Document:

Exhibit 10.2(f)

 

[Form of
Director Non-qualified Stock Option Award Pursuant to

1996 Stock Incentive Plan]

 

NONQUALIFIED
STOCK OPTION AWARD

PURSUANT
TO THE NETBANK, INC.

1996
STOCK INCENTIVE PLAN

 

THIS AWARD is made as of
the Grant Date by NETBANK, INC. (the “Company”) to                                       
(the “Optionee”).

 

Upon and subject to the
Terms and Conditions attached hereto and incorporated herein by reference, the
Company hereby awards as of the Grant Date to Optionee a nonqualified incentive
stock option (the “Option”), as described below, to purchase the Option Shares.

 

A.                                   Grant
Date:

 

B.                                     Type
of Option:  Nonqualified Stock Option,
granted pursuant to the NetBank, Inc. 1996 Stock Incentive Plan (the “Plan”).

 

C.                                     Option
Shares:  All or any part of                       
shares of the Company’s common stock, $.01 par value per share (“Common Stock”),
subject to adjustment as provided in the attached Terms and Conditions.

 

D.                                    Exercise
Price:  $            
per share of Common Stock, subject to adjustment as provided in the attached
Terms and Conditions.

 

E.                                      Option
Period:  The Option may be exercised as
to all or any portion of the Vested Option Shares, but only during the Option
Period, which commences on the Grant Date and ends, generally, on the earliest
of (a) the tenth (10th) anniversary of the Grant Date; or (b) the
later of the date (i) ninety (90) days following the date the Optionee
ceases to be a director of the Company for any reason other than death or
Disability, or (ii) twelve months following the date the Optionee ceases
to be a director of the Company due to death or Disability; provided that the
Option may be exercised as to no more than the Vested Option Shares, determined
pursuant to Section 3 of the attached Terms and Conditions.  Note that other
limitations to exercising the Option, as described in the attached Terms and
Conditions, may apply.

 

1

 

IN WITNESS WHEREOF, the
Company has executed and sealed this Award as of the Grant Date set forth
above.

 

 

	
   

  	
  NETBANK, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Douglas K. Freeman

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

2

 

TERMS AND
CONDITIONS TO THE

NONQUALIFIED
STOCK OPTION AWARD

PURSUANT
TO THE NETBANK, INC.

1996
STOCK INCENTIVE PLAN

 

1.                                       Exercise
of Option.  Subject to the provisions
provided herein or in the Award made pursuant to the Plan:

 

(a)                                  the Option may be
exercised with respect to all or any portion of the Vested Option Shares at any
time during the Option Period by the delivery to the Company, at its principal
place of business, of a written notice of exercise in substantially the form
attached hereto as Exhibit 1, which shall be actually delivered to the
Company no earlier than thirty (30) days and no later than ten (10) days
prior to the date upon which Optionee desires to exercise all or any portion of
the Option; and

 

(b)                                 payment to the Company
of the Exercise Price multiplied by
the number of Option Shares being purchased (the “Purchase Price”) as
provided in Section 2; and

 

(c)                                  payment
of any tax withholding liability pursuant to Section 4 below.

 

Upon acceptance of such
notice and receipt of payment in full of the Purchase Price and tax withholding
liability, the Company shall cause to be issued a certificate representing the
Vested Option Shares purchased.

 

The Company may, from
time to time, establish other methods for exercise of Options, whether
electronically, through an agent or otherwise, as may be communicated to the Optionee.

 

2.                                       Purchase
Price.  Payment of the Purchase Price
for all Vested Option Shares purchased pursuant to the exercise of an Option
shall be made in cash or certified check or, alternatively, as follows:

 

(a)                                  by delivery to the
Company of a number of shares of Common Stock which have been owned by the
Optionee for at least six (6) months prior to the date of the Option’s
exercise having a Fair Market Value, as determined under the Plan, on the date
of exercise either equal to the Purchase Price or in combination with cash or a
certified check to equal the Purchase Price; or

 

(b)                                 by receipt of the
Purchase Price in cash from a broker, dealer or other “creditor” as defined by
Regulation T issued by the Board of Governors of the Federal Reserve
System following delivery by the Optionee to the Committee of instructions in a
form acceptable to the Committee regarding delivery to such broker, dealer or
other creditor of that number of Option Shares with respect to which the Option
is exercised; or

 

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(c)                                  any combination of
the foregoing.

 

3.                                       Vested
Option Shares.  The Option Shares
shall become Vested Option Shares upon the date of grant.

