Exhibit 10.5

 

JUPITERMEDIA CORPORATION

1999 STOCK INCENTIVE PLAN

(Amended and Restated as of February 27, 2003)

 

1.    Purpose

 

The purpose of the Plan is to provide a means through which the Company and its
Subsidiaries may attract able persons to become and remain directors of the
Company and enter and remain in the employ of the Company and its Subsidiaries
and to provide a means whereby employees, directors and consultants of the
Company and its Subsidiaries can acquire and maintain Common Stock ownership, or
be paid incentive compensation measured by reference to the value of Common
Stock, thereby strengthening their commitment to the welfare of the Company and
its Subsidiaries and promoting an identity of interest between stockholders and
these employees, directors and consultants.

 

So that the appropriate incentive can be provided, the Plan provides for
granting Incentive Stock Options, Nonqualified Stock Options, Restricted Stock
Awards, and other Stock-based Awards, or any combination of the foregoing.

 

2.    Definitions

 

The following definitions shall be applicable throughout the Plan.

 

(a) “Affiliate” of any individual or entity means an individual or entity that
is directly or indirectly through one or more intermediaries controlled by or
under common control with the individual or entity specified.

 

(b) “Award” means, individually or collectively, any Incentive Stock Option,
Nonqualified Stock Option, Restricted Stock Award, or other Stock-based Award.

 

(c) “Board” means the Board of Directors of Jupitermedia Corporation.

 

(d) “Cause” means the Company or a Subsidiary having cause to terminate a
Participant’s employment or service under any existing employment, consulting or
any other agreement between the Participant and the Company or a Subsidiary. In
the absence of any such an employment, consulting or other agreement, a
Participant shall be deemed to have been terminated for Cause if the Committee
determines that his termination of employment with the Company or a Subsidiary
is on account of (A) incompetence, fraud, personal dishonesty, embezzlement,
defalcation or acts of gross negligence or gross misconduct on the part of
Participant in the course of his employment or services, (B) a material breach
of Participant’s fiduciary duty of loyalty to the Company or a Subsidiary, (C) a
Participant’s engagement in conduct that is materially injurious to the Company
or a Subsidiary, (D) a Participant’s conviction by a court of competent
jurisdiction of, or pleading “guilty” or “no contest” to, (x) a felony, or (y)
any other criminal charge (other than minor traffic violations) which could
reasonably be expected to have a material adverse impact on Company’s or a
Subsidiary’s reputation and standing in the community; (E) public or consistent
drunkenness by a Participant or his illegal use of narcotics which is, or could
reasonably be expected to become, materially injurious to the reputation or
business of the Company or a Subsidiary or which impairs, or could reasonably be
expected to impair, the performance of a Participant’s duties to the Company or
a Subsidiary; or (F) willful failure by a Participant to follow the lawful
directions of a superior officer or the Board, representing disloyalty to the
goals of the Company or a Subsidiary.

 

(e) “Change in Control” shall, unless the Board otherwise directs by resolution
adopted prior thereto or, in the case of a particular award, the applicable
Award agreement states otherwise, be deemed to occur if (i) any “person” (as
that term is used in Sections 13 and 14(d)(2) of the Exchange Act) other than a
Founder (as defined

 

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below) is or becomes the beneficial owner (as that term is used in Section 13(d)
of the Exchange Act), directly or indirectly, of 50% or more of either the
outstanding shares of Common Stock or the combined voting power of the Company’s
then outstanding voting securities entitled to vote generally, (ii) during any
period of two consecutive years beginning on the date of the consummation of the
IPO, individuals who constitute the Board at the beginning of such period cease
for any reason to constitute at least a majority thereof, unless the election or
the nomination for election by the Company’s shareholders of each new director
was approved by a vote of at least three-quarters of the directors then still in
office who were directors at the beginning of the period or (iii) the Company
undergoes a liquidation or dissolution or a sale of all or substantially all of
its assets. Neither the IPO nor any merger, consolidation or corporate
reorganization in which the owners of the combined voting power of the Company’s
then outstanding voting securities entitled to vote generally prior to said
combination, own 50% or more of the resulting entity’s outstanding voting
securities shall, by itself, be considered a Change in Control. As used herein,
“Founder” means Alan M. Meckler and any of his Affiliates.

 

(f) “Code” means the Internal Revenue Code of 1986, as amended. Reference in the
Plan to any section of the Code shall be deemed to include any amendments or
successor provisions to such section and any regulations under such section.

 

(g) “Committee” means the Board, the Compensation Committee of the Board or such
other committee of at least two people as the Board may appoint to administer
the Plan.

 

(h) “Common Stock” means the common stock par value $0.01 per share, of the
Company.

 

(i) “Company” means Jupitermedia Corporation.

 

(j) “Date of Grant” means the date on which the granting of an Award is
authorized or such other date as may be specified in such authorization.

 

(k) “Disability”, with respect to any particular Participant, means disability
as defined in such Participant’s employment, consulting or other relevant
agreement with the Company or a Subsidiary or, in the absence of any such
agreement, disability as defined in the long-term disability plan of the Company
or a Subsidiary, as may be applicable to the Participant in question, or, in the
absence of such a plan, the complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which a
Participant was employed or served when such disability commenced or, if the
Participant was retired when such disability commenced, the inability to engage
in any substantial gainful activity, in either case as determined by the
Committee based upon medical evidence acceptable to it.

 

(l) “Disinterested Person” means a person who is (i) a ”non-employee director”
within the meaning of Rule 16b-3 under the Exchange Act, or any successor rule
or regulation and (ii) an “outside director” within the meaning of Section
162(m) of the Code; provided, however, that clause (ii) shall apply only with
respect to grants of Awards with respect to which the Company’s tax deduction
could be limited by Section 162(m) of the Code if such clause did not apply.

