EXHIBIT 10.1


 


GAIAM,
INC.


 


Employee
Stock Option Agreement


 


This
Stock Option Agreement set forth below (this “Agreement”) is dated as of the
date of grant set forth below and is between Gaiam, Inc., a Colorado
corporation (“Gaiam”), and the above named individual (the “Grantee”).


 


Gaiam
has established its 1999 Long-Term Incentive Plan (the “Plan”) to advance the
interests of Gaiam and its shareholders by providing incentives to certain
eligible persons who contribute significantly to the strategic and long-term
performance objectives and growth of Gaiam and any parent or subsidiary of
Gaiam.


 


This
Agreement evidences an option grant as follows:


 


	
  Granted
  to:

  	
   

  	
  {Employee’s
  name}

  
	
  Number
  of Shares:

  	
   

  	
  {XXX,XXX)

  
	
  Effective
  Date of Grant:

  	
   

  	
  {Month,
  Day, Year}  

  
	
  Expiration
  Date:

  	
   

  	
  7
  years from Date of Grant

  
	
  Exercise
  Price Per Share:  

  	
   

  	
  $XX.XX

  
	
  Vesting
  Dates:

  	
   

  	
  Two
  percent (2%) of the shares shall vest on each vesting date. The first vesting
  date shall be {{Month, Date, Year} equal to the 1st day of the eleventh month
  after the grant date}, and a vesting date shall occur on the first day of
  each month thereafter until {Month, Day, Year}, when all shares shall be
  vested. Vesting stops if Grantee ceases to be employed by the Company.

  



 


Pursuant
to the provisions of the Plan, the Board of Directors of Gaiam (the “Board”) or
a Committee designated by the Board (the “Committee”) has full power and
authority to direct the execution and delivery of this Agreement in the name
and on behalf of Gaiam.  The Board or the
Committee authorized the execution and delivery of this Agreement. All
capitalized terms not otherwise defined in this Agreement have the same meaning
given such capitalized terms in the Plan.


 


Agreement


 


The parties agree as follows:


 


Section 1.  Grant of Stock Option; Term.  
Subject and pursuant to all terms and conditions stated in this Agreement and
in the Plan, Gaiam hereby grants to Grantee an option (the “Option”) to purchase the number of
shares (the “Option Shares”) of Gaiam’s
Class A common stock, par value $0.0001 per share (the “Common
Shares”), set forth above, at the exercise price set forth
above.  Except as otherwise provided in
this Agreement or the Plan, the Option may not be exercised after the close of
business on the expiration date set forth above. Grantee hereby accepts the
Option on such terms and conditions, including, without limitation, the
confidentiality and non-compete provisions set forth in Section 8 of this
Agreement.  The Option is a Nonqualified Stock
Option (as such term is defined in the Plan). Grantee shall, subject to the
limitations of this Agreement and the Plan, have the right to exercise the
Option by purchasing all or any part of the vested Option Shares then available
for purchase under the vesting schedule set forth above (less any Option Shares
previously purchased upon exercise of this Option).


 


Section 2.  Procedures for Exercise.  Grantee
shall exercise all or any part of the Option by delivering to Gaiam: (i)
written notice of the number of vested Option Shares to be purchased, (ii) a
duly


 





















 


executed Stock Restriction
Agreement substantially in the form of Appendix A (unless such agreement would
have expired according to its terms), (iii) payment of the exercise price of
such Option Shares in the form of cash or, if
permitted by the Committee, qualified Common Shares, the surrender of another
outstanding Award under the Plan or any combination thereof, and (iv) payment
of any required withholding pursuant to Section 10. The Option shall be
deemed to have been exercised as of the close of business on the date the
required documents and required consideration are received by Gaiam. For
purposes of this Section 2, Common Shares shall be deemed to be “qualified”
Common Shares if they have been held by Grantee for six months or such other
period as set from time to time by the Board or the Committee.


 


Section 3.  Termination of Employment, Retirement, Disability or Death.


 


(a)           Vesting shall cease on the date Grantee ceases to be employed by the
Company.  Following Grantee’s last day of
employment with the Company, this Option shall only be exercisable for the
number of Option Shares that are vested as of Grantee’s last day of employment
with by the Company (less any Option Shares previously acquired upon exercise
of this Option).


 


(b)           Except
as provided in Section 3(c) or 3(d), following Grantee’s last day of employment
with the Company, this Option may be exercised at any time and from time to
time within the lesser of (i) the 30 day period commencing on the first day
after Grantee’s last day of employment with the Company or (ii) the remaining
term of the Option.


