EXHIBIT 10.16


 


[EMPLOYEES]


 


RESTRICTED STOCK UNIT 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 Unit Award
under the Plan;


 


NOW, THEREFORE, IT IS AGREED, by and between
the Company and the Grantee, as follows:


 


1.             Award of Restricted Stock Units


 


1.1           The
Company hereby grants to the Grantee an award of                   
restricted stock units (“RSUs”), subject to, and in accordance with, the
restrictions, terms and conditions set forth in this Agreement.  This award of RSUs represents the right to
receive a Share for each RSU, subject to satisfying the vesting and other
conditions set forth in this Agreement. 
The grant date of this award of RSUs is                                   (“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 Section 2.2 below, if the Grantee remains employed by the Company or a
Subsidiary, the Grantee shall become vested in the RSUs as follows:            %
of the RSUs shall vest on each                     
of the Grant Date (each such date shall be a “Vesting Date”) such that on                         
(the “Final Vesting Date”) all of the RSUs shall be fully vested.  On each Vesting Date,  the Vested Shares shall be issued and
registered in the Grantee’s name, and Grantee shall own the Vested Shares free
and clear of all restrictions imposed by this Agreement (except those imposed
by Section 3.3 below).  In the event,
prior to the Final Vesting Date, Grantee’s employment is terminated by the
Company or Grantee terminates employment (for any reason, including death or
Disability), the RSUs shall cease to vest further and Grantee shall only be
entitled to the Shares that are vested as of Grantee’s date of
termination.  For purposes of


 





















 


this Agreement, employment with any
Subsidiary of the Company, or service as a Director of the Company or any
Subsidiary of the Company, shall be considered employment with the Company, and
references to employment by the Company or termination of employment by or with
the Company, shall include such employment by a Subsidiary or service as a Director.


 


2.2           Except
as hereinafter provided, upon the occurrence of a Change in Control prior to
the Grantee’s Final Vesting Date, all outstanding unvested RSUs shall become
immediately and fully vested and nonforfeitable as of the date of the Change in
Control and the Company shall deliver to Grantee a certificate(s) for such
Shares, free and clear of any restriction imposed by this Agreement.  However, notwithstanding the forgoing
sentence, the vesting of outstanding unvested RSUs shall not so accelerate if
and to the extent: (i) such RSUs are, in connection with a Corporate
Transaction (as defined in Section 2.6(c) of the Plan and excluding Corporate
Transactions which do not constitute a Change in Control), either to be assumed
by the successor corporation (or parent thereof) or to be replaced with a
comparable award of RSUs of the capital stock of the successor corporation (or
parent thereof), (ii) such award of RSUs is to be replaced with a cash
incentive program of the successor corporation which preserves the value of the
unvested RSUs at the time of the Corporate Transaction and provides for
subsequent vesting in accordance with the same vesting schedule applicable to
such RSUs, or (iii) the acceleration of the vesting of such RSUs is subject to
other limitations imposed by the Committee at the time of the RSU grant.  The determination of comparability under
clause (i) above shall be made by the Committee as constituted prior to the
Change in Control, and its determination shall be final, binding and conclusive.  If the successor company (or parent thereof)
assumes the outstanding award of RSUs in connection with a Corporate
Transaction, and at the time of or within                     
following such Corporate Transaction: (i) the Grantee is offered a Lesser
Position (as hereinafter defined) in replacement of the position held by him
immediately prior to the Corporate Transaction; or (ii) the Grantee’s service
terminates by reason of an Involuntary Termination (as hereinafter defined),
then, effective as of the date on which such Lesser Position is offered to the
Grantee or the effective date of such Involuntary Termination, respectively,
the vesting of the RSUs shall automatically accelerate in part so that, in
addition to the number of RSUs which have vested at such time, the forfeiture
rights respecting the RSUs shall expire with respect to                                             
of the unvested RSUs but not exceeding the unvested portion of such grant.  Following such acceleration, to the extent the
Grantee continues in service, the vesting schedule for the RSUs shall continue
under the original vesting schedule, except for the                                                 .  In the event that both the offer of a Lesser
Position and a subsequent Involuntary Termination of a Grantee’s Service occur
within                     
following a Corporate Transaction, then acceleration of vesting shall occur
only in connection with the offer of such Lesser Position and no additional
acceleration shall occur in connection with such subsequent Involuntary
Termination.


 


The following
definitions shall apply for purposes of this Agreement:


 


“Involuntary Termination”  shall mean the termination of Grantee’s
service which occurs by reason of: (i) Grantee’s involuntary dismissal or
discharge by the Company for reasons other than Cause, or (ii) Grantee’s
voluntary resignation following the offer to Grantee of a Lesser Position in
replacement of the position held by Grantee immediately prior to the Corporate
Transaction.


 


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“Lesser Position” for Grantee shall mean a
new position or a change to Grantee’s position which, compared with Grantee’s
position with the Company immediately prior to the Corporate Transaction, (i)
offers a lower level of compensation (including base salary, fringe benefits
and target bonuses under any corporate-performance based bonus or incentive
programs), or (ii) materially reduces Grantee’s duties or level of
responsibility, or (iii) assigns Grantee to an office more than   
miles from the Company’s office at which Grantee served prior to the Corporate
Transaction.


 


2.3           The
RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered
prior to the date Grantee becomes vested in the RSUs.


 


3.             Rights As Shareholder


 


3.1           Except
as provided in Section 3.2, the Grantee shall not have voting or any other
rights as a shareholder of the Company with respect to the RSUs.  Upon settlement of the RSUs with the issuance
of Shares, the Grantee will obtain full voting and other rights as a
shareholder of the Company.


 


3.2           In
the event of a change in capitalization as provided in Section 4.3 of the Plan,
the number and class of RSUs and Shares or other securities that Grantee shall
be entitled to pursuant to this Agreement shall be appropriately adjusted or
changed to reflect the change in capitalization, provided that any such
additional RSUs, Shares or additional or different shares or securities shall
remain subject to the restrictions in this Agreement.


 


3.3           The
Grantee represents and warrants that he is acquiring the Shares under this
Agreement for investment purposes only, and not with a view to distribution
thereof.  The Grantee is aware that the
Shares may not be registered under the federal or any state securities laws and
that, in addition to the other restrictions on the Shares, the Shares will not
be able to be transferred unless an exemption from registration is
available.  By making this award of RSUs,
the Company is not undertaking any obligation to register the Shares under any
federal or state securities laws.


 


4.             No Right to Continued Employment


 


Nothing in this Agreement or the Plan shall
be interpreted or construed to confer upon the Grantee any right with respect
to continuance of employment by 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 employment 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
RSUs and any employment taxes payable by Grantee as an employee.  The Company shall have the right to retain
and withhold from any payment of Shares 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


 


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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 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.


 


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.


 


12.          Transfer of Data


 


In order to effectively administer the
Company’s global compensation and benefit programs, the Company may transfer
personal data from your Company employment file to a


 


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centralized
repository controlled by the Company in the United States of America.  Your personal data in the repository will be
used solely for internal Company purposes. 
You may examine your employee information file should you wish to do
so.  By signing this agreement, you
provide your consent to this transfer and use of this data.


 


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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