 

4.                                       Withholding.  The Optionee must satisfy any federal, state
and local, if any, withholding taxes imposed by reason of the exercise of the
Option by paying to the Company the full amount of the withholding obligation
in cash or by certified check.  In lieu
of paying the withholding obligation in cash or by certified check, the
Optionee may elect (i) to tender to the Company the smallest number of
whole shares of Common Stock which have been owned by the Optionee for at least
six (6) months prior to the date of the Option’s exercise having a Fair
Market Value as of the date of the Option exercise, as determined under the
Plan, sufficient to satisfy the amount of the withholding tax; or (ii) irrevocably
and in writing, in substantially the form attached hereto as Exhibit 2, to
have the actual numbers of shares of Stock issuable upon exercise reduced by
the smallest number of whole shares of Stock which, when multiplied by the Fair
Market Value of the Common Stock as of the date the Option is exercised, is
sufficient to satisfy the amount of the withholding tax (either election is referred
to below as a “Withholding Election”). 
The Optionee may make a Withholding Election only if the following
conditions are met:

 

(a)                                  the Withholding Election is made on or prior to the
date on which the amount of tax required to be withheld is determined (the “Tax
Date”) by executing and delivering to the Company a properly completed
Withholding Election; and

 

(b)                                 any Withholding Election made will be irrevocable;
however, the Committee may, in its sole discretion, disapprove and give no
effect to any Withholding Election.

 

5.                                       Rights
as Shareholder.  Until the stock
certificates reflecting the Option Shares accruing to the Optionee upon
exercise of the Option are issued to the Optionee, the Optionee shall have no
rights as a shareholder with respect to such Option Shares.  The Company shall make no adjustment for any
dividends or distributions or other rights on or with respect to Option Shares
for which the record date is prior to the issuance of that stock certificate,
except as the Plan or the attached Award otherwise provides.

 

6.                                       Restriction
on Transfer of Option and of Option Shares. 
The Option evidenced hereby is nontransferable other than by will or the
laws of descent and distribution and shall be exercisable during the lifetime
of the Optionee only by the Optionee (or in the event of his disability, by his
personal representative) and after his death, only by his legatee or the
executor of his estate.

 

4

 

7.                                       Changes
in Capitalization.

 

(a)                                  The number of Option
Shares and the Exercise Price shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision or combination of shares or the payment of a stock dividend
in shares of Common Stock to holders of outstanding shares of Common Stock or
any other increase or decrease in the number of shares of Common Stock
outstanding effected without receipt of consideration by the Company.

 

(b)                                 If the Company shall
be the surviving corporation in any merger or consolidation, recapitalization,
reclassification of shares or similar reorganization, the Optionee shall be
entitled to purchase or receive the number and class of securities to which a
holder of the number of shares of Common Stock subject to the Option at the
time of such transaction would have been entitled to receive as a result of
such transaction, and a corresponding adjustment shall be made in the Exercise
Price.  A dissolution or liquidation of
the Company shall cause the Option to terminate as to any portion thereof not
exercised as of the effective date of the dissolution or liquidation.  In the event of a sale of substantially all
of the Common Stock or property of the Company or the merger or consolidation
or any other reorganization, including a Change in Control of the Company in
which the Company is not the surviving entity, the Option Shares shall become
fully vested on the date determined by the Committee prior to the effective
date of the Change in Control, but no less than thirty days (30) prior to the
effective date of the Change in Control.

 

(c)                                  The existence of the
Plan and the Option granted pursuant to this Award shall not affect in any way
the right or power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Common Stock or the rights thereof, the dissolution
or liquidation of the Company, any sale or transfer of all or any part of its
business or assets, or any other corporate act or proceeding. Any adjustment
pursuant to this Section may provide, in the Committee’s discretion, for
the elimination without payment therefor of any fractional shares that might
otherwise become subject to any Option.

 

8.                                       Special
Limitation on Exercise.  No purported
exercise of the Option shall be effective without the approval of the
Committee, which may be withheld to the extent that the exercise, either
individually or in the aggregate together with the exercise of other previously
exercised stock options and/or offers and sales pursuant to any prior or
contemplated offering of securities, would, in the sole and absolute judgment
of the Committee, require the filing of a registration statement with the
United States Securities and Exchange Commission or with the securities
commission of any state.  If a
registration statement is not in effect under the Securities

 

5

 

Act of 1933 or any
applicable state securities law with respect to shares of Common Stock
purchasable or otherwise deliverable under the Option, the Optionee (a) shall
deliver to the Company, prior to the exercise of the Option or as a condition
to the delivery of Common Stock pursuant to the exercise of an Option exercise,
such information, representations and warranties as the Company may reasonably
request in order for the Company to be able to satisfy itself that the Option
Shares are being acquired in accordance with the terms of an applicable
exemption from the securities registration requirements of applicable federal
and state securities laws and (b) shall agree that the shares of Common
Stock so acquired will not be disposed of except pursuant to an effective
registration statement, unless the Company shall have received an opinion of
counsel that such disposition is exempt from such requirement under the
Securities Act of 1933 and any applicable state securities law.

 

9.                                       Legend
on Stock Certificates.  Certificates
evidencing the Option Shares, to the extent appropriate at the time, shall have
noted conspicuously on the certificates a legend intended to give all persons
full notice of the existence of the conditions, restrictions, rights and
obligations set forth herein and in the Plan.

 

10.                                 Governing
Laws.  This Award and the Terms and
Conditions shall be construed, administered and enforced according to the laws
of the State of Georgia.