 


(c)           If
termination of employment occurs due to death or disability while Grantee is an
employee of the Company, then this Option may be exercised at any time and from
time to time within the lesser of (i) the one year period commencing on the
first day after Grantee’s last day of employment with the Company or (ii) the
remaining term of the Option.


 


(d)           If
termination of employment occurs due to retirement at or after normal
retirement age, as prescribed from time to time by the Company’s retirement
policy, or retirement under circumstances approved by the Committee (either
before or after retirement), then this Option may be exercised at any time
within the lesser of (i) the three month period commencing on the first day
after Grantee’s last day of employment with the Company, or, if Grantee dies
during the three month period commencing on the first day after Grantee’s last
day of employment with the Company, then the one year period commencing on the
first day after Grantee’s last day of employment with the Company, or (ii) the
remaining term of the Option.


 


Section 4.  Issuance and Delivery of Option Shares.  The
stock certificate(s) representing Option Shares shall be issued to Grantee
subject to satisfaction of the applicable tax withholding requirements set
forth in Section 10.  The issuance
of Option Shares shall be in accordance with the provisions of Section 5.


 


Section 5.  No Issuance of Option Shares if Violation.  Gaiam
shall not issue stock certificate(s) representing Option Shares if the
administrator of the Plan or its authorized agent determines, in its sole
discretion that the issuance of such certificate would violate the terms of the
Plan, this Agreement or applicable law.


 


Section 6.  Rights as an Employee or
Shareholder.  Except
as otherwise provided in the Plan, no person shall be, or have any of the
rights or privileges of, a shareholder of Gaiam with respect to any of the
Option Shares unless and until certificates representing such shares shall have
been issued and delivered to such person. 
Neither the Plan nor this Agreement shall be deemed to give Grantee any
right with respect to continued employment with the Company, nor shall the Plan
or the Agreement be deemed to limit in any way the Company’s right to terminate
Grantee’s employment at any time.


 


Section 7.  Nondisparagement and Further Assistance.  During Grantee’s
employment and thereafter, Grantee will not make any disclosure, issue any
public statements or otherwise cause to be disclosed any information which is
designed, intended or might reasonably be anticipated to discourage


 





















 


suppliers, customers or
employees of the Company or otherwise have a negative impact or adverse effect
on the Company.  Grantee will provide
assistance reasonably requested by the Company in connection with actions taken
by Grantee while employed by the Company, including but not limited to
assistance in connection with any lawsuits or other claims against the Company
arising from events during the period in which Grantee was employed.


 


Section 8.  Nondisclosure of Confidential Information; Non-Compete.  In
consideration of the receipt of the Option, Grantee agrees (i) not to disclose
to any third party any trade secrets or any other confidential information of
the Company (including but not limited to cost or pricing information, customer
lists, commission plans, supply information, internal business procedures,
market studies, expansion plans, potential acquisitions, terms of any
acquisition or potential acquisition or the existence of any negotiations
concerning the same or any similar non-public information relating to the
Company’s internal operations, business policies or practices) acquired during
Grantee’s employment by the Company or after the termination of such
employment, or (ii) use or permit the use of any of the Company’s trade secrets
or confidential information in any way to compete (directly or indirectly) with
the Company or in any other manner adverse to the Company.  In addition, Grantee agrees that, without the
prior written consent of the Company, signed by the Company’s Chief Executive
Officer, Grantee will not, during the term of Grantee’s employment by the
Company or for a period of two years thereafter (i) accept employment with,
serve as a consultant to, or accept compensation from any person, firm or
corporation (including any new business started by Grantee, either alone or
with others) whose products and or services compete with those offered by the
Company, in any geographic market in which the Company is then doing business
or to Grantee’s knowledge plans to do business, (ii) contact or solicit any
customers of the Company for the purposes of diverting any existing or future
business of such customers to a competing source, (iii) contact or solicit any
vendors to the Company (directly or indirectly) for the purpose of causing,
inviting or encouraging any such vendor to alter or terminate his, her or its
business relationship with the Company, or (iv) contact or solicit any
employees of the Company (directly or indirectly) for the purpose of causing,
inviting or encouraging any such employee to alter or terminate his, her or its
employment relationship with the Company.


 


The Company will be entitled to enforce its
rights under this Agreement specifically, to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights to
which it may be entitled.  Grantee agrees
and acknowledges that money damages may not be an adequate remedy for breach of
the provisions of this Agreement and that the Company may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent
any violations of the provisions of this Agreement.