 

(m) “Eligible Person” means any (i) person regularly employed by the Company or
a Subsidiary; provided, however, that no such employee covered by a collective
bargaining agreement shall be an Eligible Person unless and to the extent that
such eligibility is set forth in such collective bargaining agreement or in an
agreement or instrument relating thereto; (ii) director of the Company or a
Subsidiary; or (iii) consultant to the Company or a Subsidiary.

 

(n) “Exchange Act” means the Securities Exchange Act of 1934.

 

(o) “Fair Market Value” on a given date means (i) if the Stock is listed on a
national securities exchange, the closing price on the primary exchange with
which the Stock is listed and traded on the date prior to such date, or,

 

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if there is no such sale on that date, then on the last preceding date on which
such a sale was reported; (ii) if the Stock is not listed on any national
securities exchange but is quoted in the NASDAQ National Market System on a last
sale basis, the closing price reported on the date prior to such date, or, if
there is no such sale on that date, then on the last preceding date on which a
sale was reported; (iii) if the Stock is not listed on a national securities
exchange nor quoted in the NASDAQ National Market System on a last sale basis,
the amount determined by the Committee to be the fair market value based upon a
good faith attempt to value the Stock accurately and computed in accordance with
applicable regulations of the Internal Revenue Service; or (iv) notwithstanding
clauses (i) - (iii) above, with respect to Awards granted as of the consummation
of the IPO, the price at which Stock is initially offered to the public in the
IPO.

 

(p) “Holder” means a Participant who has been granted an Award.

 

(q) “Incentive Stock Option” means an Option granted by the Committee to a
Participant under the Plan which is designated by the Committee as an Incentive
Stock Option pursuant to Section 422 of the Code.

 

(r) “IPO” means the initial underwritten offering of Common Stock to the public
through an effective registration statement.

 

(s) “IPO Option” means Non-Employee Director Options granted upon the
consummation of the IPO.

 

(t) “IPO Price” means the price per share that the Common Stock is first offered
to the public in the IPO.

 

(u) “Non-Employee Director” means a director of the Company who is not also an
employee of the Company.

 

(v) “Non-Employee Director Option” means an Option granted automatically to
Non-Employee Directors pursuant to Section 8.

 

(w) “Nonqualified Stock Option” means an Option granted under the Plan which is
not designated as an Incentive Stock Option.

 

(x) “Normal Termination” means termination of employment or service with the
Company and all Subsidiaries:

 

  (i) Upon retirement pursuant to the retirement plan of the Company or a
Subsidiary, as may be applicable at the time to the Participant in question;

 

  (ii) On account of Disability;

 

  (iii) With the written approval of the Committee; or

 

  (iv) By the Company or a Subsidiary without Cause.

 

(y) “Option” means an Award granted under Section 7 or 8 of the Plan.

 

(z) “Option Period” means the period described in Section 7(c).

 

(aa) “Option Price” means the exercise price set for an Option described in
Section 7(a).

 

(bb) “Participant” means an Eligible Person who has been selected by the
Committee to participate in the Plan and to receive an Award or a Non-Employee
Director who has received an automatic grant pursuant to Section 8.

 

(cc) “Plan” means the Company’s 1999 Stock Incentive Plan.

 

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(dd) “Restricted Period” means, with respect to any share of Restricted Stock,
the period of time determined by the Committee during which such Award is
subject to the restrictions set forth in Section 9.

 

(ee) “Restricted Stock” means shares of Stock issued or transferred to a
Participant subject to forfeiture and the other restrictions set forth in
Section 9.

 

(ff) “Restricted Stock Award” means an Award of Restricted Stock granted under
Section 9 of the Plan.

 

(gg) “Securities Act” means the Securities Act of 1933, as amended.

 

(hh) “Stock” means the Common Stock or such other authorized shares of stock of
the Company as from time to time may be authorized for use under the Plan.

 

(ii) “Stock Option Agreement” means the agreement between the Company and a
Participant who has been granted an Option pursuant to Section 7 or 8 which
defines the rights and obligations of the parties as required in Section 7(d) or
8.

 

(jj) “Subsidiary” means any subsidiary of the Company as defined in Section
424(f) of the Code.

 

(kk) “Term” means the term of a Non-Employee Director Option as set forth in
Section 8.

 

3.    Effective Date, Duration and Shareholder Approval

 

The Plan is effective as of April 15, 1999, the date on which the Plan was
adopted by the Board.

 

The expiration date of the Plan, after which no Awards may be granted hereunder,
shall be April 15, 2009; provided, however, that the administration of the Plan
shall continue in effect until all matters relating to the payment of Awards
previously granted have been settled.

 

4.    Administration

 

The Committee shall administer the Plan. Unless otherwise determined by the
Board, each member of the Committee shall, at the time he takes any action with
respect to an Award under the Plan, be a Disinterested Person. The majority of
the members of the Committee shall constitute a quorum. The acts of a majority
of the members present at any meeting at which a quorum is present or acts
approved in writing by a majority of the Committee shall be deemed the acts of
the Committee.

 

Subject to the provisions of the Plan, the Committee shall have exclusive power
to:

 

(a) Select the Eligible Persons to participate in the Plan;

 

(b) Determine the nature and extent of the Awards to be made to each Eligible
Person;

 

(c) Determine the time or times when Awards will be made to Eligible Persons;

 

(d) Determine the duration of each Option Period and Restricted Period;

 

(e) Determine the conditions to which the payment of Awards may be subject;

 

(f) Prescribe the form of Stock Option Agreement or other form or forms
evidencing Awards; and

 

(g) Cause records to be established in which there shall be entered, from time
to time as Awards are made to Participants, the date of each Award, the number
of Incentive Stock Options, Nonqualified Stock Options, shares

 

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of Restricted Stock and other Stock-based Awards granted by the Committee to
each Participant, the expiration date, the Option Period and the duration of any
applicable Restricted Period.