 

11.                                 Successors.  This Award and the Terms and Conditions shall
be binding upon and inure to the benefit of the heirs, legal representatives,
successors and permitted assigns of the Optionee and the Company.

 

12.                                 Notice.  Except as otherwise specified herein, all
notices and other communications under this Award shall be in writing and shall
be deemed to have been given if personally delivered or if sent by registered
or certified United States mail, return receipt requested, postage prepaid,
addressed to the proposed recipient at the last known address of the
recipient.  Any party may designate any
other address to which notices shall be sent by giving notice of the address to
the other parties in the same manner as provided herein.

 

13.                                 Severability.  In the event that any one or more of the
provisions or portion thereof contained in the Award and these Terms and
Conditions shall for any reason be held to be invalid, illegal or unenforceable
in any respect, the same shall not invalidate or otherwise affect any other
provisions of the Award and these Terms and Conditions, and the Award and these
Terms and Conditions shall be construed as if the invalid, illegal or
unenforceable provision or portion thereof had never been contained herein.

 

14.                                 Entire
Agreement.  Subject to the terms and
conditions of the Plan, the Award and the Terms and Conditions express the
entire understanding of the parties with respect to the Option.

 

15.                                 Violation.  Any transfer, pledge, sale, assignment, or
hypothecation of the Option or

 

6

 

any portion thereof shall
be a violation of the terms of the Award or these Terms and Conditions and
shall be void and without effect.

 

16.                                 Headings
and Capitalized Terms.  Section headings
used herein are for convenience of reference only and shall not be considered
in construing the Award or these Terms and Conditions.  Capitalized terms used, but not defined, in
either the Award or the Terms and Conditions shall be given the meaning
ascribed to them in the Plan.

 

17.                                 Specific
Performance.  In the event of any
actual or threatened default in, or breach of, any of the terms, conditions and
provisions of the Award and these Terms and Conditions, the party or parties
who are thereby aggrieved shall have the right to specific performance and
injunction in addition to any and all other rights and remedies at law or in
equity, and all such rights and remedies shall be cumulative.

 

18.                                 No
Right to Continued Retention. 
Neither the establishment of the Plan nor the award of Option Shares
hereunder shall be construed as giving the Optionee the right to continue as a
director of the Company or any affiliate.

 

7

 

EXHIBIT 1

 

NOTICE OF
EXERCISE OF

STOCK
OPTION TO PURCHASE

COMMON
STOCK OF

NETBANK,
INC.

 

 

	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date

  	
   

  	
   

  
						

 

NetBank, Inc.

11475 Great Oaks Way, Suite 100

Alpharetta, Georgia  30022

 

Attention:                                         Chief
Executive Officer

 

Re:                               Exercise
of Nonqualified Stock Option

 

Gentlemen:

 

Subject to acceptance
hereof by NetBank, Inc. (the “Company”), pursuant to the provisions of the
NetBank, Inc. 1996 Stock Incentive Plan (the “Plan”), I hereby give notice
of my election to exercise options granted to me to purchase                        
shares of common stock of the Company (“Common Stock”) under the Non-Qualified
Stock Option Award (the “Award”) dated as of                                              .  The purchase shall take place as of                                           ,
200    (the “Exercise Date”).

 

On or before the Exercise
Date, I will pay the applicable purchase price as follows:

 

o                                    by delivery of cash
or a certified check for $                  
for the full purchase price payable to the order of NetBank, Inc.

 

o                                    by delivery of cash
or a certified check for $                  
representing a portion of the purchase price with the balance to consist of
shares of Common Stock that I have owned for at least six months and that are
represented by a stock certificate I will surrender to the Company with my
endorsement.  If the number of shares of
Common Stock represented by such stock certificate exceed the number to be

 

 

applied against the
purchase price, I understand that a new stock certificate will be issued to me
reflecting the excess number of shares.

 

o                                    by delivery of a
stock certificate representing shares of Common Stock that I have owned for at
least six months which I will surrender to the Company with my endorsement as
payment of the purchase price.  If the
number of shares of Common Stock represented by such certificate exceed the
number to be applied against the purchase price, I understand that a new
certificate will be issued to me reflecting the excess number of shares.

 

o                                    by delivery of the
purchase price by                                               ,
a broker, dealer or other “creditor” as defined by Regulation T issued by
the Board of Governors of the Federal Reserve System.  I hereby authorize the Company to issue a
stock certificate for the number of shares indicated above in the name of said broker,
dealer or other creditor or its nominee pursuant to instructions received by
the Company and to deliver said stock certificate directly to that broker,
dealer or other creditor (or to such other party specified in the instructions
received by the Company from the broker, dealer or other creditor) upon receipt
of the purchase price.

 

As soon as the stock
certificate is registered in my name, please deliver it to me at the above
address.

