Exhibit 10.1


 


DIGITAL IMPACT, INC.


 


Exchange Election and Restricted
Stock Agreement

for the 2005 Restricted Stock Program


under the 1998 Stock Plan


 


This Exchange Election
and Restricted Stock Agreement (this “Agreement”) made as of the date set forth at the
foot of the signature page hereto (the “Exchange Date”) sets forth the agreement
between Digital Impact, Inc., a Delaware corporation (“Digital Impact”), and
the executive whose name is set forth on Schedule A (hereinafter referred
to as “you” and “your”).  This Agreement
and the transfer and conveyance of the Digital Impact common stock described
below are made subject to and in all respects are limited by the provisions of
the Digital Impact, Inc. 1998 Stock Plan, as amended and restated (the “Plan”).


 


1.     Exchange Election


 


(a)   Exchange Program


 


This Agreement is the
document that you must use to elect whether or not you want to participate in
the Digital Impact, Inc. 2005 Restricted Stock Program (the “Program”), as
described in the Supplement dated January 10, 2005 (the “Supplement”) to the S-8
Prospectus dated July 31, 2001 (the “Prospectus”). 
By checking one of the boxes below in paragraph 1(b), you are confirming
that you have received a copy of the Supplement and the Prospectus.


 


(b)   Check the Box


 


Please check only ONE
of the following two boxes:


 


o            YES,
you want to participate in the Program. 
You hereby agree to surrender all of the options to purchase Digital
Impact common stock listed on Schedule A in exchange for the shares of
restricted stock listed on Schedule A, subject to the terms set
forth herein.


 


o            NO,
you decline to participate in the Program.


 


 


	
   

  	
   

  
	
  Signature

  



 


You do not need to read, fill out
or sign any of the remaining provisions of this Agreement if you are not
participating in the Program.


 





















 


2.     Transfer
and Conveyance of Shares. 
Subject to the conditions set forth herein, effective as of the Exchange
Date, Digital Impact hereby transfers and conveys to you and you hereby accept
from Digital Impact, pursuant to the terms and conditions of this Agreement,
the number of shares (the “Shares”)
of Digital Impact’s common stock indicated on Schedule A.


 


3.     Vesting
and Other Restrictions.  Your
right to retain the Shares is subject to certain vesting and other
restrictions, as follows:


 


(a)   Forfeiture of the Unvested Shares.  If you cease for any reason to be a Service
Provider (as defined in the Plan) for any reason prior to vesting of any
Shares, you will forfeit all interest in and any stockholder rights with
respect to the unvested Shares.


 


(b)   Vesting. 
The forfeiture restrictions will lapse (and the Shares will vest) in 16
equal quarterly installments on the last business day of each calendar quarter
on which banks are open in the United States. 
The first vesting date will be March 31, 2005.


 


(c)   Limitations on Transfer.  You may not transfer, sell, assign, pledge,
hypothecate or otherwise dispose of any of the Shares until such Shares have
vested.  The term “transfer” includes,
without limitation, any sale, encumbrance, gift or other disposition, but does
not include any conversion, as described in paragraph 7 below.  Any attempted transfer in violation of this
provision will be void.


 


(d)   Restrictive Legend.  Until your interest in the Shares has vested,
any physical stock certificate representing the Shares will include a
restrictive legend and Digital Impact will maintain stop transfer orders with
respect to such Shares.


 


4.     Escrow
of Shares.  Digital Impact will
hold all unvested Shares in escrow.  It
is not currently contemplated that the Shares will be certificated.  However, if certification of the Shares is
determined to be necessary or appropriate by Digital Impact, then, at Digital
Impact’s request, you will endorse any stock certificate or certificates
representing your unvested Shares, any new, additional, or different shares of
stock that may be issued to you with respect to any unvested Shares held in
escrow, and any other assets that you may receive upon any conversion of
unvested Shares.  Both the Shares and any
such additional shares or assets will be subject to the vesting, forfeiture and
transferability restrictions set forth in paragraph 3 above in the same
fashion as the Shares.


