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


 





















 


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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