EXHIBIT 10.12
 
DILIGENT BOARD MEMBER SERVICES, INC.
2007 STOCK OPTION AND INCENTIVE PLAN

Stock Option Agreement
 
1.           Grant of Option.  Diligent Board Member Services, Inc., a Delaware
corporation (the “Company”), hereby grants as of October 9, 2009 (the “Grant
Date”) to the Optionee named in the Certificate of Stock Option Grant attached
as Exhibit A (the “Certificate”), an option to purchase (the “Option”) the total
number of shares subject to the Option (the “Shares”) set forth in the
Certificate at the Grant Price per share set forth in the Certificate subject to
the terms and provisions of this Stock Option Agreement (the “Agreement”) and of
the Certificate and the Diligent Board Member Services, Inc. 2007 Stock Option
and Incentive Plan (the “Plan”), which are incorporated herein by reference.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Agreement.  By accepting the Option, the Optionee
(and any person to whom the Option is transferred) acknowledges that the Plan
has been made available to him or her.
 
If designated in the Certificate as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Code Section 422.
Nevertheless, to the extent the Option causes the aggregate fair market value of
stock with respect to which incentive stock options are exercisable for the
first time by the Optionee to exceed $100,000 (such value to be determined as of
the Grant Date and such determination to be made in accordance with the rule
described in Code Section 422(d) and as provided in Paragraph (C) of Article V
of the Plan), then the Option shall be treated as a Non-Qualified Stock Option
with respect to the Shares whose value exceeds such $100,000 limit.]  If
designated in the Certificate as a Non-Qualified Stock Option, the Option is not
intended to qualify as an Incentive Stock Option under Code Section 422.
 
The Company seeks to provide a means by which the Company, through the grant of
the Option to the Optionee, may retain the Optionee’s services and motivate the
Optionee to exert his or her best efforts on behalf of the Company and any
Affiliate.
 
2.           Terms and Conditions.
 
(a)    Grant Expiration Date.  The Option shall expire on the Grant Expiration
Date set forth in the Certificate (hereinafter the “Grant Expiration
Date”).  The Optionee is responsible for taking any and all actions as may be
required to exercise the Option in a timely manner, and for properly executing
any documents as may be required for the exercise of the Option in accordance
with such rules and procedures established from time to time under the
Plan.  The Company has no duty to notify the Optionee (or any person to whom the
Option is transferred) of the expiration of the Option.  By accepting the
Option, the Optionee (and any person to whom the Option is transferred)
acknowledges that the information regarding the procedures and requirements for
the exercise of the Option has been made available to him or her.
 

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(b)    Exercise of Option During Continuous Employment.  Subject to the
provisions of this Agreement, the Option may be exercised by the Optionee in
installments as provided in the Certificate, rounded to the next lowest integer
in the case of any fractional share.
 
When the right to exercise any installment accrues, the Shares included in that
installment may be purchased at that time.  To the extent not exercised, an
installment shall accumulate and be exercisable, in whole or in part, in any
subsequent period but not later than the Grant Expiration Date.
 
An exercise of any part of the Option shall be accompanied by a written notice
to the Company as provided in Section 5 of this Agreement and specifying the
number of Shares as to which the Option is being exercised.  Such notice must be
received prior to the Grant Expiration Date.
 
(c)    Exercise Upon Termination of Employment.
 
Death.  In the event that the Optionee’s Continuous Status as an Employee
terminates due to his or her death, the Option may be exercised by the
Optionee’s estate or by any other person who acquired the Option by reason of
the death of the Optionee within the 12 months immediately following his or her
death and to the extent that the Optionee was entitled to exercise the Option at
the date of his or her death; provided, however, that the Option may not be
exercised after the Grant Expiration Date.
 
Disability.  If the Optionee’s Continuous Status as an Employee terminates due
to his or her disability (as defined in Code Section 22(e)(3)), the Option may
be exercised by the Optionee within the 12 months immediately following such
termination and to the extent that the Optionee was entitled to exercise the
Option at the date of his or her termination due to his or her disability;
provided, however, that the Option may not be exercised after the Grant
Expiration Date.
 
Other Termination of Relationship.  If the Optionee’s Continuous Status as an
Employee terminates other than by death or due to disability or other than
involuntarily for cause, the Optionee’s right to exercise the Option may be
exercised within the three month period immediately following such termination
and to the extent that the Optionee was entitled to exercise the Option at the
date of his or her termination; provided, however, that the Option may not be
exercised after the Grant Expiration Date.
 
If the Optionee’s Continuous Status as an Employee is involuntarily terminated
for cause, the Optionee’s right to exercise the Option shall immediately
terminate and any then unexercised portion of the Option shall be immediately
canceled.
 