 

If the Common Stock being
acquired is not registered for issuance to and resale by the Optionee pursuant
to an effective registration statement on Form S-8 (or successor
form) filed under the Securities Act of 1933, as amended (the “1933 Act”), I
hereby represent, warrant, covenant, and agree with the Company as follows:

 

The shares of the
Common Stock being acquired by me will be acquired for my own account without
the participation of any other person, with the intent of holding the Common
Stock for investment and without the intent of participating, directly or indirectly,
in a distribution of the Common Stock and not with a view to, or for resale in
connection with, any distribution of the Common Stock, nor am I aware of the
existence of any distribution of the Common Stock;

 

I am not acquiring
the Common Stock based upon any representation, oral or written, by any person
with respect to the future value of, or income from, the Common Stock but
rather upon an independent examination and judgment as to the prospects of the
Company;

 

The Common Stock
was not offered to me by means of publicly disseminated

 

 

advertisements or sales
literature, nor am I aware of any offers made to other persons by such means;

 

I am able to bear
the economic risks of the investment in the Common Stock, including the risk of
a complete loss of my investment therein;

 

I understand and
agree that the Common Stock will be issued and sold to me without registration
under any state law relating to the registration of securities for sale, and
will be issued and sold in reliance on the exemptions from registration under
the 1933 Act, provided by Sections 3(b) and/or 4(2) thereof and the rules and
regulations promulgated thereunder;

 

The Common Stock
cannot be offered for sale, sold or transferred by me other than pursuant to: (A) an
effective registration under the 1933 Act or in a transaction otherwise in
compliance with the 1933 Act; and (B) evidence satisfactory to the Company
of compliance with the applicable securities laws of other jurisdictions.  The Company shall be entitled to rely upon an
opinion of counsel satisfactory to it with respect to compliance with the above
laws;

 

The Company will
be under no obligation to register the Common Stock or to comply with any
exemption available for sale of the Common Stock without registration or filing,
and the information or conditions necessary to permit routine sales of
securities of the Company under Rule 144 under the 1933 Act are not now
available and no assurance has been given that it or they will become
available.  The Company is under no obligation
to act in any manner so as to make Rule 144 available with respect to the
Common Stock;

 

I have and have
had complete access to and the opportunity to review and make copies of all
material documents related to the business of the Company, including, but not
limited to, contracts, financial statements, tax returns, leases, deeds and
other books and records.  I have examined
such of these documents as I wished and am familiar with the business and
affairs of the Company.  I realize that
the purchase of the Common Stock is a speculative investment and that any
possible profit therefrom is uncertain;

 

I have had the
opportunity to ask questions of and receive answers from the Company and any
person acting on its behalf and to obtain all material information reasonably
available with respect to the Company and its affairs.  I have received all information and data with
respect to the Company which I have requested and which I have deemed relevant
in connection with the evaluation of the merits and risks of my investment in
the Company;

 

I have such
knowledge and experience in financial and business matters that I am

 

 

capable of evaluating the
merits and risks of the purchase of the Common Stock hereunder and I am able to
bear the economic risk of such purchase; and

 

The agreements,
representations, warranties and covenants made by me herein extend to and apply
to all of the Common Stock of the Company issued to me pursuant to this
Award.  Acceptance by me of the
certificate representing such Common Stock shall constitute a confirmation by
me that all such agreements, representations, warranties and covenants made
herein shall be true and correct at that time.

 

I understand that the
certificates representing the shares being purchased by me in accordance with
this notice shall bear a legend referring to the foregoing covenants,
representations and warranties and restrictions on transfer, and I agree that a
legend to that effect may be placed on any certificate which may be issued to
me as a substitute for the certificates being acquired by me in accordance with
this notice.  I further understand that
capitalized terms used in this Notice of Exercise without definition shall have
the meanings given to them in the Plan.

 

 

	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  AGREED TO AND ACCEPTED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NETBANK, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares

  	
   

  	
   

  	
   

  
	
  Exercised:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares
  Remaining:

  	
   

  	
   

  	
   

  	
  Date: 

  	
   

  	
   

  
										

 

 

EXHIBIT
2

 

NOTICE OF
WITHHOLDING ELECTION

NETBANK,
INC.

1996
STOCK INCENTIVE PLAN

 

	
  TO:

  	
  NetBank, Inc.

  
	
   

  	
   

  
	
  FROM:

  	
   

  
	
   

  	
   

  
	
  RE:

  	
  Withholding Election

  

 

This election relates to
the Non-Qualified Stock Option Award identified in Paragraph 3 below.  I hereby certify that:

 

(1)                                  My correct name and social security number and my
current address are set forth at the end of this document.

 

(2)                                  I am (check one, whichever is applicable).

 

o                                    the original
recipient of the Non-Qualified Stock Option Award.

 

o                                    the legal representative of the estate of the
original recipient of the Non-Qualified Stock Option Award.

 

o                                    a legatee of the original recipient of the
Non-Qualified Stock Option Award.

 

o                                    the legal guardian of the original recipient of the
Non-Qualified Stock Option Award.

 

(3)                                  The Non-Qualified Stock Option Award pursuant to
which this election relates was issued under the NetBank, Inc. 1996 Stock
Incentive Plan (the “Plan”) in the name of                           
for a total of                       
shares of Common Stock.  This election
relates to             
shares of Common Stock issuable upon exercise, provided that the numbers set
forth above shall be deemed changed as appropriate to reflect stock splits and
other adjustments contemplated by the applicable Plan provisions.