 


Grantee agrees that this covenant is
reasonable with respect to its duration, geographic area and scope.  It is the desire and intent of the parties
that the provisions of this Section 8 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. 
Accordingly, if any particular portion of this Section 8 shall be adjudicated
to be invalid or unenforceable, this Section 8 shall be deemed amended to
delete therefrom the portion thus adjudicated to be invalid or unenforceable,
such deletion to apply only with respect to the operation of this Section 8 in
the particular jurisdiction in which such adjudication is made.


 


Section 9.  Securities Laws.  Grantee
acknowledges that applicable securities laws may restrict the right and govern
the manner in which Grantee may dispose of the Option Shares obtained upon
exercise of the Option and Grantee agrees not to offer, sell or otherwise
dispose of any such shares in a manner that would violate the Securities Act of
1933, as amended, or any other federal or state law.  Gaiam intends, within 12 months of its
initial public offering of shares, to file a registration statement on Form S-8
to register the shares to be issued upon exercise of this Option.


 


Section 10.  Income Taxes.  Grantee
acknowledges that when Grantee is required to recognize income for federal,
state or local income tax purposes on account of the grant, vesting and/or
exercise of the Option, pursuant to this Agreement, that such income shall be
subject to withholding of tax by the Company. 
Grantee agrees that the Company may either withhold an appropriate
amount from any


 





















 


compensation or any other
payment of any kind then payable or that may become payable to Grantee or,
require Grantee to make a cash payment to the Company equal to the amount of
withholding required in the opinion of the Company.  In the event Grantee does not make such
payment when requested, the Company may refuse to issue or cause to be
delivered any shares under this Agreement or any other incentive plan agreement
entered into by Grantee and the Company until such payment has been made or
arrangements for such payment satisfactory to the Company have been made.  Grantee agrees further to notify the Company
promptly if Grantee files an election pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended, with respect to any Option Shares.


 


Section 11.  Prohibition on Transfer or Assignment.  Except
as provided in the Plan, neither this Agreement nor the Option may be
transferred or assigned, other than an assignment by will or by laws of descent
and distribution, and this Option shall be exercisable during the Grantee’s lifetime
only by Grantee or by such permitted assignee.


 


Section 12.  Binding Effect; No Third
Party Beneficiaries.  This Agreement shall be binding upon and inure to the
benefit of the Company and Grantee and their respective heirs, representatives,
successors and permitted assigns.  This
Agreement shall not confer any rights or remedies upon any person other than
Gaiam and the Grantee and their respective heirs, representatives, successors
and permitted assigns.  The parties agree
that this Agreement shall survive the exercise or termination of the Option.


 


Section 13.  Agreement to Abide by
Plan; Conflict between Plan and Agreement.  The Plan is hereby incorporated
by reference into this Agreement and made a part hereof as though fully set
forth in this Agreement.  Grantee, by
execution of this Agreement, (i) represents that he is familiar with the terms
and provisions of the Plan and (ii) agrees to abide by all of the terms and
conditions of this Agreement and the Plan. 
Grantee accepts as binding, conclusive and final all decisions or
interpretations of the administrator of the Plan upon any question arising
under the Plan and this Agreement (including, without limitation, the cause of
any termination of Grantee’s employment with the Company).  In the event of any conflict between the Plan
and this Agreement, the Plan shall control and this Agreement shall be deemed
to be modified accordingly.


 


Section 14.  Entire Agreement.  This Agreement constitutes the
entire agreement between the parties and supersedes any prior understandings,
agreements, or representations by or between the parties, written or oral, to
the extent they related in any way to the subject matter hereof.


 


Section 15.  Choice of Law.  To the
extent not superseded by federal law, the laws of the state of Colorado shall
control in all matters relating to this Agreement and any action relating to
this Agreement must be brought in Denver, Colorado.


 


Section 16.  Notice.  All notices, requests, demands,
claims, and other communications under this Agreement shall be in writing.  Any notice, request, demand, claim, or other
communication under this Agreement shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient at the
address set forth below the recipient’s signature to this Agreement.  Either party to this Agreement may send any
notice, request, demand, claim, or other communication under this Agreement to
the intended recipient at such address using any other means (including
personal delivery, expedited courier, messenger service, telecopy, ordinary
mail, or electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Either party to this Agreement
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other party notice
in the manner set forth in this section.


 


Section 17.  Counterparts.  This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.


 





















 


EXECUTED as of the
date of grant set forth above.


 


 


	
  GAIAM, INC.

  	
   

  	
  GRANTEE

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  {Executive Officer}

  	
   

  	
  {Employee’s name}

  
	
   

  	
   

  	
   

  
	
  Address: 

  	
  360 Interlocken Blvd.

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
  Broomfield, Colorado 80021

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attn.: Stock Option Administration

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Social Security No.