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For purposes of this Agreement, the term “cause” shall mean, with respect to any
Optionee, (a) cause as defined in the employment agreement with the Company or
any subsidiary thereof to which the Optionee is a party or, if none, (b) the
occurrence of any of the following events:
 
(i)           the willful and continued failure by the Optionee to substantially
perform his or her duties with the Company or any subsidiary thereof on a
full-time basis (other than any such failure resulting from total or partial
incapacity due to physical or mental illness) after a written demand for
substantial performance is delivered to the Optionee by the Board, which demand
identifies the manner in which the Board believes that he or she has not
substantially performed such duties;
 
(ii)           the willful engaging by the Optionee in conduct which is
significantly injurious to the Company or to any subsidiary of the Company,
monetarily or otherwise, after a written demand for cessation of such conduct is
delivered to the Optionee by the Board, which demand specifically identifies the
manner in which the Board believes that the Optionee has engaged in such conduct
and the injury to the Company or to a subsidiary of the Company resulting
therefrom;
 
(iii)           the commission by the Optionee of an act or acts constituting a
crime involving moral turpitude;
 
(iv)           the breach by the Optionee of one or more covenants, if any, in
an agreement to which the Optionee and the Company are parties;
 
(v)           violation by the Optionee of Company policy; or
 
(vi)           the commission by the Optionee of a significant act of
dishonesty, deceit or breach of fiduciary duty in the performance of the
Optionee’s duties with the Company or with any subsidiary of the Company.
 
For purposes of clauses (i) and (ii) of this definition, no act, or failure to
act, on the part of an Optionee shall be deemed to be willful unless knowingly
done, or omitted to be done, by the Optionee not in good faith and without a
reasonable belief that such action or omission was in the best interests of the
Company or of a subsidiary of the Company.
 
(d)    Payment of Grant Price Upon Exercise.  At the time of any purchase of
Shares under the Option, the Grant Price for such Shares as set forth in the
Certificate shall be paid by the Optionee in full to the Company.  The Optionee
may pay the Grant Price in whole or in part in cash or by check made payable to
the Company and/or the Optionee may authorize a third party to sell a sufficient
portion of the Shares acquired upon the exercise of the Option and remit to the
Company the portion of the sale proceeds sufficient to pay the Grant Price and
any tax withholding resulting from such exercise that is not paid by the
Optionee in cash or by check.  No exercise shall be effective unless and until
the Optionee has paid the Grant price for the shares and all withholding tax
which is due.
 
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(e)    Sale of Shares.  To the extent this grant is an Incentive Stock Option,
Optionee may not sell the shares resulting from the exercise of such Option
before two years following the Grant Date and one year after exercise of the
Option.  If Optionee does not comply with this requirement, then the favorable
tax treatment for Incentive Stock Options will not apply to such sale.
 
(f)    Nontransferability.  The Option shall not be transferable other than by a
will of the Optionee or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the Optionee only by the Optionee or his
attorney-in-fact or conservator, unless the Option is an Incentive Stock Option
and such exercise by the attorney-in-fact or the conservator of the Optionee
would disqualify the Option as such under Code Section 422. 
 
(g)    Adjustments in Event of Change in Common Stock.  If any change is made in
the Shares subject to the Option, without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Option will be appropriately adjusted in the
class(es) and number of shares and price per share of stock of those subject
Shares in such manner as the Board may deem equitable to prevent substantial
dilution or enlargement of the rights granted to the Optionee; provided,
however, that no such adjustment shall cause the Company to issue a fractional
share under the Option.  Such adjustments shall be final, binding and
conclusive.  (The conversion of any convertible securities of the Company shall
not be treated as a transaction not involving the receipt of consideration by
the Company.) 
 
(h)    No Rights as a Shareholder.  The Optionee shall have no rights as a
shareholder with respect to any Shares subject to the Option prior to the date
of issuance to him or her of a certificate or certificates for such Shares.
 
(i)    No Rights to Continued Relationship.  The Option shall not confer upon
the Optionee any right with respect to continuance of employment by the Company
or by an Affiliate, nor shall it interfere in any way with the right of his or
her employer to terminate his or her employment at any time.
 
The Option shall not confer upon the Optionee any right with respect to
continuance of a directorship of the Company or of an Affiliate, nor shall it
interfere in any way with the right of the shareholders to remove him or her as
a director at any time.
 
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The Option shall not confer upon the Optionee any right with respect to
continuance of any consulting arrangement with the Company or any Affiliate, nor
shall it interfere in any way with the right of the Company or an Affiliate, as
the case may be, to terminate any such arrangement.
 
(j)    Sale of the Company.  In the event of a dissolution, liquidation or sale
of all or substantially all of the assets of the Company, or that the Company is
not the surviving corporation in any merger, consolidation, or reorganization,
then the Option shall be canceled as of the effective date of such transaction;
provided, however, the Board shall give at least 30 days’ prior written notice
of the transaction to the Optionee and during the period beginning with the date
the Optionee receives the notice and ending on the date of the transaction, the
Optionee shall have the right to exercise all or any part of the unexercised
portion of the Option (without regard to employment requirements or any
installment exercise limitations) (the “Accelerated Amount”); provided further
that no part of the Option may be exercised after the Grant Expiration Date.  If
the Option is an Incentive Stock Option, the Accelerated Amount under this
Section shall remain exercisable as an Incentive Stock Option under Code Section
422 only to the extent that the $100,000 dollar limitation of Code Section
422(d) is not exceeded.  To the extent that such dollar limitation is exceeded,
the remaining Accelerated Amount shall be exercisable as a Non-Qualified Stock
Option.
 