 

(4)                                  I hereby irrevocably elect to have the actual numbers
of shares of Stock issuable upon exercise reduced by the smallest number of
whole shares of Stock which, when multiplied by

 

 

the Fair Market Value of the Common Stock as of the date the Option is
exercised, is sufficient to satisfy the amount of the withholding tax.

 

(5)                                  This Withholding Election is made no later than the
Tax Date and is otherwise timely made pursuant to the Plan.

 

(6)                                  I understand that this Withholding Election is made
prior to the Tax Date and is otherwise timely made pursuant to Section 1
of the Award and Section 5.1 of the Plan.

 

(7)                                  I further understand that, if the Company does not
disapprove this Withholding Election, the Company shall withhold from the
Common Stock a whole number of shares of Common Stock having the value specified
in Paragraph 4 above.

 

(8)                                  The Company has made the Plan available to me, I
have read and understand the Plan and I have no reason to believe that any of
the conditions therein to the making of this Withholding Election have not been
met.  Capitalized terms used in this
Notice of Withholding Election without definition shall have the meanings given
to them in the Plan.

 

 

	
  Dated:

  	
   

  	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  Name (Printed)

  
	
   

  
	
   

  	
   

  
	
  Street Address

  
	
   

  
	
   

  	
   

  
	
  City, State, Zip CodeExhibit 10.2(g)

 

[Form of employee
Incentive Stock Option Award Pursuant to 1996

Stock Incentive Plan

(for award granted
electronically)]

 

INCENTIVE
STOCK OPTION AWARD

PURSUANT
TO THE NETBANK, INC.

1996 STOCK
INCENTIVE PLAN

 

THIS AWARD is made as of the Grant Date by
NETBANK, INC. (the “Company”) to you (the “Optionee”).

 

Upon and subject to the Terms and Conditions
(attached hereto and incorporated herein by reference), the Company hereby
awards as of the Grant Date to Optionee an incentive stock option (the “Option”),
as described below, to purchase the Option Shares.

 

The Grant Date, Grant Type, Number of Option
Shares Granted, Grant Price, Exercise Price and Vesting Schedule are all
set forth on the Smith Barney Stock Plan Services website under your online
account.

 

The Option may be exercised as to all or any
portion of the Vested Option Shares, but only during the Option Period, which
commences following the Grant Date and ends, generally, on the earliest of (a) the
tenth (10th) anniversary of the Grant Date; or (b) the later of the date (i) ninety
days (90) following the date the Optionee ceases to be an employee of the
Company for any reason other than death or Disability, or (ii) twelve
months following the date the Optionee ceases to be an employee of the Company
due to death or Disability; provided that the Option may be exercised as to no
more than the Vested Option Shares, determined pursuant to the Vesting
Schedule.  Note that
other limitations to exercising the Option, as described in the attached Terms
and Conditions, may apply.

 

NetBank, Inc.

 

 

TERMS AND
CONDITIONS TO THE

INCENTIVE
STOCK OPTION AWARD

PURSUANT
TO THE NETBANK, INC.

1996 STOCK
INCENTIVE PLAN

 

1.                                       Exercise of
Option.  Subject to the provisions
provided herein or in the Award made pursuant to the Plan:

 

(a)                                  the Option may be
exercised with respect to all or any portion of the Vested Option Shares at any
time during the Option Period by the delivery to the Company, at its principal
place of business, of a written notice of exercise in substantially the form of
Exhibit 1 hereto, which notice shall be actually delivered to the Company
no earlier than thirty (30) days and no later than ten (10) days prior to
the date upon which Optionee desires to exercise all or any portion of the
Option; and

 

(b)                                 payment to the Company
of the Exercise Price multiplied by
the number of Option Shares being purchased (the “Purchase Price”) as
provided in Section 2; and

 

(c)                                  payment
of any tax withholding liability pursuant to Section 4 below.

 

Upon acceptance of such notice and receipt of
payment in full of the Purchase Price and tax withholding liability, the
Company shall cause to be issued a certificate representing the Vested Option
Shares purchased.

 

The Company may, from time to time, establish
other methods for exercise of Options, whether electronically, through an agent
or otherwise, as may be communicated to the Optionee.

 

2.                                       Purchase
Price.  Payment of the Purchase Price
for all Vested Option Shares purchased pursuant to the exercise of an Option shall
be made in cash or certified check or, alternatively, as follows:

 

(a)                                  by delivery to the
Company of a number of shares of Common Stock which have been owned by the
Optionee for at least six (6) months prior to the date of the Option’s
exercise having a Fair Market Value, as determined under the Plan, on the date
of exercise either equal to the Purchase Price or in combination with cash or a
certified check to equal the Purchase Price; or

 

(b)                                 by receipt of the
Purchase Price in cash from a broker, dealer or other “creditor” as defined by
Regulation T issued by the Board of Governors of the Federal Reserve
System following delivery by the Optionee to the Committee of instructions in a
form acceptable to the Committee regarding delivery to such broker, dealer or
other creditor of that number of Option Shares with respect to which the Option
is exercised; or

 

(c)                                  any combination of
the foregoing.

 

3.                                       Vested Option
Shares.  The Option Shares shall
become Vested Option Shares in accordance with the Vesting Schedule; provided,
however, that all Option Shares may become Vested Option Shares in accordance
with Section 8(b) hereof.

 

4.                                       Withholding.  The Optionee must satisfy any federal, state
and local, if any, withholding taxes imposed by reason of the exercise of the
Option by paying to the Company the full amount of the withholding obligation
in cash or by certified check.  In lieu
of paying the withholding obligation in cash or by certified check, the
Optionee may elect (i) to tender to the Company the smallest number of
whole shares of Common Stock which have been owned by the Optionee for at least
six (6) months prior to the date of the Option’s exercise having a Fair
Market Value as of the date of the Option exercise, as determined under the
Plan, sufficient to satisfy the amount of the withholding tax; or (ii) irrevocably
electing to have the actual numbers of shares of Stock issuable upon exercise
reduced by the smallest

 

 

number of whole shares of Stock which, when multiplied by the Fair
Market Value of the Common Stock as of the date the Option is exercised, is
sufficient to satisfy the amount of the withholding tax (either election is
referred to below as a “Withholding Election”). 
The Optionee may make a Withholding Election only if the following conditions
are met:

 

(a)                                  the Withholding Election is made on or prior to the
date on which the amount of tax required to be withheld is determined (the “Tax
Date”) by executing and delivering to the Company a properly completed
Withholding Election; and

 

(b)                                 any
Withholding Election made will be irrevocable; however, the Committee may, in
its sole discretion, disapprove and give no effect to any Withholding Election.

 

5.                                       Incentive
Stock Option Status.  In the event
the aggregate Fair Market Value (determined as of the applicable grant date) of
shares of Common Stock subject to options (under all plans of the Company) that
first become exercisable in favor of the Optionee during any calendar year by
an amount that exceeds $100,000, then such options in excess of the limitation
shall not be Incentive Stock Options.  To
the extent such limitation affects all or any portion of the Option Shares,
those Option Shares shall be treated as nonqualified stock options.

 

6.                                       Rights
as Shareholder.  Until the stock
certificates reflecting the Option Shares accruing to the Optionee upon
exercise of the Option are issued to the Optionee, the Optionee shall have no
rights as a shareholder with respect to such Option Shares.  The Company shall make no adjustment for any
dividends or distributions or other rights on or with respect to Option Shares
for which the record date is prior to the issuance of that stock certificate,
except as the Plan or the attached Award otherwise provides.

 

7.                                       Restriction
on Transfer of Option and of Option Shares. 
The Option evidenced hereby is nontransferable other than by will or the
laws of descent and distribution and shall be exercisable during the lifetime
of the Optionee only by the Optionee (or in the event of his disability, by his
personal representative) and after his death, only by his legatee or the
executor of his estate.

 

8.                                       Changes
in Capitalization.

 

(a)                                  The number of Option
Shares and the Exercise Price shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision or combination of shares or the payment of a stock dividend
in shares of Common Stock to holders of outstanding shares of Common Stock or
any other increase or decrease in the number of shares of Common Stock
outstanding effected without receipt of consideration by the Company.

 

(b)                                 If the Company shall
be the surviving corporation in any merger or consolidation, recapitalization,
reclassification of shares or similar reorganization, the Optionee shall be
entitled to purchase or receive the number and class of securities to which a
holder of the number of shares of Common Stock subject to the Option at the
time of such transaction would have been entitled to receive as a result of
such transaction, and a corresponding adjustment shall be made in the Exercise
Price.  A dissolution or liquidation of
the Company shall cause the Option to terminate as to any portion thereof not
exercised as of the effective date of the dissolution or liquidation.  In the event of a sale of substantially all
of the Common Stock or property of the Company or the merger or consolidation
or any other reorganization, including a Change in Control of the Company in
which the Company is not the surviving entity, the Option Shares shall become
fully vested on the date determined by the Committee prior to the effective
date of the Change in Control, but no less than thirty (30) days prior to the
effective date of the Change in Control.

 

(c)                                  The existence of the
Plan and the Option granted pursuant to this Award shall not affect in any way
the right or power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or business
structure, any merger or consolidation of the Company, any issue of debt or
equity securities having preferences or priorities as to the Common Stock or

 

 

the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or any part of its
business or assets, or any other corporate act or proceeding. Any adjustment
pursuant to this Section may provide, in the Committee’s discretion, for
the elimination without payment therefor of any fractional shares that might
otherwise become subject to any Option.

 

9.                                       Special
Limitation of Exercise.  No purported
exercise of the Option shall be effective without the approval of the
Committee, which may be withheld to the extent that the exercise, either
individually or in the aggregate together with the exercise of other previously
exercised stock options and/or offers and sales pursuant to any prior or
contemplated offering of securities, would, in the sole and absolute judgment
of the Committee, require the filing of a registration statement with the
United States Securities and Exchange Commission or with the securities
commission of any state.  If a
registration statement is not in effect under the Securities Act of 1933 or any
applicable state securities law with respect to shares of Common Stock purchasable
or otherwise deliverable under the Option, the Optionee (a) shall deliver
to the Company, prior to the exercise of the Option or as a condition to the
delivery of Common Stock pursuant to the exercise of an Option exercise, such
information, representations and warranties as the Company may reasonably
request in order for the Company to be able to satisfy itself that the Option
Shares are being acquired in accordance with the terms of an applicable
exemption from the securities registration requirements of applicable federal
and state securities laws and (b) shall agree that the shares of Common
Stock so acquired will not be disposed of except pursuant to an effective
registration statement, unless the Company shall have received an opinion of
counsel that such disposition is exempt from such requirement under the
Securities Act of 1933 and any applicable state securities law.

 

10.                                 Legend
on Stock Certificates.  Certificates
evidencing the Option Shares, to the extent appropriate at the time, shall have
noted conspicuously on the certificates a legend intended to give all persons
full notice of the existence of the conditions, restrictions, rights and
obligations set forth herein and in the Plan.

 

11.                                 Governing
Laws.  This Award and the Terms and
Conditions shall be construed, administered and enforced according to the laws
of the State of Georgia.

 

12.                                 Successors.  This Award and the Terms and Conditions shall
be binding upon and inure to the benefit of the heirs, legal representatives,
successors and permitted assigns of the Optionee and the Company.

 

13.                                 Notice.  Except as otherwise specified herein, all
notices and other communications under this Award shall be in writing and shall
be deemed to have been given if personally delivered or if sent by registered
or certified United States mail, return receipt requested, postage prepaid,
addressed to the proposed recipient at the last known address of the
recipient.  Any party may designate any
other address to which notices shall be sent by giving notice of the address to
the other parties in the same manner as provided herein.

 

14.                                 Severability.  In the event that any one or more of the
provisions or portion thereof contained in the Award and these Terms and
Conditions shall for any reason be held to be invalid, illegal or unenforceable
in any respect, the same shall not invalidate or otherwise affect any other
provisions of the Award and these Terms and Conditions, and the Award and these
Terms and Conditions shall be construed as if the invalid, illegal or
unenforceable provision or portion thereof had never been contained herein.

 

15.                                 Entire
Agreement.  Subject to the terms and
conditions of the Plan, the Award and the Terms and Conditions express the
entire understanding of the parties with respect to the Option.

 

16.                                 Violation.  Any transfer, pledge, sale, assignment, or
hypothecation of the Option or any portion thereof shall be a violation of the
terms of the Award or these Terms and Conditions and shall be void and without
effect.

 

17.                                 Headings
and Capitalized Terms.  Section headings
used herein are for convenience of reference only and shall not be considered
in construing the Award or these Terms and Conditions.  Capitalized terms used, but not defined, in
either the Award or the Terms and Conditions shall be given the meaning
ascribed to them in the Plan.

 

 

18.                                 Specific
Performance.  In the event of any
actual or threatened default in, or breach of, any of the terms, conditions and
provisions of the Award and these Terms and Conditions, the party or parties
who are thereby aggrieved shall have the right to specific performance and
injunction in addition to any and all other rights and remedies at law or in
equity, and all such rights and remedies shall be cumulative.

 

19.                                 No
Right to Continued Retention. 
Neither the establishment of the Plan nor the award of Option Shares
hereunder shall be construed as giving the Optionee the right to continued
employment with the Company or any affiliate.

 

 

EXHIBIT 1

 

NOTICE OF
EXERCISE OF

STOCK
OPTION TO PURCHASE

COMMON
STOCK OF

NETBANK,
INC.

 

	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date

  	
   

  	
   

  
						

 

NetBank, Inc.

Royal Centre Three, Suite 100

11475 Great Oaks Parkway

Alpharetta, Georgia  30022

 

Attention:                                         President

 

Re:                               Exercise of Incentive
Stock Option

 

Gentlemen:

 

Subject to acceptance hereof by NetBank, Inc.
(the “Company”), pursuant to the provisions of the NetBank, Inc. 1996
Stock Incentive Plan (the “Plan”), I hereby give notice of my election to
exercise options granted to me to purchase                            
shares of common stock of the Company (“Common Stock”) under the Incentive
Stock Option Award (the “Award”) dated as of                                         .  The purchase shall take place as of                                         ,
200     (the “Exercise Date”).

 

On or before the Exercise Date, I will pay
the applicable purchase price as follows:

 

o                                    by delivery of cash
or a certified check for $                      
for the full purchase price payable to the order of NetBank, Inc.

 

o                                    by delivery of cash
or a certified check for $                      
representing a portion of the purchase price with the balance to consist of
shares of Common Stock that I have owned for at least six months and that are
represented by a stock certificate I will surrender to the Company with my
endorsement.  If the number of shares of
Common Stock represented by such stock certificate exceed the number to be
applied against the purchase price, I understand that a new stock certificate
will be issued to me reflecting the excess number of shares.

 

o                                    by delivery of a stock
certificate representing shares of Common Stock that I have owned for at least
six months which I will surrender to the Company with my endorsement as payment
of the purchase price.  If the number of
shares of Common Stock represented by such certificate exceed the number to be
applied against the purchase price, I understand that a new certificate will be
issued to me reflecting the excess number of shares.

 

o                                    by delivery of the
purchase price by                                             ,
a broker, dealer or other “creditor” as defined by Regulation T issued by
the Board of Governors of the Federal Reserve

 

 

System. 
I hereby authorize the Company to issue a stock certificate for the
number of shares indicated above in the name of said broker, dealer or other
creditor or its nominee pursuant to instructions received by the Company and to
deliver said stock certificate directly to that broker, dealer or other
creditor (or to such other party specified in the instructions received by the
Company from the broker, dealer or other creditor) upon receipt of the purchase
price.

 

As soon as the stock certificate is
registered in my name, please deliver it to me at the above address.

 

If the Common Stock being acquired is not
registered for issuance to and resale by the Optionee pursuant to an effective
registration statement on Form S-8 (or successor form) filed under the
Securities Act of 1933, as amended (the “1933 Act”), I hereby represent,
warrant, covenant, and agree with the Company as follows:

 

The shares of
the Common Stock being acquired by me will be acquired for my own account
without the participation of any other person, with the intent of holding the
Common Stock for investment and without the intent of participating, directly
or indirectly, in a distribution of the Common Stock and not with a view to, or
for resale in connection with, any distribution of the Common Stock, nor am I
aware of the existence of any distribution of the Common Stock;

 

I am not
acquiring the Common Stock based upon any representation, oral or written, by
any person with respect to the future value of, or income from, the Common
Stock but rather upon an independent examination and judgment as to the
prospects of the Company;

 

The Common
Stock was not offered to me by means of publicly disseminated advertisements or
sales literature, nor am I aware of any offers made to other persons by such
means;

 

I am able to
bear the economic risks of the investment in the Common Stock, including the
risk of a complete loss of my investment therein;

 

I understand
and agree that the Common Stock will be issued and sold to me without
registration under any state law relating to the registration of securities for
sale, and will be issued and sold in reliance on the exemptions from registration
under the 1933 Act, provided by Sections 3(b) and/or 4(2) thereof and
the rules and regulations promulgated thereunder;

 

The Common
Stock cannot be offered for sale, sold or transferred by me other than pursuant
to: (A) an effective registration under the 1933 Act or in a transaction
otherwise in compliance with the 1933 Act; and (B) evidence satisfactory
to the Company of compliance with the applicable securities laws of other
jurisdictions.  The Company shall be
entitled to rely upon an opinion of counsel satisfactory to it with respect to
compliance with the above laws;

 

The Company
will be under no obligation to register the Common Stock or to comply with any
exemption available for sale of the Common Stock without registration or
filing, and the information or conditions necessary to permit routine sales of
securities of the Company under Rule 144 under the 1933 Act are not now
available and no assurance has been given that it or they will become
available.  The Company is under no
obligation to act in any manner so as to make Rule 144 available with
respect to the Common Stock;

 

I have and
have had complete access to and the opportunity to review and make copies of
all material documents related to the business of the Company, including, but
not limited to, contracts, financial statements, tax returns, leases, deeds and
other books and records.  I have examined
such of these documents as I wished and am familiar with the business and
affairs of the Company.  I realize that
the purchase of the Common Stock is a speculative investment and that any
possible profit therefrom is uncertain;

 

 

I have had the
opportunity to ask questions of and receive answers from the Company and any
person acting on its behalf and to obtain all material information reasonably
available with respect to the Company and its affairs.  I have received all information and data with
respect to the Company which I have requested and which I have deemed relevant
in connection with the evaluation of the merits and risks of my investment in
the Company;

 

I have such
knowledge and experience in financial and business matters that I am capable of
evaluating the merits and risks of the purchase of the Common Stock hereunder
and I am able to bear the economic risk of such purchase; and

 

The
agreements, representations, warranties and covenants made by me herein extend
to and apply to all of the Common Stock of the Company issued to me pursuant to
this Award.  Acceptance by me of the
certificate representing such Common Stock shall constitute a confirmation by
me that all such agreements, representations, warranties and covenants made
herein shall be true and correct at that time.

 

I understand that the certificates
representing the shares being purchased by me in accordance with this notice shall
bear a legend referring to the foregoing covenants, representations and
warranties and restrictions on transfer, and I agree that a legend to that
effect may be placed on any certificate which may be issued to me as a
substitute for the certificates being acquired by me in accordance with this
notice.  I further understand that
capitalized terms used in this Notice of Exercise without definition shall have
the meanings given to them in the Plan.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
   

  
	
  AGREED TO AND ACCEPTED:

  
	
   

  
	
  NETBANK, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
  Number of Shares:

  
	
  Exercised:

  	
   

  	
   

  
	
   

  
	
  Number of Shares Remaining:

  	
   

  	
   

  	
  Date:

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