**EXHIBIT 10.1**

 

**GAIAM,INC.**

 

#### EmployeeStock Option Agreement

####  

ThisStock Option Agreement set forth below (this “Agreement”) is dated as of thedate of grant set forth below and is between Gaiam, Inc., a Coloradocorporation (“Gaiam”), and the above named individual (the “Grantee”).

 

Gaiamhas established its 1999 Long-Term Incentive Plan (the “Plan”) to advance theinterests of Gaiam and its shareholders by providing incentives to certaineligible persons who contribute significantly to the strategic and long-termperformance objectives and growth of Gaiam and any parent or subsidiary ofGaiam.

 

ThisAgreement 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. |

 

Pursuantto the provisions of the Plan, the Board of Directors of Gaiam (the “Board”) ora Committee designated by the Board (the “Committee”) has full power andauthority to direct the execution and delivery of this Agreement in the nameand on behalf of Gaiam.  The Board or theCommittee authorized the execution and delivery of this Agreement. Allcapitalized terms not otherwise defined in this Agreement have the same meaninggiven 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 andin the Plan, Gaiam hereby grants to Grantee an option (the “***Option***”) to purchase the number ofshares (the “***Option Shares***”) of Gaiam’sClass A common stock, par value $0.0001 per share (the “***CommonShares***”), set forth above, at the exercise price set forthabove.  Except as otherwise provided inthis Agreement or the Plan, the Option may not be exercised after the close ofbusiness on the expiration date set forth above. Grantee hereby accepts theOption on such terms and conditions, including, without limitation, theconfidentiality and non-compete provisions set forth in Section 8 of thisAgreement.  The Option is a Nonqualified StockOption (as such term is defined in the Plan). Grantee shall, subject to thelimitations of this Agreement and the Plan, have the right to exercise theOption by purchasing all or any part of the vested Option Shares then availablefor purchase under the vesting schedule set forth above (less any Option Sharespreviously purchased upon exercise of this Option).

 

**Section 2.  *Procedures for Exercise***.  Granteeshall 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) aduly

 

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executed Stock RestrictionAgreement substantially in the form of Appendix A (unless such agreement wouldhave expired according to its terms), (iii) payment of the exercise price ofsuch Option Shares in the form of cash or, ifpermitted by the Committee, qualified Common Shares, the surrender of anotheroutstanding Award under the Plan or any combination thereof, and (iv) paymentof any required withholding pursuant to Section 10. The Option shall bedeemed to have been exercised as of the close of business on the date therequired documents and required consideration are received by Gaiam. Forpurposes 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 otherperiod 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 theCompany.  Following Grantee’s last day ofemployment with the Company, this Option shall only be exercisable for thenumber of Option Shares that are vested as of Grantee’s last day of employmentwith by the Company (less any Option Shares previously acquired upon exerciseof this Option).

 

(b)           Exceptas provided in Section 3(c) or 3(d), following Grantee’s last day of employmentwith the Company, this Option may be exercised at any time and from time totime within the lesser of (i) the 30 day period commencing on the first dayafter Grantee’s last day of employment with the Company or (ii) the remainingterm of the Option.

 

(c)           Iftermination of employment occurs due to death or disability while Grantee is anemployee of the Company, then this Option may be exercised at any time and fromtime to time within the lesser of (i) the one year period commencing on thefirst day after Grantee’s last day of employment with the Company or (ii) theremaining term of the Option.

 

(d)           Iftermination of employment occurs due to retirement at or after normalretirement age, as prescribed from time to time by the Company’s retirementpolicy, or retirement under circumstances approved by the Committee (eitherbefore or after retirement), then this Option may be exercised at any timewithin the lesser of (i) the three month period commencing on the first dayafter Grantee’s last day of employment with the Company, or, if Grantee diesduring the three month period commencing on the first day after Grantee’s lastday of employment with the Company, then the one year period commencing on thefirst day after Grantee’s last day of employment with the Company, or (ii) theremaining term of the Option.

 

**Section 4.  *Issuance and Delivery of Option Shares***.  Thestock certificate(s) representing Option Shares shall be issued to Granteesubject to satisfaction of the applicable tax withholding requirements setforth in Section 10.  The issuanceof Option Shares shall be in accordance with the provisions of Section 5.

 

**Section 5.  *No Issuance of Option Shares if Violation***.  Gaiamshall not issue stock certificate(s) representing Option Shares if theadministrator of the Plan or its authorized agent determines, in its solediscretion that the issuance of such certificate would violate the terms of thePlan, this Agreement or applicable law.

 

**Section 6.  *Rights as an Employee orShareholder***.  Exceptas otherwise provided in the Plan, no person shall be, or have any of therights or privileges of, a shareholder of Gaiam with respect to any of theOption Shares unless and until certificates representing such shares shall havebeen issued and delivered to such person. Neither the Plan nor this Agreement shall be deemed to give Grantee anyright with respect to continued employment with the Company, nor shall the Planor the Agreement be deemed to limit in any way the Company’s right to terminateGrantee’s employment at any time.

 

**Section 7.  *Nondisparagement and Further Assistance****.*  During Grantee’semployment and thereafter, Grantee will not make any disclosure, issue anypublic statements or otherwise cause to be disclosed any information which isdesigned, intended or might reasonably be anticipated to discourage

 

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suppliers, customers oremployees of the Company or otherwise have a negative impact or adverse effecton the Company.  Grantee will provideassistance reasonably requested by the Company in connection with actions takenby Grantee while employed by the Company, including but not limited toassistance in connection with any lawsuits or other claims against the Companyarising from events during the period in which Grantee was employed.

