Exhibit
10.24


 


AMENDMENT
TO NON-QUALIFIED STOCK OPTION AGREEMENT


 


 


WHEREAS,
the parties hereto desire to amend all outstanding Non-Qualified Stock Option
Agreements (collectively, the “Agreement”), by and between DIGITAL RIVER, INC., a Delaware corporation (the “Company”),
and [name of Optionee].


 


NOW, THEREFORE,
effective as of the date hereof, the Agreement is hereby amended to include the
following provisions:


 


1.             Special
Acceleration.


 


(a)           Notwithstanding
any provision in the Agreement or the plan pursuant to which the Agreement was
issued (the “Plan”) to the contrary, upon a Change in Control (as defined in
Section 1(b)), the vesting of this Option shall be accelerated in full and the
Option shall be fully exercisable.


 


(b)           For
purposes of this Agreement, a “Change in Control” of the Company shall mean any
of the following:  (A)  individuals
who constitute the Board of Directors on the date hereof (the “Incumbent Board”)
cease for any reason to constitute at least a majority thereof, provided that
any person becoming a director subsequent to the date hereof whose election was
approved by a vote of at least a majority of the directors comprising the
Incumbent Board (or directors elected by the process set forth in this
clause (A)), shall be, for purposes of this clause (A), considered as
though he were a member of the Incumbent Board; or (B) a sale of all or
substantially all of the assets of the Company, (C) a plan of
reorganization, merger or consolidation or similar transaction occurs in which
the stockholders of the Company prior to such transaction do not continue to
hold, as a result of shares of capital stock of the Company held by them prior
to such transaction, a majority of the voting power of the capital stock of the
surviving corporation or entity; (D) a proxy statement shall be
distributed soliciting proxies from stockholders of the Company, by someone
other than the current management of the Company, seeking stockholder approval
of a plan of reorganization, merger or consolidation of the Company with one or
more entities as a result of which the outstanding shares of the class of
securities then subject to such a plan or transaction are subsequently
exchanged for or converted into cash or property or securities not issued by
the Company shall be distributed; or (E) a tender offer is completed for
50% or more of the voting securities of the Company then outstanding.


 


(c)           If
any payment or benefit the Optionee would receive pursuant to a Change in
Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Code


 


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and (ii) but for
this sentence, be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), then such Payment shall be equal to the Reduced
Amount.  The “Reduced Amount” shall be
either (x) the largest portion of the Payment that would result in no portion
of the Payment being subject to the Excise Tax or (y) the largest portion, up
to and including the total, of the Payment, whichever amount, after taking into
account all applicable federal, state and local employment taxes, income taxes
and the Excise Tax (all computed at the highest applicable marginal rate),
results in the Optionee’s receipt, on an after-tax basis, of the greater amount
of the Payment notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute
payments” is necessary so that the Payment equals the Reduced Amount, reduction
shall occur in the following order unless the Optionee elects in writing a
different order (provided, however, that such
election shall be subject to Company approval if made on or after the effective
date of the event that triggers the Payment): reduction of cash payments;
cancellation of accelerated vesting of Options; reduction of employee
benefits.  In the event that acceleration
of vesting of Option compensation is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of grant of the
Optionee’s options (i.e., earliest granted option cancelled last) unless the
Optionee elects in writing a different order for cancellation.


 


The Company shall appoint a nationally recognized accounting
firm to perform the foregoing calculations. 
The Company shall bear all expenses with respect to the determinations
by such accounting firm required to be made hereunder.


 


The accounting firm engaged to make the determinations
hereunder shall provide its calculations, together with detailed supporting
documentation, to the Optionee and the Company within fifteen (15) calendar
days after the date on which the Optionee’s right to a Payment is triggered (if
requested at that time by the Optionee or the Company) or such other time as
requested by the Optionee or the Company. 
If the accounting firm determines that no Excise Tax is payable with
respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish the Optionee and the Company with an opinion
reasonably acceptable to the Optionee that no Excise Tax will be imposed with
respect to such Payment.  Any good faith
determinations of the accounting firm made hereunder shall be final, binding
and conclusive upon the Optionee and the Company.


 


I acknowledge by my signature below
that I understand that any acceleration of benefits under this Section 1 is
likely to trigger excise tax obligations, as described above, under the
Internal Revenue Code.


 


Except as
otherwise provided herein, the Agreement is hereby ratified and confirmed and
shall continue in full force and effect.


 


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IN WITNESS WHEREOF, this Amendment is executed this          
day of August, 2005.


 


	
   

  	
   

  	
  DIGITAL RIVER, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Joel A. Ronning

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “OPTIONEE”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


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