 

The Committee shall have the authority to interpret the Plan and, subject to the
provisions of the Plan, to establish, adopt, or revise such rules and
regulations and to make all such determinations relating to the Plan as it may
deem necessary or advisable for the administration of the Plan. The Committee’s
interpretation of the Plan or any documents evidencing Awards granted pursuant
thereto and all decisions and determinations by the Committee with respect to
the Plan shall be final, binding, and conclusive on all parties unless otherwise
determined by the Board.

 

5.    Grant of Awards; Shares Subject to the Plan

 

The Committee may, from time to time, grant Awards of Options, Restricted Stock
and other Stock-based Awards to one or more Eligible Persons and, unless
otherwise determined by the Committee, Non-Employee Directors will automatically
receive Awards pursuant to the formula set forth in Section 8; provided,
however, that:

 

(a) Subject to Section 12, the aggregate number of shares of Stock reserved and
available for issuance pursuant to Awards under the Plan is 10,000,000;

 

(b) Except as set forth in Section 5(d), such shares shall be deemed to have
been used in payment of Awards only to the extent they are actually delivered
and not where the Fair Market Value equivalent of such shares for a Stock-based
Award is paid in cash. In the event any Award shall be surrendered, terminate,
expire, or be forfeited, the number of shares of Stock no longer subject thereto
shall thereupon be released and shall thereafter be available for new Awards
under the Plan;

 

(c) Stock delivered by the Company in settlement of Awards under the Plan may be
authorized and unissued Stock or Stock held in the treasury of the Company or
may be purchased on the open market or by private purchase; and

 

(d) Following the date that the exemption from the application of Section 162(m)
of the Code described in Section 16 (or any other exemption having similar
effect) ceases to apply to Awards, no Participant may receive Options or stock
appreciation rights under the Plan with respect to more than 500,000 shares of
Stock in any one year. For this purpose, such shares shall be deemed to have
been used in payment of Awards whether they are actually delivered or where the
Fair Market Value equivalent of such shares for a stock appreciation right is
paid in cash.

 

6.    Eligibility

 

Participation shall be limited to Eligible Persons who have received written
notification from the Committee, or from a person designated by the Committee,
that they have been selected to participate in the Plan and to Non-Employee
Directors who will receive automatic grants of Nonqualified Stock Options
pursuant to Section 8.

 

7.    Discretionary Grant of Stock Options

 

The Committee is authorized to grant one or more Incentive Stock Options or
Nonqualified Stock Options to any Eligible Person; provided, however, that no
Incentive Stock Options shall be granted to any Eligible Person who is not an
employee of the Company or a Subsidiary. Each Option so granted shall be subject
to the following conditions, or to such other conditions as may be reflected in
the applicable Stock Option Agreement.

 

(a) Option price. The exercise price (“Option Price”) per share of Stock for
each Option shall be set by the Committee at the time of grant but shall not be
less than (i) in the case of an Incentive Stock Option, and subject

 

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to Section 7(e), the Fair Market Value of a share of Stock at the Date of Grant,
and (ii) in the case of a Non-Qualified Stock Option, the par value per share of
Stock; provided, however, that following the date that the exemption from the
application of Section 162(m) of the Code described in Section 16 (or any other
exemption having similar effect) ceases to apply to Options, all Options
intended to qualify as “performance-based compensation” under Section 162(m) of
the Code shall have an Option Price per share of Stock no less than the Fair
Market Value of a share of Stock on the Date of Grant.

 

(b) Manner of exercise and form of payment. Options which have become
exercisable may be exercised by delivery of written notice of exercise to the
Committee accompanied by payment of the Option Price. The Option Price may be
payable in cash, by bank check (acceptable to the Committee) and/or shares of
Stock (valued at the Fair Market Value at the time the Option is exercised),
having in the aggregate a value equal to the aggregate Option Price or, in the
discretion of the Committee, either (i) in other property having a fair market
value on the date of exercise equal to the aggregate Option Price, or (ii) by
delivering to the Committee a copy of irrevocable instructions to a stockbroker
to deliver promptly to the Company an amount of sale or loan proceeds sufficient
to pay the aggregate Option Price.

 

(c) Option Period and Expiration. Options shall vest and become exercisable in
such manner and on such date or dates determined by the Committee and shall
expire after such period, not to exceed ten years, as may be determined by the
Committee (the “Option Period”); provided, however, that notwithstanding any
vesting dates set by the Committee, the Committee may in its sole discretion
accelerate the exercisability of any Option, which acceleration shall not affect
the terms and conditions of any such Option other than with respect to
exercisability. Unless otherwise specifically determined by the Committee, the
vesting of an Option shall occur only while the Participant is employed or
rendering services to the Company or its Subsidiaries and all vesting shall
cease upon a Holder’s termination of employment or services for any reason. If
an Option is exercisable in installments, such installments or portions thereof
which become exercisable shall remain exercisable until the Option expires.
Unless otherwise stated in the applicable Option Agreement, the Option shall
expire earlier than the end of the Option Period in the following circumstances:

 

  (i) If prior to the end of the Option Period, the Holder shall undergo a
Normal Termination, the Option shall expire on the earlier of the last day of
the Option Period or the date that is three months after the date of such Normal
Termination. In such event, the Option shall remain exercisable by the Holder
until its expiration, but only to the extent the Option was vested and
exercisable at the time of such Normal Termination.

 

  (ii) If the Holder dies prior to the end of the Option Period and while still
in the employ or service of the Company or a Subsidiary, or within three months
of Normal Termination, the Option shall expire on the earlier of the last day of
the Option Period or the date that is twelve months after the date of death of
the Holder. In such event, the Option shall remain exercisable by the person or
persons to whom the Holder’s rights under the Option pass by will or the
applicable laws of descent and distribution until its expiration, but only to
the extent the Option was vested and exercisable by the Holder at the time of
death.