(k)    Compliance with Other Laws and Regulations.  The Option and the
obligation of the Company to sell and deliver Shares hereunder, shall be subject
to all applicable federal and state laws, rules, and regulations, and to such
approvals by any government or regulatory agency as may be required.  The
Company shall not be required to issue or deliver any certificates for Shares
prior to the completion of any registration or qualification of such Shares
under any federal or state law, or any rule or regulation of any governmental
body which the Company shall, in its sole discretion, determine to be necessary
or advisable.
 
Optionee must comply with applicable securities laws in both the exercise of the
Stock Options and the sale of the underlying stock.
 
To the extent applicable, it is intended that this Agreement and the Plan comply
with the provisions of Section 409A of the Code.  This Agreement and the Plan
shall be administered in a manner consistent with this intent, and any provision
that would cause this Agreement or the Plan to fail to satisfy Section 409A of
the Code shall have no force or effect until amended to comply with Section 409A
of the Code (which amendment may be retroactive to the extent permitted by
Section 409A of the Code and may be made by the Company without the consent of
the Optionee).
 
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(l)    Withholding Taxes.  The Optionee agrees to make appropriate arrangements
with the Company or Affiliate, as the case may be, for the satisfaction of all
federal, state and local income and employment tax withholding requirements
applicable to the exercise of the Option at the time of such exercise.  No
Shares will be delivered pursuant to the exercise of the Option until the
Optionee, or any other person to whom the Option is transferred, has made
acceptable arrangements for these withholding requirements.
 
3.           Investment Representation.  The Company may require that the
Optionee furnish to the Company, as a condition of exercising or acquiring
Shares underlying the Option, (a) written assurances satisfactory to the
Company, or counsel for the Company, as to the Optionee’s knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company, or counsel for the
Company, who is knowledgeable and experienced in financial and business matters,
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Option; and
(b) written assurances satisfactory to the Company, or counsel for the Company,
stating that the Optionee is acquiring the stock subject to the Option for the
Optionee’s own account and not with any present intention of selling or
otherwise distributing the stock underlying the Option.  The Company may
(a) restrict the transferability of the Shares underlying the Option and require
a legend to be endorsed on the certificates representing such Shares, as
appropriate to reflect resale restrictions, if any, imposed by the Board
pursuant to the Option when granted, or as appropriate to comply with any
applicable state or federal securities laws, rules or regulations; and
(b) condition the exercise of the Option or the issuance and delivery of the
Shares underlying the Option upon the listing, registration or qualification of
such Shares upon a securities exchange or quotation system or under applicable
securities laws.  The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (a) the issuance of Shares upon
the exercise of the Option has been registered under a then currently effective
registration statement under the Securities Act, or (b) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.  The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Option as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.
 
4.           Optionee Bound by the Plan.  The Optionee agrees to be bound by all
the terms and provisions of the Plan.  To the extent that the terms of this
Agreement are inconsistent with the terms of the Plan, the terms of the Plan
shall govern.  The captions used in the Certificate, this Agreement, and the
Plan are inserted for convenience and shall not be deemed a part of the Option
for construction or interpretation.
 
This Agreement, the Certificate, and the Plan shall be construed in accordance
with the laws of the State of Delaware, without regard to the conflict of laws
principles. 
 
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5.           Notices.  Any notice to the Company or the Board that is required
to be made under the terms of the Agreement or under the terms of the Plan shall
be addressed to the Company in care of its president at 39 West 37th Street, 8th
Floor, New York, New York 10018.  Any notice that is required to be made to the
Optionee under the terms of the Agreement or under the terms of the Plan shall
be addressed to him or her at the address indicated in the Certificate unless
the Optionee notifies the Company of his or her address change in writing as
provided in this Section 5 in which case the notice shall be addressed to the
Optionee at his or her new address.  A notice under this Section 5 shall be
deemed to have been given or delivered upon personal delivery or upon deposit in
the United States mail, by registered or certified mail, postage prepaid and
properly addressed as provided in this Section.
 
* * * * *

IN WITNESS WHEREOF, the parties have entered into this Agreement effective as of
the Grant Date.
 

 
Company
Diligent Board Member Services, Inc.
         
 
By:
      Name: Alex Sodi     Title: President and Chief Executive Officer          

 
Grantee/Optionee
         
 
 
      Name:       Title: President and Chief Executive Officer          

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Exhibit A
 
CERTIFICATE FOR

Grant Date:

 
Type of Option:  Incentive Stock Option
 
Grant/ Exercise Price:

Total Shares Granted:
 
Grant Expiration Date:
 
Vesting Schedule:  The Options shall vest and shall no longer be subject to
substantially risk of forfeiture in accordance with the following schedule: