANY SUBSIDIARY OF THE COMPANY, SHALL BE CONSIDERED PERFORMING SERVICE
AS A DIRECTOR FOR THE COMPANY, AND REFERENCES TO PERFORMING SERVICES AS A
DIRECTOR FOR THE COMPANY OR TERMINATION OF SERVICES FOR OR WITH THE COMPANY,
SHALL INCLUDE SERVICES AS AN EMPLOYEE OF THE COMPANY OR A SUBSIDIARY.

 

2.2           IN THE EVENT PRIOR TO THE VESTING DATE, GRANTEE DIES WHILE
PERFORMING SERVICES AS A DIRECTOR OF THE COMPANY, GRANTEE’S SERVICE AS A
DIRECTOR IS TERMINATED BY REASON OF DISABILITY OR GRANTEE’S RETIREMENT, THE
UNVESTED SHARES OF RESTRICTED STOCK SHALL BECOME FULLY VESTED AND
NON-FORFEITABLE AS OF THE DATE OF GRANTEE’S DEATH, DISABILITY OR RETIREMENT. 
THE COMPANY SHALL TRANSFER VESTED SHARES OF RESTRICTED STOCK, FREE AND CLEAR OF
ANY RESTRICTIONS IMPOSED BY THIS AGREEMENT (EXCEPT FOR SECTION 3.4) TO GRANTEE
OR, IF APPLICABLE, TO GRANTEE’S SURVIVING SPOUSE OR, IF NONE, TO HIS ESTATE, AS
SOON AS PRACTICAL AFTER HIS OR HER DATE OF DEATH, DISABILITY OR RETIREMENT.

 

2.3           EXCEPT FOR DEATH, DISABILITY OR RETIREMENT AS PROVIDED IN SECTION
2.2, A CHANGE IN CONTROL AS PROVIDED IN SECTION 2.4, OR UNLESS THE COMMITTEE IN
ITS SOLE DISCRETION DETERMINES OTHERWISE WITH RESPECT TO ALL OR ANY PORTION OF
THE SHARES OF RESTRICTED STOCK, IF GRANTEE’S SERVICE AS A DIRECTOR TERMINATES
PRIOR TO THE VESTING DATE, ALL UNVESTED SHARES OF RESTRICTED STOCK SHALL BE
IMMEDIATELY FORFEITED.

 

2.4           NOTWITHSTANDING THE OTHER PROVISIONS OF THIS AGREEMENT, IN THE
EVENT OF A CHANGE IN CONTROL PRIOR TO GRANTEE’S FINAL VESTING DATE, THE UNVESTED
SHARES OF RESTRICTED STOCK SHALL BECOME FULLY VESTED AND NONFORFEITABLE AS OF
THE DATE OF THE CHANGE IN CONTROL.  ON THE DATE OF THE CHANGE IN CONTROL, THE
COMPANY SHALL DELIVER TO GRANTEE A CERTIFICATE(S) FOR SUCH RESTRICTED STOCK,
FREE AND CLEAR OF ANY RESTRICTIONS IMPOSED BY THIS AGREEMENT.

 

2.5           EXCEPT FOR A PERMITTED TRANSFER, THE RESTRICTED STOCK MAY NOT BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE ENCUMBERED PRIOR TO THE DATE
GRANTEE BECOMES VESTED IN THE RESTRICTED STOCK.  FOR PURPOSES OF THIS AGREEMENT,
A PERMITTED TRANSFER MEANS (I) A GRATUITOUS TRANSFER OF THE RESTRICTED STOCK,
PROVIDED AND ONLY IF GRANTEE OBTAINS THE COMPANY’S PRIOR WRITTEN CONSENT TO SUCH
TRANSFER, (II) A TRANSFER OF TITLE TO THE RESTRICTED STOCK EFFECTED PURSUANT TO
GRANTEE’S WILL OR THE LAWS OF INTERSTATE SUCCESSION FOLLOWING GRANTEE’S DEATH
OR, (III) A TRANSFER TO THE COMPANY IN PLEDGE AS SECURITY FOR ANY PURCHASE-MONEY
INDEBTEDNESS INCURRED BY GRANTEE IN CONNECTION WITH THE ACQUISITION OF THE
RESTRICTED STOCK.