 

  (iii) If the Holder ceases employment or service with the Company and all
Subsidiaries for reasons other than Normal Termination or death, the Option
shall expire immediately upon such cessation of employment or service.

 

(d) Stock Option Agreement—Other Terms and Conditions. Each Option granted under
the Plan shall be evidenced by a Stock Option Agreement, which shall contain
such provisions as may be determined by the Committee and, except as may be
specifically stated otherwise in such Stock Option Agreement, which shall be
subject to the following terms and conditions:

 

  (i) Each Option issued pursuant to this Section 7 or portion thereof that is
exercisable shall be exercisable for the full amount or for any part thereof.

 

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  (ii) Each share of Stock purchased through the exercise of an Option issued
pursuant to this Section 7 shall be paid for in full at the time of the
exercise. Each Option shall cease to be exercisable, as to any share of Stock,
when the Holder purchases the share or when the Option expires.

 

  (iii) Options issued pursuant to this Section 7 shall not be transferable by
the Holder except by will or the laws of descent and distribution and shall be
exercisable during the Holder’s lifetime only by him; provided, however, that
the Committee may at any time upon the request of a Holder allow for the
transfer of any Option, subject to such conditions or limitations as it may
establish.

 

  (iv) Each Option issued pursuant to this Section 7 shall vest and become
exercisable by the Holder in accordance with the vesting schedule established by
the Committee and set forth in the Stock Option Agreement.

 

  (v) Each Stock Option Agreement may contain a provision that, upon demand by
the Committee for such a representation, the Holder shall deliver to the
Committee at the time of any exercise of an Option issued pursuant to this
Section 7 a written representation that the shares to be acquired upon such
exercise are to be acquired for investment and not for resale or with a view to
the distribution thereof. Upon such demand, delivery of such representation
prior to the delivery of any shares issued upon exercise of an Option issued
pursuant to this Section 7 shall be a condition precedent to the right of the
Holder or such other person to purchase any shares. In the event certificates
for Stock are delivered under the Plan with respect to which such investment
representation has been obtained, the Committee may cause a legend or legends to
be placed on such certificates to make appropriate reference to such
representation and to restrict transfer in the absence of compliance with
applicable federal or state securities laws.

 

  (vi) Each Incentive Stock Option Agreement shall contain a provision requiring
the Holder to notify the Company in writing immediately after the Holder makes a
disqualifying disposition of any Stock acquired pursuant to the exercise of such
Incentive Stock Option. A disqualifying disposition is any disposition
(including any sale) of such Stock before the later of (a) two years after the
Date of Grant of the Incentive Stock Option or (b) one year after the date the
Holder acquired the Stock by exercising the Incentive Stock Option.

 

(e) Incentive Stock Option Grants to 10% Stockholders. Notwithstanding anything
to the contrary in this Section 7, if an Incentive Stock Option is granted to a
Holder who owns stock representing more than 10% of the voting power of all
classes of stock of the Company or of a Subsidiary, the Option Period shall not
exceed five years from the Date of Grant of such Option and the Option Price
shall be at least 110% of the Fair Market Value (on the Date of Grant) of the
Stock subject to the Option.

 

(f) $100,000 Per Year Limitation for Incentive Stock Options. To the extent the
aggregate Fair Market Value (determined as of the Date of Grant) of Stock for
which Incentive Stock Options are exercisable for the first time by any
Participant during any calendar year (under all plans of the Company and its
Subsidiaries) exceeds $100,000, such excess Incentive Stock Options shall be
treated as Nonqualified Stock Options.

 

(g) Voluntary Surrender. The Committee may permit the voluntary surrender of all
or any portion of any Nonqualified Stock Option issued pursuant to this Section
7 to be conditioned upon the granting to the Holder of a new Option for the same
or a different number of shares as the Option surrendered or require such
voluntary surrender as a condition precedent to a grant of a new Option to such
Participant. Such new Option shall be exercisable at an Option Price, during an
Option Period, and in accordance with any other terms or conditions specified by
the Committee at the time the new Option is granted, all determined in
accordance with the provisions of the Plan without regard to the Option Price,
Option Period, or any other terms and conditions of the Nonqualified Stock
Option surrendered.

 

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8.    Automatic Grant of Options

 

Upon the consummation of the IPO each Non-Employee Director shall be
automatically granted an IPO Option to purchase 5,000 shares of Stock.
Thereafter, unless otherwise determined by the Committee, on the date any person
first becomes a Non-Employee Director, such person shall be automatically
granted, without further action by the Board or the Committee, a Nonqualified
Stock Option to purchase 5,000 shares of Stock (the “Initial Non-Employee
Director Option”). Thereafter, unless otherwise determined by the Committee, for
the remainder of the term of the Plan and provided he remains a Non-Employee
Director of the Company, on the date of the Board meeting on September 18, 2002,
and on the date of each September Board meeting of each subsequent fiscal year
(the “September Meeting”), each Non-Employee Director who attends such Board
meeting will be automatically granted an Option to Purchase 20,000 shares of
Stock (each, an “Annual Non-Employee Director Option”). The Annual Non-Employee
Director Options are granted in advance as compensation for the attendance of
the four (4) regular Board meetings (each, a “Regular Meeting”) during the
course of the year, beginning with (and including) the September Meeting and for
the next three (3) Regular Meetings. Each Annual Non-Employee Director Option
will be subject to forfeiture for the non-attendance of any of the three Regular
Meetings immediately following the September Meeting at which the Annual
Non-Employee Director Option was granted at the rate of 5,000 shares of Stock
underlying such Option for each Regular Meeting not attended, such forfeiture to
be effective on the date of the Regular Meeting not attended. In addition,
unless otherwise determined by the Committee, on the date of each Board meeting
that is not a Regular Meeting (each, a “Special Meeting”), each Non-Employee
Director who attends such Special Meeting shall be automatically granted,
without further action by the Board or the Committee, a Nonqualified Stock
Option to purchase 5,000 shares of Stock (a “Special Meeting Option”). Unless
otherwise determined by the Committee, on the date that any person first becomes
a Non-Employee Director other than the date of a September Meeting, such
Non-Employee Director shall be automatically granted, without further action by
the Board or the Committee and in addition to the Initial Non-Employee Director
Option, a Nonqualified Stock Option to purchase the number of shares of Stock
equal to (i) the number of Regular Meetings scheduled to occur between the date
such person first becomes a Non-Employee Director and the next September
Meeting, but not including such next September Meeting, multiplied by (ii) 5,000
(each, a “Part-year Annual Non-Employee Director Option”). Each Part-Year Annual
Non-Employee Director Option is intended to be compensation in advance for the
attendance of the Regular Meetings scheduled to occur until the next September
Meeting and shall be forfeitable to the same degree as each Annual Non-Employee
Director Option for non-attendance of any such Board meeting.