 


5.     Delivery
of Shares.  Digital Impact will
release the Shares from escrow once your interest in the Shares vests and upon
satisfaction of your personal tax obligations, as described in paragraph 6
below.  The Shares will be delivered to
your brokerage account at Smith Barney. 
If you do not currently have an account with Smith Barney, you will need
to establish one.  You may obtain forms
to open an account with Smith Barney by contacting the Company’s General
Counsel.  You agree to complete and sign
any 


 





















 


documents
and take any additional action that Digital Impact may request to enable it to
accomplish the delivery of the Shares on your behalf.


 


6.     Personal
Tax Obligation.  


 


(a)   Tax Obligations.  You agree that Digital
Impact’s obligation to terminate the restrictions on the Shares and release
them from escrow is subject to your satisfaction of the minimum statutory
withholding rates for federal, state and local income and employment tax.  Your personal tax obligation with respect to
the Shares includes:


 


(i)    taxes on the amount equal to the fair market value of the Shares that
vest on each vesting date (unless the shares have previously been taken into
income pursuant to a valid Section 83(b) election);


 


(ii)   taxes on the amount equal to the fair market value of the Shares on the
Exchange Date (only to the extent that you file a Section 83(b) election
with respect to the unvested Shares);


 


(iii)  taxes on
any dividends that are paid on your unvested Shares (recognized when the
related Shares vest); and


 


(iv)  taxes
arising from any other stock or assets that may be issued to you with respect
to your unvested Shares (again, recognized when the Shares vest).


 


Note that your personal tax obligation varies
depending on whether you file a Section 83(b) election with respect to
your Shares.  For more information
regarding a Section 83(b) election, please review the Supplement.


 


(b)   Withholding.  Digital Impact will withhold
from the Shares otherwise deliverable to you on each vesting date that number
of Shares having a value equal to the minimum statutory withholding rates for
federal, state and local taxes.  You may
not elect any other method of withholding.


 


7.     Conversion
of Shares Upon Merger; Recapitalization.  In the event Digital Impact’s common stock is
converted into cash or other shares or securities of Digital Impact or any
other corporation or entity as a result of a merger, consolidation,
reorganization, liquidation or other transaction, any unvested Shares that you
hold at the time of any such transaction may be converted into cash or other
shares or securities of Digital Impact or such other corporation.  Also, the Shares will be proportionately
adjusted for any increase or decrease in the number of issued and outstanding
shares of Digital Impact’s common stock as a result of a stock split, reverse
stock split, stock dividend, combination or reclassification of the common
stock or by reason of a merger, consolidation or other change in the capital
structure of Digital Impact.  Any new
shares or other assets that may be issued to you in connection with any of
these events will be held in escrow in accordance with the same terms and
conditions applicable to the Shares 


 





















 


and
will be distributed to you in accordance with the vesting and other terms of
this Agreement.


 


8.     Conditions
to Effectiveness of Agreement.


 


This Agreement shall not become effective and shall
have no force or effect:


 


•      if you have checked the “NO” box in paragraph 1(a); or


 


•      if Digital Impact has not accepted the Agreement, as
evidenced by a signature on the Agreement on behalf of Digital Impact.


 


In any such case, no options will be cancelled and no
shares of common stock will be issued.


 


9.     Miscellaneous.


 


(a)   Stockholder Rights.  Whether or not your interest
in the Shares has fully vested, you will have all the rights of a stockholder,
including the right to receive dividends or other distributions paid or issued
with respect to the Shares, subject to the provisions of this Agreement.


 


(b)   No Right to Employment.  The action of Digital Impact
in establishing the Plan and the Program and any action taken under any provision
of the Plan, the Program or this Agreement shall not be construed as granting
you any right to remain in the employ of the Company for any period of specific
duration.


 


(c)   Governing Law.  This Agreement shall be
construed and enforced in accordance with, and shall be governed by, the laws
of the State of California.


 





















 


Whereas, the
parties hereto have executed this Agreement as of the Exchange Date.


 


 


	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
  DIGITAL IMPACT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Exchange Date:     January 25,
  2005