 

**Section 8.  *Nondisclosure of Confidential Information; Non-Compete***.  Inconsideration of the receipt of the Option, Grantee agrees (i) not to discloseto any third party any trade secrets or any other confidential information ofthe Company (including but not limited to cost or pricing information, customerlists, commission plans, supply information, internal business procedures,market studies, expansion plans, potential acquisitions, terms of anyacquisition or potential acquisition or the existence of any negotiationsconcerning the same or any similar non-public information relating to theCompany’s internal operations, business policies or practices) acquired duringGrantee’s employment by the Company or after the termination of suchemployment, or (ii) use or permit the use of any of the Company’s trade secretsor confidential information in any way to compete (directly or indirectly) withthe Company or in any other manner adverse to the Company.  In addition, Grantee agrees that, without theprior written consent of the Company, signed by the Company’s Chief ExecutiveOfficer, Grantee will not, during the term of Grantee’s employment by theCompany or for a period of two years thereafter (i) accept employment with,serve as a consultant to, or accept compensation from any person, firm orcorporation (including any new business started by Grantee, either alone orwith others) whose products and or services compete with those offered by theCompany, in any geographic market in which the Company is then doing businessor to Grantee’s knowledge plans to do business, (ii) contact or solicit anycustomers of the Company for the purposes of diverting any existing or futurebusiness of such customers to a competing source, (iii) contact or solicit anyvendors to the Company (directly or indirectly) for the purpose of causing,inviting or encouraging any such vendor to alter or terminate his, her or itsbusiness relationship with the Company, or (iv) contact or solicit anyemployees of the Company (directly or indirectly) for the purpose of causing,inviting or encouraging any such employee to alter or terminate his, her or itsemployment relationship with the Company.

 

The Company will be entitled to enforce itsrights under this Agreement specifically, to recover damages by reason of anybreach of any provision of this Agreement and to exercise all other rights towhich it may be entitled.  Grantee agreesand acknowledges that money damages may not be an adequate remedy for breach ofthe provisions of this Agreement and that the Company may in its solediscretion apply to any court of law or equity of competent jurisdiction forspecific performance and/or injunctive relief in order to enforce or preventany violations of the provisions of this Agreement.

 

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

 

**Section 9.  *Securities Laws***.  Granteeacknowledges that applicable securities laws may restrict the right and governthe manner in which Grantee may dispose of the Option Shares obtained uponexercise of the Option and Grantee agrees not to offer, sell or otherwisedispose of any such shares in a manner that would violate the Securities Act of1933, as amended, or any other federal or state law.  Gaiam intends, within 12 months of itsinitial public offering of shares, to file a registration statement on Form S-8to register the shares to be issued upon exercise of this Option.

 

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

 

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compensation or any otherpayment 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 ofwithholding required in the opinion of the Company.  In the event Grantee does not make suchpayment when requested, the Company may refuse to issue or cause to bedelivered any shares under this Agreement or any other incentive plan agreemententered into by Grantee and the Company until such payment has been made orarrangements for such payment satisfactory to the Company have been made.  Grantee agrees further to notify the Companypromptly if Grantee files an election pursuant to Section 83(b) of the InternalRevenue Code of 1986, as amended, with respect to any Option Shares.

 

**Section 11.  *Prohibition on Transfer or Assignment***.  Exceptas provided in the Plan, neither this Agreement nor the Option may betransferred or assigned, other than an assignment by will or by laws of descentand distribution, and this Option shall be exercisable during the Grantee’s lifetimeonly by Grantee or by such permitted assignee.

 

**Section 12.  *Binding Effect; No ThirdParty Beneficiaries***.  This Agreement shall be binding upon and inure to thebenefit of the Company and Grantee and their respective heirs, representatives,successors and permitted assigns.  ThisAgreement shall not confer any rights or remedies upon any person other thanGaiam and the Grantee and their respective heirs, representatives, successorsand permitted assigns.  The parties agreethat this Agreement shall survive the exercise or termination of the Option.

 

**Section 13.  *Agreement to Abide byPlan; Conflict between Plan and Agreement***.  The Plan is hereby incorporatedby reference into this Agreement and made a part hereof as though fully setforth in this Agreement.  Grantee, byexecution of this Agreement, (i) represents that he is familiar with the termsand provisions of the Plan and (ii) agrees to abide by all of the terms andconditions of this Agreement and the Plan. Grantee accepts as binding, conclusive and final all decisions orinterpretations of the administrator of the Plan upon any question arisingunder the Plan and this Agreement (including, without limitation, the cause ofany termination of Grantee’s employment with the Company).  In the event of any conflict between the Planand this Agreement, the Plan shall control and this Agreement shall be deemedto be modified accordingly.

 

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

 

**Section 15.  *Choice of Law***.  To theextent not superseded by federal law, the laws of the state of Colorado shallcontrol in all matters relating to this Agreement and any action relating tothis 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 othercommunication under this Agreement shall be deemed duly given if (and then twobusiness days after) it is sent by registered or certified mail, return receiptrequested, postage prepaid, and addressed to the intended recipient at theaddress set forth below the recipient’s signature to this Agreement.  Either party to this Agreement may send anynotice, request, demand, claim, or other communication under this Agreement tothe intended recipient at such address using any other means (includingpersonal delivery, expedited courier, messenger service, telecopy, ordinarymail, or electronic mail), but no such notice, request, demand, claim, or othercommunication shall be deemed to have been duly given unless and until itactually is received by the intended recipient. Either party to this Agreementmay change the address to which notices, requests, demands, claims, and othercommunications hereunder are to be delivered by giving the other party noticein the manner set forth in this section.

 

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

 

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**EXECUTED**as of thedate 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. |   |   |
|                 |                                      |             |  |  |  |  |  |  |  |

 

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