 

In addition to the Initial Non-Employee Director Option, Annual Non-Employee
Director Option, Special Meeting Option and Part-Year Annual Non-Employee
Director Option, as applicable, (i) each Non-Employee Director who serves as the
Chairman of the Compensation Committee of the Board shall automatically be
granted a Nonqualified Stock Option to purchase 5,000 shares of Stock (the
“Compensation Committee Chairman Option”) and (ii) each Non-Employee Director
who serves as the Chairman of the Audit Committee of the Board shall
automatically be granted a Nonqualified Stock Option to purchase 10,000 shares
of Stock (the “Audit Committee Chairman Option”). The Compensation Committee
Chairman Option and the Audit Committee Chairman Option shall be granted on the
first day of September each year (commencing on September 1, 2003) to the
Non-Employee Directors who serve as the Chairman of those respective committees
as of such date. All such Options automatically granted to Non-Employee
Directors shall hereinafter be referred to as Non-Employee Director Options.

 

(a) Option Price; Term. IPO Options shall have an Option Price per share equal
to the IPO Price. All other Non-Employee Director Options shall have an Option
Price per share equal to the Fair Market Value of a share of Stock on the Date
of Grant. All Non-Employee Director Options shall vest and become exercisable
over a period of three years at the rate of one-third of each grant annually on
each of the three consecutive anniversaries of the Date of Grant directly
following the Date of Grant provided the Non-Employee Director’s services as a
director continues through each such anniversary. The term of each Non-Employee
Director Option (“Term”), after which each such Option shall expire, shall be
ten years from the date of Grant.

 

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(b) Expiration. If prior to the expiration of the Term of a Non-Employee
Director Option the Non-Employee Director shall cease to be a member of the
Board for any reason other than his death, the Non-Employee Director Option
shall expire on the earlier of the expiration of the Term or the date that is
three months after the date of such cessation. If prior to the expiration of the
Term of a Non-Employee Director Option a Non-Employee Director shall cease to be
a member of the Board by reason of his death or disability (as determined by the
Committee) or if the Non-Employee Director dies during the three-month period
following his termination as a director, the Non-Employee Director Option shall
become, subject to any forfeiture provisions set forth above, fully vested and
exercisable and shall expire on the earlier of the expiration of the Term or the
date that is one year after the date of death. In the event a Non-Employee
Director ceases to be a member of the Board for any reason, any unexpired
Non-Employee Director Option shall thereafter be exercisable until its
expiration, but only to the extent that such Option was vested and exercisable
at the time of such cessation.

 

(c) Stock Option Agreement. Each Non-Employee Director Option shall be evidenced
by a Stock Option Agreement, which shall contain such provisions as may be
determined by the Committee.

 

(d) Nontransferability. Non-Employee Director Options shall not be transferable
except by will or the laws of descent and distribution and shall be exercisable
during the Non-Employee Director’s lifetime only by him; provided, however, that
the Committee may at any time upon the request of a Holder allow for the
transfer of any Non-Employee Director Option, subject to such conditions or
limitations as it may establish.

 

9.    Restricted Stock Awards

 

(a) Award of Restricted Stock.

 

  (i) The Committee shall have the authority (1) to grant Restricted Stock, (2)
to issue or transfer Restricted Stock to Eligible Persons, and (3) to establish
terms, conditions and restrictions applicable to such Restricted Stock,
including the Restricted Period, which may differ with respect to each grantee,
the time or times at which Restricted Stock shall be granted or become vested
and the number of shares to be covered by each grant.

 

  (ii) The Holder of a Restricted Stock Award shall execute and deliver to the
Company an Award agreement with respect to the Restricted Stock setting forth
the restrictions applicable to such Restricted Stock. If the Committee
determines that the Restricted Stock shall be held in escrow rather than
delivered to the Holder pending the release of the applicable restrictions, the
Holder additionally shall execute and deliver to the Company (i) an escrow
agreement satisfactory to the Committee, and (ii) the appropriate blank stock
powers with respect to the Restricted Stock covered by such agreements. If a
Holder shall fail to execute a Restricted Stock agreement and, if applicable, an
escrow agreement and stock powers, the Award shall be null and void. Subject to
the restrictions set forth in Section 9(b), the Holder shall generally have the
rights and privileges of a stockholder as to such Restricted Stock, including
the right to vote such Restricted Stock. At the discretion of the Committee,
cash dividends and stock dividends, if any, with respect to the Restricted Stock
may be either currently paid to the Holder or withheld by the Company for the
Holder’s account. Unless otherwise determined by the Committee no interest will
accrue or be paid on the amount of any cash dividends withheld. Unless otherwise
determined by the Committee, cash dividends or stock dividends so withheld by
the Committee shall be subject to forfeiture to the same degree as the shares of
Restricted Stock to which they relate.