 

3.             STOCK; DIVIDENDS; VOTING

 

3.1           UPON DELIVERY TO THE COMPANY OF THE EXECUTED STOCK POWERS ATTACHED
HERETO, THE COMPANY SHALL REGISTER ON THE COMPANY BOOKS STOCK CERTIFICATE(S)
EVIDENCING THE SHARES OF RESTRICTED STOCK IN THE NAME OF THE GRANTEE.  PHYSICAL
POSSESSION OR CUSTODY OF SUCH STOCK

 

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CERTIFICATE(S) SHALL BE RETAINED BY THE COMPANY UNTIL SUCH TIME AS THE SHARES OF
RESTRICTED STOCK ARE FULLY VESTED IN ACCORDANCE WITH SECTION 2.  WHILE IN ITS
POSSESSION, THE COMPANY RESERVES THE RIGHT TO PLACE A LEGEND ON THE STOCK
CERTIFICATE(S) RESTRICTING THE TRANSFERABILITY OF SUCH CERTIFICATES AND
REFERRING TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THIS AGREEMENT
AND THE PLAN.  UPON FORFEITURE OF ALL OR A PORTION OF THE SHARES OF RESTRICTED
STOCK, THE STOCK CERTIFICATE(S) HELD ON BEHALF OF THE GRANTEE FOR SUCH FORFEITED
RESTRICTED STOCK SHALL BE TRANSFERRED TO THE COMPANY PURSUANT TO THE EXECUTED
STOCK POWER DESCRIBED ABOVE.

 

3.2           DURING THE PERIOD THE RESTRICTED STOCK IS NOT VESTED (AND HAS NOT
BEEN FORFEITED), THE GRANTEE SHALL BE ENTITLED TO RECEIVE DIVIDENDS AND/OR OTHER
DISTRIBUTIONS DECLARED ON SUCH RESTRICTED STOCK AND GRANTEE SHALL BE ENTITLED TO
VOTE SUCH RESTRICTED STOCK.

 

3.3           IN THE EVENT OF A CHANGE IN CAPITALIZATION, THE NUMBER AND CLASS
OF SHARES OF RESTRICTED STOCK OR OTHER SECURITIES THAT GRANTEE SHALL BE ENTITLED
TO, AND SHALL HOLD, PURSUANT TO THIS AGREEMENT SHALL BE APPROPRIATELY ADJUSTED
OR CHANGED TO REFLECT THE CHANGE IN CAPITALIZATION, PROVIDED THAT ANY SUCH
ADDITIONAL SHARES OF RESTRICTED STOCK OR ADDITIONAL OR DIFFERENT SHARES OR
SECURITIES SHALL REMAIN SUBJECT TO THE RESTRICTIONS IN THIS AGREEMENT.  IF
ADDITIONAL SHARES OF COMMON STOCK OF THE COMPANY OR ANOTHER CORPORATION, OR
OTHER CONSIDERATION IS ISSUED IN CONNECTION WITH THE RESTRICTED STOCK AT A TIME
AT WHICH THE RESTRICTIONS SPECIFIED IN THIS AGREEMENT HAVE NOT LAPSED, THE
GRANTEE SHALL EXECUTE AND DELIVER TO THE COMMITTEE ADDITIONAL STOCK POWER(S)
WITH RESPECT TO ANY SUCH SHARES OF STOCK, DELIVER TO THE COMMITTEE THE STOCK
CERTIFICATES REPRESENTING SUCH SHARES, AND FORWARD TO THE COMMITTEE ANY SUCH
OTHER CONSIDERATION.  SUCH STOCK CERTIFICATES AND/OR OTHER CONSIDERATION SHALL
BE RETAINED BY THE COMPANY AND SHALL BE CREDITED TO THE ACCOUNT OF THE GRANTEE
AND SHALL BE DISTRIBUTED TO THE GRANTEE, SUBJECT TO FORFEITURE AND THE OTHER
TERMS AND CONDITIONS OF THIS AGREEMENT AND THE PLAN, AT THE SAME TIME AS THE
SHARES OF RESTRICTED STOCK ARE TO BE DISTRIBUTED FREE OF ALL RESTRICTIONS.