 

  (iii) Upon the Award of Restricted Stock, the Committee shall cause a stock
certificate registered in the name of the Holder to be issued and, if it so
determines, deposited together with the stock powers with an escrow agent
designated by the Committee. If an escrow arrangement is used, the Committee
shall cause the escrow agent to issue to the Holder a receipt evidencing any
stock certificate held by it registered in the name of the Holder.

 

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(b) Restrictions.

 

  (i) Restricted Stock awarded to a Participant shall be subject to the
following restrictions until the expiration of the Restricted Period, and to
such other terms and conditions as may be set forth in the applicable Award
agreement: (1) if an escrow arrangement is used, the Holder shall not be
entitled to delivery of the stock certificate; (2) the shares shall be subject
to the restrictions on transferability set forth in the Award agreement; (3) the
shares shall be subject to forfeiture to the extent provided in Section 9(d) and
the Award Agreement and, to the extent such shares are forfeited, the stock
certificates shall be returned to the Company, and all rights of the Holder to
such shares and as a shareholder shall terminate without further obligation on
the part of the Company.

 

  (ii) The Committee shall have the authority to remove any or all of the
restrictions on the Restricted Stock whenever it may determine that, by reason
of changes in applicable laws or other changes in circumstances arising after
the date of the Restricted Stock Award, such action is appropriate.

 

(c) Restricted Period. The Restricted Period of Restricted Stock shall commence
on the Date of Grant and shall expire from time to time as to that part of the
Restricted Stock indicated in a schedule established by the Committee and set
forth in a written Award agreement.

 

(d) Forfeiture Provisions. Except to the extent determined by the Committee and
reflected in the underlying Award agreement, in the event a Holder terminates
employment with the Company and all Subsidiaries during a Restricted Period,
that portion of the Award with respect to which restrictions have not expired
(“Non-Vested Portion”) shall be treated as follows.

 

  (i) Upon the voluntary resignation of a Participant or discharge by the
Company or a Subsidiary for Cause, the Non-Vested Portion of the Award shall be
completely forfeited.

 

  (ii) Upon Normal Termination, the Non-Vested Portion of the Award shall be
prorated for service during the Restricted Period and shall be received as soon
as practicable following termination.

 

  (iii) Upon death, the Non-Vested Portion of the Award shall be prorated for
service during the Restricted Period and paid to the Participant’s beneficiary
as soon as practicable following death.

 

(e) Delivery of Restricted Stock. Upon the expiration of the Restricted Period
with respect to any shares of Stock covered by a Restricted Stock Award, the
restrictions set forth in Section 9(b) and the Award agreement shall be of no
further force or effect with respect to shares of Restricted Stock which have
not then been forfeited. If an escrow arrangement is used, upon such expiration,
the Company shall deliver to the Holder, or his beneficiary, without charge, the
stock certificate evidencing the shares of Restricted Stock which have not then
been forfeited and with respect to which the Restricted Period has expired (to
the nearest full share) and any cash dividends or stock dividends credited to
the Holder’s account with respect to such Restricted Stock and the interest
thereon, if any.

 

(f) Stock Restrictions. Each certificate representing Restricted Stock awarded
under the Plan shall bear the following legend until the end of the Restricted
Period with respect to such Stock:

 

“Transfer of this certificate and the shares represented hereby is restricted
pursuant to the terms of a Restricted Stock Agreement, dated as of             ,
between Jupitermedia Corporation and             . A copy of such Agreement is
on file at the offices of Jupitermedia Corporation.”

 

Stop transfer orders shall be entered with the Company’s transfer agent and
registrar against the transfer of legended securities.

 

10.    Other Stock-Based Awards

 

The Committee may grant any other cash, stock or stock-related Awards to any
eligible individual under this Plan that the Committee deems appropriate,
including, but not limited to, stock appreciation rights, limited stock

 

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appreciation rights, phantom stock Awards, the bargain purchase of Stock and
Stock bonuses. Any such benefits and any related agreements shall contain such
terms and conditions as the Committee deems appropriate. Such Awards and
agreements need not be identical. With respect to any benefit under which shares
of Stock are or may in the future be issued for consideration other than prior
services, the amount of such consideration shall not be less than the amount
(such as the par value of such shares) required to be received by the Company in
order to comply with applicable state law.

 

11.    General

 

(a) Additional Provisions of an Award. Awards under the Plan also may be subject
to such other provisions (whether or not applicable to the benefit awarded to
any other Participant) as the Committee determines appropriate including,
without limitation, provisions to assist the Participant in financing the
purchase of Stock upon the exercise of Options, provisions for the forfeiture of
or restrictions on resale or other disposition of shares of Stock acquired under
any Award, provisions giving the Company the right to repurchase shares of Stock
acquired under any Award in the event the Participant elects to dispose of such
shares, and provisions to comply with Federal and state securities laws and
Federal and state tax withholding requirements. Any such provisions shall be
reflected in the applicable Award agreement.

 

(b) Privileges of Stock Ownership. Except as otherwise specifically provided in
the Plan, no person shall be entitled to the privileges of stock ownership in
respect of shares of Stock which are subject to Awards hereunder until such
shares have been issued to that person.

 

(c) Government and Other Regulations. The obligation of the Company to make
payment of Awards in Stock or otherwise shall be subject to all applicable laws,
rules, and regulations, and to such approvals by governmental agencies as may be
required. Notwithstanding any terms or conditions of any Award to the contrary,
the Company shall be under no obligation to offer to sell or to sell and shall
be prohibited from offering to sell or selling any shares of Stock pursuant to
an Award unless such shares have been properly registered for sale pursuant to
the Securities Act with the Securities and Exchange Commission or unless the
Company has received an opinion of counsel, satisfactory to the Company, that
such shares may be offered or sold without such registration pursuant to an
available exemption therefrom and the terms and conditions of such exemption
have been fully complied with. The Company shall be under no obligation to
register for sale under the Securities Act any of the shares of Stock to be
offered or sold under the Plan. If the shares of Stock offered for sale or sold
under the Plan are offered or sold pursuant to an exemption from registration
under the Securities Act, the Company may restrict the transfer of such shares
and may legend the Stock certificates representing such shares in such manner as
it deems advisable to ensure the availability of any such exemption.

 

(d) Tax Withholding. Notwithstanding any other provision of the Plan, the
Company or a Subsidiary, as appropriate, shall have the right to deduct from all
Awards cash and/or Stock, valued at Fair Market Value on the date of payment, in
an amount necessary to satisfy all Federal, state or local taxes as required by
law to be withheld with respect to such Awards and, in the case of Awards paid
in Stock, the Holder or other person receiving such Stock may be required to pay
to the Company or a Subsidiary, as appropriate, prior to delivery of such Stock,
the amount of any such taxes which the Company or Subsidiary is required to
withhold, if any, with respect to such Stock. Subject in particular cases to the
disapproval of the Committee, the Company may accept shares of Stock of
equivalent Fair Market Value in payment of such withholding tax obligations if
the Holder of the Award elects to make payment in such manner.

 

(e) Claim to Awards and Employment Rights. No individual shall have any claim or
right to be granted an Award under the Plan or, having been selected for the
grant of an Award, to be selected for a grant of any other Award. Neither the
Plan nor any action taken hereunder shall be construed as giving any individual
any right to be retained in the employ or service of the Company or a
Subsidiary.

 

(f) Designation and Change of Beneficiary. Each Participant may file with the
Committee a written designation of one or more persons as the beneficiary who
shall be entitled to receive the rights or amounts

 

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payable with respect to an Award due under the Plan upon his death. A
Participant may, from time to time, revoke or change his beneficiary designation
without the consent of any prior beneficiary by filing a new designation with
the Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Participant’s death, and in no event shall it be effective as of a date prior to
such receipt. If no beneficiary designation is filed by the Participant, the
beneficiary shall be deemed to be his or her spouse or, if the Participant is
unmarried at the time of death, his or her estate.

 

(g) Payments to Persons Other Than Participants. If the Committee shall find
that any person to whom any amount is payable under the Plan is unable to care
for his affairs because of illness or accident, or is a minor, or has died, then
any payment due to such person or his estate (unless a prior claim therefor has
been made by a duly appointed legal representative) may, if the Committee so
directs the Company, be paid to his spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Company therefor.

 

(h) No Liability of Committee Members. No member of the Committee shall be
personally liable by reason of any contract or other instrument executed by such
member or on his behalf in his capacity as a member of the Committee nor for any
mistake of judgment made in good faith, and the Company shall indemnify and hold
harmless each member of the Committee and each other employee, officer or
director of the Company to whom any duty or power relating to the administration
or interpretation of the Plan may be allocated or delegated, against any cost or
expense (including counsel fees) or liability (including any sum paid in
settlement of a claim) arising out of any act or omission to act in connection
with the Plan unless arising out of such person’s own fraud or willful bad
faith; provided, however, that approval of the Board shall be required for the
payment of any amount in settlement of a claim against any such person. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Articles of Incorporation or By-Laws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.

 

(i) Governing law. The Plan shall be governed by and construed in accordance
with the internal laws of the State of Delaware without regard to the principles
of conflicts of law thereof.

 

(j) Funding. No provision of the Plan shall require the Company, for the purpose
of satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Holders shall have no rights
under the Plan other than as unsecured general creditors of the Company, except
that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.

 

(k) Nontransferability. A person’s rights and interest under the Plan, including
amounts payable, may not be sold, assigned, donated, or transferred or otherwise
disposed of, mortgaged, pledged or encumbered except, in the event of a Holder’s
death, to a designated beneficiary to the extent permitted by the Plan, or in
the absence of such designation, by will or the laws of descent and
distribution; provided, however, the Committee may, in its sole discretion,
allow for transfer of Awards other than Incentive Stock Options to other persons
or entities, subject to such conditions or limitations as it may establish.

 

(l) Reliance on Reports. Each member of the Committee and each member of the
Board shall be fully justified in relying, acting or failing to act, and shall
not be liable for having so relied, acted or failed to act in good faith, upon
any report made by the independent public accountant of the Company and its
Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than himself.

 

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(m) Relationship to Other Benefits. No payment under the Plan shall be taken
into account in determining any benefits under any pension, retirement, profit
sharing, group insurance or other benefit plan of the Company or any Subsidiary
except as otherwise specifically provided in such other plan.

 

(n) Expenses. The expenses of administering the Plan shall be borne by the
Company and its Subsidiaries.

 

(o) Pronouns. Masculine pronouns and other words of masculine gender shall refer
to both men and women.

 

(p) Titles and Headings. The titles and headings of the sections in the Plan are
for convenience of reference only, and in the event of any conflict, the text of
the Plan, rather than such titles or headings shall control.

 

(q) Termination of Employment. For all purposes herein, a person who transfers
from employment or service with the Company to employment or service with a
Subsidiary or vice versa shall not be deemed to have terminated employment or
service with the Company or a Subsidiary.

 

12.    Changes in Capital Structure

 

Awards granted under the Plan and any agreements evidencing such Awards, the
maximum number of shares of Stock subject to all Awards under the Plan and the
maximum number of shares of Stock with respect to which any one person may be
granted Options or stock appreciation rights during any year may be subject to
adjustment or substitution, as determined by the Committee in its sole
discretion, as to the number, price or kind of a share of Stock or other
consideration subject to such Awards or as otherwise determined by the Committee
to be equitable (i) in the event of changes in the outstanding Stock or in the
capital structure of the Company by reason of stock dividends, stock splits,
reverse stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the Date of Grant of any such Award or (ii) in
the event of any change in applicable laws or any change in circumstances which
results in or would result in any substantial dilution or enlargement of the
rights granted to, or available for, Participants in the Plan, or (iii) for any
other reason which the Committee, in its sole discretion, determines otherwise
warrants equitable adjustment because it interferes with the intended operation
of the Plan. Any adjustment to Incentive Stock Options under this Section 12
shall take into account that adjustments which constitute a “modification”
within the meaning of Section 424(h)(3) of the Code may have an adverse tax
impact on such Incentive Stock Options and the Committee may, in its sole
discretion, provide for a different adjustment or no adjustment in order to
preserve the tax effects of Incentive Stock Options. Unless otherwise determined
by the Committee, in its sole discretion, any adjustments or substitutions under
this Section 12 shall be made in a manner which does not adversely affect the
exemption provided pursuant to Rule 16b-3 under the Exchange Act. Further,
following the date that the exemption from the application of Section 162(m) of
the Code described in Section 16 (or any other exemption having similar effect)
ceases to apply to Awards, with respect to Awards intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, such
adjustments or substitutions shall, unless otherwise determined by the Committee
in its sole discretion, be made only to the extent that the Committee determines
that such adjustments or substitutions may be made without a loss of
deductibility for such Awards under Section 162(m) of the Code. The Company
shall give each Participant notice of an adjustment hereunder and, upon notice,
such adjustment shall be conclusive and binding for all purposes.

 

Notwithstanding the above, in the event of any of the following:

 

A. the Company is merged or consolidated with another corporation or entity such
that after such merger or consolidation the Company is not the surviving entity
or the ultimate parent of the surviving entity;

 

B. All or substantially all of the assets of the Company or the Common Stock are
acquired by another person or entity;

 

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C. The reorganization or liquidation of the Company; or

 

D. the Company shall enter into a written agreement to undergo an event
described in clauses A, B or C above,

 

then the Committee may, in its discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Awards and pay to the
Holders thereof, in cash or Stock, the value of such Awards based upon the price
per share of Stock received or to be received by other shareholders of the
Company in the event. The terms of this Section 12 may be varied by the
Committee in any particular Award agreement.

 

13.    Effect of Change in Control

 

Except to the extent reflected in a particular Award agreement:

 

(a) In the event of a Change in Control, notwithstanding any vesting schedule
with respect to an Award of Options or Restricted Stock, such Option shall
become immediately exercisable with respect to 100% of the shares subject to
such Option, and the Restricted Period shall expire immediately with respect to
100% of such shares of Restricted Stock.

 

(b) In the event of a Change in Control, all other Awards shall become fully
vested and or payable to the fullest extent of any Award or portion thereof that
has not then expired and any restrictions with respect thereto shall expire. The
Committee shall have full authority and discretion to interpret this Section 13
and to implement any course of action with respect to any Award so as to satisfy
the intent of this provision.

 

(c) The obligations of the Company under the Plan shall be binding upon any
successor corporation or organization resulting from the merger, consolidation
or other reorganization of the Company, or upon any successor corporation or
organization succeeding to substantially all of the assets and business of the
Company.

 

14.    Nonexclusivity of the Plan

 

Neither the adoption of this Plan by the Board nor the submission of this Plan
to the stockholder of the Company for approval shall be construed as creating
any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under this Plan, and such arrangements
may be either applicable generally or only in specific cases.

 

15.    Amendments and Termination

 

The Board may at any time terminate the Plan. Subject to Section 12, with the
express written consent of an individual Participant, the Board or the Committee
may cancel or reduce or otherwise alter outstanding Awards if, in its judgment,
the tax, accounting, or other effects of the Plan or potential payouts
thereunder would not be in the best interest of the Company. The Board or the
Committee may, at any time, or from time to time, amend or suspend and, if
suspended, reinstate, the Plan in whole or in part; provided, however, that
without further stockholder approval neither the Board nor the Committee shall
make any amendment to the Plan which would:

 

(a) Materially increase the maximum number of shares of Stock which may be
issued pursuant to Awards, except as provided in Section 12;

 

(b) Extend the maximum Option Period;

 

(c) Extend the termination date of the Plan; or

 

(d) Change the class of persons eligible to receive Awards under the Plan.

 

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16.    Effect of Section 162(m) of the Code

 

The Plan, and all Awards issued thereunder, are intended to be exempt from the
application of Section 162(m) of the Code, which restricts under certain
circumstances the Federal income tax deduction for compensation paid by a public
company to named executives in excess of $1 million per year. The exemption is
based on Treasury Regulation Section 1.162-27(f) with the understanding that
such regulation generally exempts from the application of Section 162(m) of the
Code compensation paid pursuant to a plan that existed before a company becomes
publicly held. Under such Treasury Regulation, this exemption is available to
the Plan for the duration of the period that lasts until the earlier of (i) the
expiration or material modification of the Plan, (ii) the exhaustion of the
maximum number of shares of Stock available for Awards under the Plan, as set
forth in Section 5(a), or (iii) the year 2003 annual meeting of shareholders of
the Company. To the extent that the Committee determines as of the Date of Grant
of an Award that (i) the Award is intended to comply with Section 162(m) of the
Code and (ii) the exemption described above is no longer available with respect
to such Award, such Award shall not be effective until any stockholder approval
required under Section 162(m) of the Code has been obtained.

 

*            *            *

 

As adopted by the Board of Directors of

Jupitermedia Corporation (formerly

internet.com Corporation and

INT Media Group, Inc.) as of

April 15, 1999 and amended and restated

as of February 23, 2000, further amended

and restated as of April 6, 2001,

further amended and restated

as of September 18, 2002 and further

amended as of February 27, 2003.

 

By:                                         
                                    

 

Title:                                                                          

 

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