 

3.4           THE GRANTEE REPRESENTS AND WARRANTS THAT HE IS ACQUIRING THE
RESTRICTED STOCK FOR INVESTMENT PURPOSES ONLY, AND NOT WITH A VIEW TO
DISTRIBUTION THEREOF.  THE GRANTEE IS AWARE THAT THE RESTRICTED STOCK MAY NOT BE
REGISTERED UNDER THE FEDERAL OR ANY STATE SECURITIES LAWS AND THAT, IN ADDITION
TO THE OTHER RESTRICTIONS ON THE RESTRICTED STOCK, THE SHARES WILL NOT BE ABLE
TO BE TRANSFERRED UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.  BY MAKING
THIS AWARD OF RESTRICTED STOCK, THE COMPANY IS NOT UNDERTAKING ANY OBLIGATION TO
REGISTER THE RESTRICTED STOCK UNDER ANY FEDERAL OR STATE SECURITIES LAWS.

 

4.             NO RIGHT TO CONTINUED SERVICE

 

Nothing in this Agreement or the Plan shall be interpreted or construed to
confer upon the Grantee any right with respect to continuance of performance of
services as a director for the Company or a Subsidiary, nor shall this Agreement
or the Plan interfere in any way with the right of the Company or a Subsidiary
to terminate the Grantee’s service as a director at any time, subject to
Grantee’s rights under this Agreement.

 

5.             TAXES AND WITHHOLDING

 

The Grantee shall be responsible for all federal, state and local income taxes
payable with respect to this award of Restricted Stock and any employment taxes
payable by Grantee.  The

 

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Grantee shall have the right to make such elections under the Internal Revenue
Code of 1986, as amended, as are available in connection with this award of
Restricted Stock, including a Section 83(b) election, provided, however, that
Grantee acknowledges and agrees that it is Grantee’s responsibility, and not the
Company’s, to prepare and timely file any election under Section 83(b) (even if
Grantee requests the Company to do such filing).  The Company and Grantee agree
to report the value of the Restricted Stock in a consistent manner for federal
income tax purposes.  The Company shall have the right to retain and withhold
from any payment of Restricted Stock the amount of taxes required by any
government to be withheld or otherwise deducted and paid with respect to such
payment.  The Company may require Grantee to reimburse the Company for any such
taxes required to be withheld and may withhold any distribution in whole or in
part until the Company is so reimbursed.  In lieu thereof, the Company shall
have the right to withhold from any other cash amounts due to Grantee an amount
equal to such taxes required to be withheld or withhold and cancel (in whole or
in part) a number of shares of Restricted Stock having a market value not less
than the amount of such taxes.

 

6.             GRANTEE BOUND BY THE PLAN

 

The Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof.

 

7.             MODIFICATION OF AGREEMENT

 

This Agreement may be modified, amended, suspended or terminated, and any terms
or conditions may be waived, but only by a written instrument executed by the
parties hereto.

 

8.             SEVERABILITY

 

Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.

 

9.             GOVERNING LAW

 

The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Delaware without giving effect to
the conflicts of laws principles thereof.

 

10.          SUCCESSORS IN INTEREST

 

This Agreement shall inure to the benefit of, and be binding upon, the Company
and its successors and assigns, and upon any person acquiring, whether by
merger, consolidation, reorganization, purchase of stock or assets, or
otherwise, all or substantially all of the Company’s assets and business.  This
Agreement shall inure to the benefit of the Grantee’s legal representatives. 
All obligations imposed upon the Grantee and all rights granted to the Company
under this Agreement shall be final, binding and conclusive upon the Grantee’s
heirs, executors, administrators and successors.

 

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11.          RESOLUTION OF DISPUTES

 

Any dispute or disagreement which may arise under, or as a result of, or in any
way relate to the interpretation, construction or application of this Agreement
shall be determined by the Committee.  Any determination made hereunder shall be
final, binding and conclusive on the Grantee and the Company for all purposes.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

 

 

INTERNET SECURITY SYSTEMS, INC.

 

 

 

 

 

By:

 

 

 

 

 

 

 

GRANTEE:

 

 

 

 

 

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STOCK POWER

 

FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
                                                                         
                                                               (          )
shares of the common stock of Internet Security Systems, Inc. (the “Company”)
registered on the books of the Company in the name of the undersigned (whether a
certificate has been issued or not), and does hereby irrevocably constitute and
appoint                                                                   
attorney to transfer said stock on the books of the Company, with full power of
substitution in the premises.

 

 

DATED:

 

 

 

 

 

 

 

 

 

 

Name:

 

 

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