Exhibit 99.1
QuinStreet, Inc.
1999 Equity Incentive Plan
1.
Purposes.
(a) Eligible Stock Award Recipients.
The persons eligible to receive Stock Awards are the
Employees, Directors and Consultants of the Company and its Affiliates.
(b) Available Stock Awards.
The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.
(c) General Purpose.
The Company, by means of the Plan, seeks to retain the services of the
group of persons eligible to receive Stock Awards, to secure and retain the services of new members
of this group and to provide incentives for such persons to exert maximum efforts for the success
of the Company and its Affiliates.
2.
Definitions.
(a)
Affiliate
means any parent corporation or subsidiary corporation of the Company, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of
the Code.
(b)
Board
means the Board of Directors of the Company.
(c)
Code
means the Internal Revenue Code of 1986, as amended.
(d)
Committee
means a committee of one or more members of the Board appointed by the Board
in accordance with subsection 3(c).
(e)
Common Stock
means the common stock of the Company.
(f)
Company
means QuinStreet, Inc., a California corporation.
(g)
Consultant
means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or
(ii) who is a member of the Board of Directors of an Affiliate. However, the term Consultant
shall not include either Directors who are not compensated by the Company for their services as
Directors or Directors who are merely paid a directors fee by the Company for their services as
Directors.
(h)
Continuous Service
means that the Participants service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The
Participants Continuous Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participants Continuous
Service. For example, a change in status from an Employee of the Company to a Consultant of an
Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or
the chief executive officer of the Company, in that partys sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of absence approved by
that party, including sick leave, military leave or any other personal leave.
(i)
Covered Employee
means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to
shareholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.
(j)
Director
means a member of the Board of Directors of the Company.
(k)
Disability
means (i) before the Listing Date, the inability of a person, in the opinion
of a qualified physician acceptable to the Company, to perform the major duties of that persons
position with the Company or an Affiliate of the Company because of the sickness or injury of the
person and (ii) after the Listing Date, the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.
(l)
Employee
means any person employed by the Company or an Affiliate. Mere service as a
Director or payment of a directors fee by the Company or an Affiliate shall not be sufficient to
constitute employment by the Company or an Affiliate.
(m)
Exchange Act
means the Securities Exchange Act of 1934, as amended.
(n)
Fair Market Value
means, as of any date, the value of the Common Stock determined as
follows:
(i)
If the Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest volume of trading in
the Common Stock) on the last market trading day prior to the day of determination, as reported in
The Wall Street Journal
or such other source as the Board deems reliable.
(ii)
In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.
(iii)
Prior to the Listing Date, the value of the Common Stock shall be determined in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of Regulations.
(o)
Incentive Stock Option
means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(p)
Listing Date
means the first date upon which any security of the Company is listed (or
approved for listing) upon notice of issuance on any securities exchange or designated (or approved
for designation) upon notice of issuance as a national market security on an interdealer quotation
system if such securities exchange or interdealer quotation system has been certified in accordance
with the provisions of Section 25100(o) of the California Corporate Securities Law of 1968.
(q)
Non-Employee Director
means a Director who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or
in any capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(Regulation S-K)), does not possess an interest in any other transaction as to which disclosure
would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship
as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise
considered a non-employee director for purposes of Rule 16b-3.
(r)
Nonstatutory Stock Option
means an Option not intended to qualify as an Incentive Stock
Option.
(s)
Officer
means (i) before the Listing Date, any person designated by the Company as an
officer and (ii) on and after the Listing Date, a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(t)
Option
means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant
to the Plan.
(u)
Option Agreement
means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.
(v)
Optionholder
means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.
(w)
Outside Director
means a Director who either (i) is not a current employee of the
Company or an affiliated corporation (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an
affiliated corporation receiving compensation for prior services (other than benefits under
a tax qualified pension plan), was not an officer of the Company or an affiliated corporation at
any time and is not currently receiving direct or indirect remuneration from the Company or an
affiliated corporation for services in any capacity other than as a Director or (ii) is otherwise
considered an outside director for purposes of Section 162(m) of the Code.
(x)
Participant
means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.
(y)
Plan
means this QuinStreet, Inc. 1999 Equity Incentive Plan.
(z)
Rule 16b-3
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.
(aa)
Securities Act
means the Securities Act of 1933, as amended.
(bb)
Stock Award
means any right granted under the Plan, including an Option, a stock bonus
and a right to acquire restricted stock.
(cc)
Stock Award Agreement
means a written agreement between the Company and a holder of a
Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock
Award Agreement shall be subject to the terms and conditions of the Plan.
(dd)
Ten Percent Shareholder
means a person who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates.
3.
Administration.
(a) Administration by Board.
The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c). Any interpretation of the
Plan by the Board and any decision by the Board under the Plan shall be final and binding on all
persons.
(b) Powers of Board.
The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i)
To determine from time to time which of the persons eligible under the Plan shall be
granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of
types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not
be identical), including the time or times when a person shall be permitted to receive Common Stock
pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person.
(ii)
To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the
exercise of this power, may correct any defect, omission or inconsistency in the Plan or in
any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.
(iii)
To amend the Plan or a Stock Award as provided in Section 12.
(iv)
Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company which are not in conflict with the
provisions of the Plan.
(c) Delegation to Committee.
(i) General.
The Board may delegate administration of the Plan to a Committee or Committees
of one (1) or more members of the Board, and the term Committee shall apply to any person or
persons to whom such authority has been delegated. If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.
The Board may abolish the Committee at any time and revest in the Board the administration of the
Plan.
(ii) Committee Composition when Common Stock is Publicly Traded.
At such time as the Common
Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or
more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the
Board or the Committee may (1) delegate to a committee of one or more members of the Board who are
not Outside Directors the authority to grant Stock Awards to eligible persons who are either (a)
not then Covered Employees and are not expected to be Covered Employees at the time of recognition
of income resulting from such Stock Award or (b) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code and/or) (2) delegate to a committee of one or more
members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to
eligible persons who are not then subject to Section 16 of the Exchange Act.
4.
Shares Subject to the Plan.
(a) Share
Reserve.
Subject to the provisions of Section 11 relating to adjustments upon
changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not
exceed in the aggregate fourteen million nine hundred thousand (14,900,000) shares of Common Stock.
(b) Reversion of Shares to the Share Reserve.
If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in full,
the shares of Common Stock not acquired under such Stock Award shall revert to and again
become available for issuance under the Plan.
(c) Source of Shares.
The shares of Common Stock subject to the Plan may be unissued shares
or reacquired shares, bought on the market or otherwise.
(d) Share Reserve Limitation.
Prior to the Listing Date and to the extent then required by
Section 260.140.45 of Title 10 of the California Code of Regulations, the total number of shares of
Common Stock issuable upon exercise of all outstanding Options and the total number of shares of
Common Stock provided for under any stock bonus or similar plan of the Company shall not exceed the
applicable percentage as calculated in accordance with the conditions and exclusions of Section
260.140.45 of Title 10 of the California Code of Regulations, based on the shares of Common Stock
of the Company that are outstanding at the time the calculation is made.
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5.
Eligibility.
(a) Eligibility for Specific Stock Awards
. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.
(b) Ten Percent Shareholders.
(i)
A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value
of the Common Stock at the date of grant and the Option is not exercisable after the expiration of
five (5) years from the date of grant.
(ii)
Prior to the Listing Date, a Ten Percent Shareholder shall not be granted a Nonstatutory
Stock Option unless the exercise price of such Option is at least (i) one hundred ten percent
(110%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as is permitted by
Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of
the Option.
(iii)
Prior to the Listing Date, a Ten Percent Shareholder shall not be granted a restricted
stock award unless the purchase price of the restricted stock is at least (i) one hundred percent
(100%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as is
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Section 260.140.45 generally provides that the
total number of shares issuable upon exercise of all outstanding options
(exclusive of certain rights) and the total number of shares called for under
any stock bonus or similar plan shall not exceed a number of shares which is
equal to 30% of the then outstanding shares of the issuer (convertible
preferred or convertible senior common shares counted on an as if converted
basis), exclusive of shares subject to promotional waivers under Section
260.141, unless a percentage higher than 30% is approved by at least two-thirds
of the outstanding shares entitled to vote.
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permitted by Section 260.140.41 of Title 10 of the California Code of Regulations at the time
of the grant of the Option.
(c) Section
162(m)
Limitation.
Subject to the provisions of Section 11 relating to
adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted
Options covering more than eight hundred thousand (800,000) shares of Common Stock during any
calendar year. This subsection 5(c) shall not apply prior to the Listing Date and, following the
Listing Date, this subsection 5(c) shall not apply until (i) the earliest of: (1) the first
material modification of the Plan (including any increase in the number of shares of Common Stock
reserved for issuance under the Plan in accordance with Section 4); (2) the issuance of all of the
shares of Common Stock reserved for issuance under the Plan; (3) the expiration of the Plan; or (4)
the first meeting of shareholders at which Directors are to be elected that occurs after the close
of the third calendar year following the calendar year in which occurred the first registration of
an equity security under Section 12 of the Exchange Act; or (ii) such other date required by
Section 162(m) of the Code and the rules and regulations promulgated thereunder.
(d) Consultants.
(i)
Prior to the Listing Date, a Consultant shall not be eligible for the grant of a Stock
Award if, at the time of grant, either the offer or the sale of the Companys securities to such
Consultant is not exempt under Rule 701 of the Securities Act (Rule 701) because of the nature of
the services that the Consultant is providing to the Company, or because the Consultant is not a
natural person, or as otherwise provided by Rule 701, unless the Company determines that such grant
need not comply with the requirements of Rule 701 and will satisfy another exemption under the
Securities Act as well as comply with the securities laws of all other relevant jurisdictions.
(ii)
From and after the Listing Date, a Consultant shall not be eligible for the grant of a
Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act
(Form S-8) is not available to register either the offer or the sale of the Companys securities
to such Consultant because of the nature of the services that the Consultant is providing to the
Company, or because the Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (
e.g.,
on a Form S-3 Registration Statement)
or (B) does not require registration under the Securities Act in order to comply with the
requirements of the Securities Act, if applicable, and (ii) that such grant complies with the
securities laws of all other relevant jurisdictions.
(iii)
As of April 7, 1999 Rule 701 and Form S-8 generally are available to consultants and
advisors only if (i) they are natural persons; (ii) they provide bona fide services to the issuer,
its parents, its majority-owned subsidiaries or majority-owned subsidiaries of the issuers parent;
and (iii) the services are not in connection with the offer or sale of securities in a
capital-raising transaction, and do not directly or indirectly promote or maintain a market for the
issuers securities.
6.
Option Provisions.
Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates will be issued for shares of Common Stock purchased on exercise of each
type of Option. The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) Term.
Subject to the provisions of subsection 5(b) regarding Ten Percent Shareholders, no
Option granted prior to the Listing Date shall be exercisable after the expiration of ten (10)
years from the date it was granted, and no Incentive Stock Option granted on or after the Listing
Date shall be exercisable after the expiration of ten (10) years from the date it was granted.
(b) Exercise Price of an Incentive Stock Option.
Subject to the provisions of subsection 5(b)
regarding Ten Percent Shareholders, the exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option
may be granted with an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.
(c) Exercise Price of a Nonstatutory Stock Option.
Subject to the provisions of subsection
5(b) regarding Ten Percent Shareholders, the exercise price of each Nonstatutory Stock Option
granted prior to the Listing Date shall be not less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock subject to the Option on the date the Option is granted. The
exercise price of each Nonstatutory Stock Option granted on or after the Listing Date shall be not
less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock
Option may be granted with an exercise price lower than that set forth in the preceding sentence if
such Option is granted pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.
(d) Consideration.
The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the
time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the
Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company
of other Common Stock, (2) according to a deferred payment or other similar arrangement with the
Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board;
provided, however, that at any time that the Company is incorporated in Delaware, payment of the
Common Stocks par value, as defined in the Delaware General Corporation Law, shall not be made
by deferred payment.
In the case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other than amounts stated to
be interest under the deferred payment arrangement.
(e) Transferability of an Incentive Stock Option.
An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.
(f) Transferability of a Nonstatutory Stock Option.
A Nonstatutory Stock Option granted prior
to the Listing Date shall not be transferable except by will or by the laws of descent and
distribution and, to the extent provided in the Option Agreement, to such further extent as
permitted by Section 260.140.41(d) of Title 10 of the California Code of Regulations at the time of
the grant of the Option, and shall be exercisable during the lifetime of the Optionholder only by
the Optionholder. A Nonstatutory Stock Option granted on or after the Listing Date shall be
transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option does
not provide for transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.
(g) Vesting Generally.
The total number of shares of Common Stock subject to an Option may,
but need not, vest and therefore become exercisable in periodic installments that may, but need
not, be equal. The Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The provisions of this
subsection 6(g) are subject to any Option provisions governing the minimum number of shares of
Common Stock as to which an Option may be exercised.
(h) Minimum Vesting Prior to the Listing Date.
Notwithstanding the foregoing subsection 6(g),
to the extent that the following restrictions on vesting are required by Section 260.140.41(f) of
Title 10 of the California Code of Regulations at the time of the grant of the Option, then:
(i)
Options granted prior to the Listing Date to an Employee who is not an Officer, Director
or Consultant shall provide for vesting of the total number of shares of Common Stock at a rate of
at least twenty percent (20%) per year over five (5) years from the date the Option was granted,
subject to reasonable conditions such as continued employment; and
(ii)
Options granted prior to the Listing Date to Officers, Directors or Consultants may be
made fully exercisable, subject to reasonable conditions such as continued employment, at any time
or during any period established by the Company.
(i) Termination of Continuous Service.
In the event an Optionholders Continuous Service
terminates (other than upon the Optionholders death or Disability), the Optionholder may exercise
his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination) but only within such period of time ending on the earlier of (i) the date
three (3) months following the termination of the Optionholders Continuous Service (or such longer
or shorter period specified in the Option Agreement, which period shall not be less than thirty
(30) days for Options granted prior to the Listing Date unless such termination is for cause), or
(ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after
termination, the Optionholder does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate.
(j) Extension of Termination Date.
An Optionholders Option Agreement may also provide that
if the exercise of the Option following the termination of the Optionholders Continuous Service
(other than upon the Optionholders death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration requirements under
the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the
term of the Option set forth in subsection 6(a) or (ii) the expiration of a period of three (3)
months after the termination of the Optionholders Continuous Service during which the exercise of
the Option would not be in violation of such registration requirements.
(k) Disability of Optionholder.
In the event that an Optionholders Continuous Service
terminates as a result of the Optionholders Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in the Option
Agreement, which period shall not be less than six (6) months for Options granted prior to the
Listing Date) or (ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionholder does not exercise his or her Option within the
time specified herein, the Option shall terminate.
(l) Death of Optionholder.
In the event (i) an Optionholders Continuous Service terminates
as a result of the Optionholders death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholders Continuous Service
for a reason other than death, then the Option may be exercised (to the extent the Optionholder was
entitled to exercise such Option as of the date of death) by the Optionholders estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionholders death pursuant to subsection 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date eighteen (18) months following the date of
death (or such longer or shorter period specified in the Option Agreement, which period shall not
be less than six (6) months for Options granted
prior to the Listing Date) or (2) the expiration of the term of such Option as set forth in
the Option Agreement. If, after death, the Option is not exercised within the time specified
herein, the Option shall terminate.
(m) Early Exercise.
The Option may, but need not, include a provision whereby the
Optionholder may elect at any time before the Optionholders Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior
to the full vesting of the Option. Subject to the Repurchase Limitation in subsection 10(h), any
unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the
Company or to any other restriction the Board determines to be appropriate.
(n) Right of Repurchase.
Subject to the Repurchase Limitation in subsection 10(h), the
Option may, but need not, include a provision whereby the Company may elect, prior to the Listing
Date, to repurchase all or any part of the vested shares of Common Stock acquired by the
Optionholder pursuant to the exercise of the Option.
(o) Right of First Refusal.
The Option may, but need not, include a provision whereby the
Company may elect, prior to the Listing Date, to exercise a right of first refusal following
receipt of notice from the Optionholder of the intent to transfer all or any part of the shares of
Common Stock received upon the exercise of the Option. Except as expressly provided in this
subsection 6(o), such right of first refusal shall otherwise comply with any applicable provisions
of the Bylaws of the Company.
(p) Re-Load Options.
Without in any way limiting the authority of the Board to make or not to
make grants of Options hereunder, the Board shall have the authority (but not an obligation) to
include as part of any Option Agreement a provision entitling the Optionholder to a further Option
(a Re-Load Option) in the event the Optionholder exercises the Option evidenced by the Option
Agreement, in whole or in part, by surrendering other shares of Common Stock in accordance with
this Plan and the terms and conditions of the Option Agreement. Any such Re-Load Option shall (i)
provide for a number of shares of Common Stock equal to the number of shares of Common Stock
surrendered as part or all of the exercise price of such Option; (ii) have an expiration date which
is the same as the expiration date of the Option the exercise of which gave rise to such Re-Load
Option; and (iii) have an exercise price which is equal to one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Re-Load Option on the date of exercise of the
original Option. Notwithstanding the foregoing, a Re-Load Option shall be subject to the same
exercise price and term provisions heretofore described for Options under the Plan.
Any such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option, as
the Board may designate at the time of the grant of the original Option; provided, however, that
the designation of any Re-Load Option as an Incentive Stock Option shall be subject to the one
hundred thousand dollar ($100,000) annual limitation on the exercisability of Incentive Stock
Options described in subsection 10(d) and in Section 422(d) of the Code. There shall be no Re-Load
Options on a Re-Load Option. Any such Re-Load Option shall be subject to the availability of
sufficient shares of Common Stock under subsection 4(a)
and the Section 162(m) Limitation on the grants of Options under subsection 5(c) and shall
be subject to such other terms and conditions as the Board may determine which are not inconsistent
with the express provisions of the Plan regarding the terms of Options.
7.
Provisions of Stock Awards other than Options.
(a) Stock Bonus Awards.
Each stock bonus agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. The terms and conditions of stock
bonus agreements may change from time to time, and the terms and conditions of separate stock bonus
agreements need not be identical, but each stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) Consideration.
A stock bonus may be awarded in consideration for past services actually
rendered to the Company or an Affiliate for its benefit.
(ii) Vesting.
Subject to the Repurchase Limitation in subsection 10(h), shares of Common
Stock awarded under the stock bonus agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be determined by the Board.
(iii) Termination of Participants Continuous Service.
Subject to the Repurchase Limitation
in subsection 10(h), in the event a Participants Continuous Service terminates, the Company may
reacquire any or all of the shares of Common Stock held by the Participant which have not vested as
of the date of termination under the terms of the stock bonus agreement.
(iv) Transferability.
For a stock bonus award made before the Listing Date, rights to acquire
shares of Common Stock under the stock bonus agreement shall not be transferable except by will or
by the laws of descent and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant. For a stock bonus award made on or after the Listing Date,
rights to acquire shares of Common Stock under the stock bonus agreement shall be transferable by
the Participant only upon such terms and conditions as are set forth in the stock bonus agreement,
as the Board shall determine in its discretion, so long as Common Stock awarded under the stock
bonus agreement remains subject to the terms of the stock bonus agreement.
(b) Restricted Stock Awards.
Each restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. The terms and
conditions of the restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:
(i) Purchase Price.
Subject to the provisions of subsection 5(b) regarding Ten Percent
Shareholders, the purchase price under each restricted stock purchase agreement shall be such
amount as the Board shall determine and designate in such restricted stock purchase agreement. For
restricted stock awards made prior to the Listing Date, the purchase price shall not be less than
eighty-five percent (85%) of the Common Stocks Fair Market Value on the date such award is made or
at the time the purchase is consummated. For restricted stock awards made on or after the Listing
Date, the purchase price shall not be less than eighty-five percent (85%) of the Common Stocks
Fair Market Value on the date such award is made or at the time the purchase is consummated.
(ii) Consideration.
The purchase price of Common Stock acquired pursuant to the restricted
stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board, according to a deferred payment or other similar arrangement with the
Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board
in its discretion; provided, however, that at any time that the Company is incorporated in
Delaware, then payment of the Common Stocks par value, as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.
(iii) Vesting.
Subject to the Repurchase Limitation in subsection 10(h), shares of Common
Stock acquired under the restricted stock purchase agreement may, but need not, be subject to a
share repurchase option in favor of the Company in accordance with a vesting schedule to be
determined by the Board.
(iv) Termination of Participants Continuous Service.
Subject to the Repurchase Limitation
in subsection 10(h), in the event a Participants Continuous Service terminates, the Company may
repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant
which have not vested as of the date of termination under the terms of the restricted stock
purchase agreement.
(v) Transferability.
For a restricted stock award made before the Listing Date, rights to
acquire shares of Common Stock under the restricted stock purchase agreement shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Participant only by the Participant. For a restricted stock award made
on or after the Listing Date, rights to acquire shares of Common Stock under the restricted stock
purchase agreement shall be transferable by the Participant only upon such terms and conditions as
are set forth in the restricted stock purchase agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the restricted stock purchase agreement remains
subject to the terms of the restricted stock purchase agreement.
8.
Covenants of the Company.
(a) Availability of Shares.
During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy such Stock Awards.
(b) Securities Law Compliance.
The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained.
9.
Use of Proceeds from Stock.
Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.
10.
Miscellaneous.
(a) Acceleration of Exercisability and Vesting.
The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which a Stock Award or
any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock
Award stating the time at which it may first be exercised or the time during which it will vest.
(b) Shareholder Rights.
No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.
(c) No Employment or other Service Rights.
Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultants agreement with the Company or an Affiliate or (iii) the
service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the Affiliate is incorporated,
as the case may be.
(d) Incentive Stock Option $100,000 Limitation.
To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options.
(e) Investment Assurances.
The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participants knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Stock Award for the Participants own
account and not with any present intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (iii) the issuance of the shares of Common Stock upon the exercise or acquisition of
Common Stock under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act or (iv) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon advice of counsel
to the Company, place legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the Common Stock.
(f) Withholding Obligations.
To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the following means (in
addition to the Companys right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award;
or (iii) delivering to the Company owned and unencumbered shares of Common Stock.
(g) Information Obligation.
Prior to the Listing Date, to the extent required by Section
260.140.46 of Title 10 of the California Code of Regulations, the Company shall deliver financial
statements to Participants at least annually. This subsection 10(g) shall not apply to key
Employees whose duties in connection with the Company assure them access to equivalent information.
(h) Repurchase Limitation.
The terms of any repurchase option shall be specified in the Stock
Award and may be either at Fair Market Value at the time of repurchase or at not less than the
original purchase price. To the extent required by Section 260.140.41 and Section 260.140.42 of
Title 10 of the California Code of Regulations at the time a Stock Award is made, any repurchase
option contained in a Stock Award granted prior to the Listing Date to a person who is not an
Officer, Director or Consultant shall be upon the terms described below:
(i) Fair Market Value.
If the repurchase option gives the Company the right to repurchase the
shares of Common Stock upon termination of employment at not less than the
Fair Market Value of the shares of Common Stock to be purchased on the date of termination of
Continuous Service, then (i) the right to repurchase shall be exercised for cash or cancellation of
purchase money indebtedness for the shares of Common Stock within ninety (90) days of termination
of Continuous Service (or in the case of shares of Common Stock issued upon exercise of Stock
Awards after such date of termination, within ninety (90) days after the date of the exercise) or
such longer period as may be agreed to by the Company and the Participant (for example, for
purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding qualified
small business stock) and (ii) the right terminates when the shares of Common Stock become
publicly traded.
(ii) Original Purchase Price.
If the repurchase option gives the Company the right to
repurchase the shares of Common Stock upon termination of Continuous Service at the original
purchase price, then (i) the right to repurchase at the original purchase price shall lapse at the
rate of at least twenty percent (20%) of the shares of Common Stock per year over five (5) years
from the date the Stock Award is granted (without respect to the date the Stock Award was exercised
or became exercisable) and (ii) the right to repurchase shall be exercised for cash or cancellation
of purchase money indebtedness for the shares of Common Stock within ninety (90) days of
termination of Continuous Service (or in the case of shares of Common Stock issued upon exercise of
Options after such date of termination, within ninety (90) days after the date of the exercise) or
such longer period as may be agreed to by the Company and the Participant (for example, for
purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding qualified
small business stock).
11.
Adjustments upon Changes in Stock.
(a) Capitalization Adjustments
. If any change is made in the Common Stock subject to the
Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of
securities subject to award to any person pursuant to subsection 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities and price per share
of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a transaction without receipt of consideration
by the Company.)
(b) Change in ControlDissolution or Liquidation
. In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Awards shall terminate immediately prior to
such event.
(c) Change in ControlAsset Sale, Merger, Consolidation or Reverse Merger
. In the event of
(i) a sale, lease or other disposition of all or substantially all of the assets of the Company,
(ii) a merger or consolidation in which the Company is not the surviving corporation
or (iii) a reverse merger in which the Company is the surviving corporation but the shares of
Common Stock outstanding immediately preceding the merger are converted by virtue of the merger
into other property, whether in the form of securities, cash or otherwise, then any surviving
corporation or acquiring corporation shall assume any Stock Awards outstanding under the Plan or
shall substitute similar stock awards (including an award to acquire the same consideration paid to
the shareholders in the transaction described in this subsection 11(c) for those outstanding under
the Plan. In the event any surviving corporation or acquiring corporation refuses to assume such
Stock Awards or to substitute similar stock awards for those outstanding under the Plan, then with
respect to Stock Awards held by Participants whose Continuous Service has not terminated, the
vesting of such Stock Awards (and, if applicable, the time during which such Stock Awards may be
exercised) shall be accelerated in full, and the Stock Awards shall terminate if not exercised (if
applicable) at or prior to such event. With respect to any other Stock Awards outstanding under
the Plan, such Stock Awards shall terminate if not exercised (if applicable) prior to such event.
12.
Amendment of the Plan and Stock Awards.
(a) Amendment of Plan.
The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes in Common Stock, no
amendment shall be effective unless approved by the shareholders of the Company to the extent
shareholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule
16b-3 or any Nasdaq or securities exchange listing requirements.
(b) Shareholder Approval.
The Board may, in its sole discretion, submit any other amendment
to the Plan for shareholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to certain executive officers.
(c) Contemplated Amendments.
It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(d) No Impairment of Rights.
Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent
of the Participant and (ii) the Participant consents in writing.
(e) Amendment of Stock Awards.
The Board at any time, and from time to time, may amend the
terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award
shall not be impaired by any such amendment unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.
13.
Termination or Suspension of the Plan.
(a) Plan Term.
The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is adopted by the Board or approved by the shareholders of the Company, whichever is earlier.
No Stock Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) No Impairment of Rights.
Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the Participant.
14.
Effective Date of Plan.
The Plan shall become effective as determined by the Board, but no Stock Award shall be
exercised (or, in the case of a stock bonus, shall be granted) unless and until the Plan has been
approved by the shareholders of the Company, which approval shall be within twelve (12) months
before or after the date the Plan is adopted by the Board.
15.
Choice of Law
.
(a)
The law of the State of California shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such states conflict of laws rules.
Exhibit 99.2
QUINSTREET, INC.
STOCK OPTION GRANT NOTICE
(1999 EQUITY INCENTIVE PLAN)
QuinStreet, Inc. (the Company), pursuant to its 1999 Equity Incentive Plan (the Plan),
hereby grants to Optionholder an option to purchase the number of shares of the Companys Common
Stock set forth below. This option is subject to all of the terms and conditions as set forth
herein and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.
Optionholder:
Date of Grant:
Vesting Commencement Date:
Number of Shares Subject to Option:
Exercise Price (Per Share):
Total Exercise Price:
Expiration Date:
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Type of Grant:
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Incentive Stock Option
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Nonstatutory Stock Option
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Exercise Schedule
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Same as Vesting Schedule
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Early Exercise Permitted
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Vesting Schedule
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1/4
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of the shares vest one year after the Vesting Commencement Date.
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1/48
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of the shares vest monthly thereafter over the next three years.
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Payment:
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By one or a combination of the following items (described in the Stock Option Agreement):
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By cash or check
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Pursuant to a Regulation T Program if the Shares are publicly traded
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By delivery of already-owned shares if the Shares are publicly traded
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Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option
Agreement and the Plan set forth the entire understanding between Optionholder and the Company
regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder under the Plan, and (ii) the following agreements only:
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Stock Option Agreement, 1999 Equity Incentive Plan and Notice of Exercise.
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If this is an incentive stock option, it
(plus your other outstanding incentive stock options) cannot be first
exercisable
for more than $100,000 in any calendar year. Any excess
over $100,000 is a nonstatutory stock option.
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QuinStreet, Inc.
1999 Equity Incentive Plan
Stock Option Agreement
(Incentive and Nonstatutory Stock Options)
Pursuant to your Stock Option Grant Notice (Grant Notice) and this Stock Option Agreement,
QuinStreet, Inc.
(the Company) has granted you an option under its 1999 Equity Incentive
Plan (the Plan) to purchase the number of shares of the Companys Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as
in the Plan.
The details of your option are as follows:
1.
Vesting
. Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2.
Number of Shares and Exercise Price
. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments, as provided in the Plan.
3.
Exercise prior to Vesting (Early Exercise)
. If permitted in your Grant Notice
(i.e., the Exercise Schedule indicates that Early Exercise of your option is permitted) and
subject to the provisions of your option, you may elect at any time that is both (i) during the
period of your Continuous Service and (ii) during the term of your option, to exercise all or part
of your option, including the nonvested portion of your option; provided, however, that:
(a)
a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;
(b)
any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Companys form of Early Exercise Stock Purchase Agreement; and
(c)
you shall enter into the Companys form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred.
4.
ISO Exercise Limitation.
(a)
The aggregate Fair Market Value of the shares of Common Stock with respect to which you
may exercise your option for the first time during any calendar year, when
1
added to the aggregate Fair Market Value of the shares of Common Stock subject to any other
options designated as Incentive Stock Options and granted to you under any stock option plan of the
Company or an Affiliate prior to the Date of Grant with respect to which such options are
exercisable for the first time during the same calendar year, shall not exceed $100,000 (the ISO
Exercise Limitation) unless applicable law requires that your option be exercisable
sooner.
1
(b)
Notwithstanding the provisions of paragraph 4(a), if the ISO Exercise Limitation would
prevent you from exercising your option as to vested shares, then the ISO Exercise Limitation shall
terminate as to such vested shares thirty (30) days after such shares vest, and you may exercise
your option as to such vested shares. Upon such termination of the ISO Exercise Limitation, your
option shall be deemed a Nonstatutory Stock Option to the extent of the number of vested shares of
Common Stock subject to your option that would otherwise exceed the ISO Exercise Limitation.
(c)
The ISO Exercise Limitation shall terminate, and you may fully exercise your option, as to
all shares of Common Stock subject to your option for which your option would have been exercisable
in the absence of the ISO Exercise Limitation upon the earlier of the following events:
(i)
the date of termination of your Continuous Service,
(ii)
the day immediately prior to the effective date of a Change in Control (as defined in the
Plan) in which your option is not assumed or substituted for as provided in the Plan, or
(iii)
the day that is ten (10) days prior to the Expiration Date of your option.
Upon such termination of the ISO Exercise Limitation, your option shall be deemed a Nonstatutory
Stock Option to the extent of the number of shares of Common Stock subject to your option that
would otherwise then exceed the ISO Exercise Limitation.
5.
Method of Payment
. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner
permitted by your Grant Notice
, which may include one or more of the
following:
(a)
In the Companys sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in
The Wall Street
Journal
, pursuant to a program developed under Regulation T as promulgated
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For purposes of this provision, your
options designated as Incentive Stock Options shall be taken into account in
the order in which they were granted to you, and the Fair Market Value of
shares of Common Stock shall be determined as of the time the option with
respect to such shares of Common Stock is granted. If Section 422 of the Code
is amended to provide for a different limitation from that set forth in this
provision, the ISO Exercise Limitation shall be deemed amended effective as of
the date required or permitted by such amendment to the Code.
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by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either
the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the
aggregate exercise price to the Company from the sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in
The Wall Street Journal
, by delivery of already-owned shares of Common Stock either
that you have held for the period required to avoid a charge to the Companys reported earnings
(generally six months) or that you did not acquire, directly or indirectly from the Company, that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. Delivery for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
(c)
Pursuant to the following deferred payment alternative:
(i)
Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued
interest, shall be due four (4) years from date of exercise or, at the Companys election, upon
termination of your Continuous Service.
(ii)
Interest shall be compounded at least annually and shall be charged at the minimum rate
of interest necessary to avoid the treatment as interest, under any applicable provisions of the
Code, of any portion of any amounts other than amounts stated to be interest under the deferred
payment arrangement.
(iii)
At any time that the Company is incorporated in Delaware, payment of the Common Stocks
par value, as defined in the Delaware General Corporation Law, shall be made in cash and not by
deferred payment.
(iv)
In order to elect the deferred payment alternative, you must, as a part of your written
notice of exercise, give notice of the election of this payment alternative and, in order to secure
the payment of the deferred exercise price to the Company hereunder, if the Company so requests,
you must tender to the Company a promissory note and a security agreement covering the purchased
shares of Common Stock, both in form and substance satisfactory to the Company, or such other or
additional documentation as the Company may request.
6.
Whole Shares
. You may exercise your option only for whole shares of Common Stock.
7.
Securities Law Compliance
. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common
3
Stock are not then so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act. The exercise of your
option must also comply with other applicable laws and regulations governing your option, and you
may not exercise your option if the Company determines that such exercise would not be in material
compliance with such laws and regulations.
8.
Term
. The term of your option commences on the Date of Grant and expires upon the
earliest
of the following:
(a)
three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three- (3-) month period
your option is not exercisable solely because of the condition set forth in the preceding paragraph
relating to Securities Law Compliance, your option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months
after the termination of your Continuous Service;
(b)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c)
eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;
(d)
the Expiration Date indicated in your Grant Notice; or
(e)
the seventh (7th) anniversary of the Date of Grant.
If your option is an incentive stock option, note that, to obtain the federal income tax
advantages associated with an incentive stock option, the Code requires that at all times
beginning on the date of grant of your option and ending on the day three (3) months before the
date of your options exercise, you must be an employee of the Company or an Affiliate, except in
the event of your death or Disability. The Company has provided for extended exercisability of
your option under certain circumstances for your benefit but cannot guarantee that your option will
necessarily be treated as an incentive stock option if you continue to provide services to the
Company or an Affiliate as a Consultant or Director after your employment terminates or if you
otherwise exercise your option more than three (3) months after the date your employment
terminates.
9.
Exercise.
(a)
You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.
4
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.
(c)
If your option is an incentive stock option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
(d)
By exercising your option you agree that the Company (or a representative of the
underwriter(s)) may, in connection with the first underwritten registration of the offering of any
securities of the Company under the Securities Act, require that you not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any shares of Common Stock or other
securities of the Company held by you, for a period of time specified by the underwriter(s) (not to
exceed one hundred eighty (180) days) following the effective date of the registration statement of
the Company filed under the Securities Act. You further agree to execute and deliver such other
agreements as may be reasonably requested by the Company and/or the underwriter(s) that are
consistent with the foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to
your shares of Common Stock until the end of such period.
10.
Transferability
. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option.
11.
Right of First Refusal
. Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Companys bylaws
in effect at such time the Company elects to exercise its right. The Companys right of first
refusal shall expire on the Listing Date.
12.
Right of Repurchase
. To the extent provided in the Companys bylaws as amended
from time to time, the Company shall have the right to repurchase all or any part of the shares of
Common Stock you acquire pursuant to the exercise of your option.
13.
Option not a Service Contract
. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective shareholders, Boards of Directors, Officers
5
or Employees to continue any relationship that you might have as a Director or Consultant for
the Company or an Affiliate.
14.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
(b)
Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law.
If the date of determination of any tax withholding obligation is deferred to a date later than the
date of exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share withholding procedure shall
be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein.
15.
Notices
. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
16.
Governing Plan Document
. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
6
NOTICE OF EXERCISE
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QuinStreet,
Inc.
1051 E. Hillsdale Blvd.
Foster City, CA 94404
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Date of Exercise:
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Type of option (check one):
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Incentive
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Nonstatutory
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Certificates to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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$
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Promissory note delivered
herewith:
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$
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Value of
shares of
QuinStreet, Inc.
common stock delivered herewith
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$
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 1999 Equity Incentive Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the shares of Common
Stock issued upon exercise of this option that occurs within two (2) years after the date
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Shares must meet the public trading
requirements set forth in the option. Shares must be valued in accordance with
the terms of the option being exercised, must have been owned for the minimum
period required in the option, and must be owned free and clear of any liens,
claims, encumbrances or security interests. Certificates must be endorsed or
accompanied by an executed assignment separate from certificate.
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1.
of grant of this option or within one (1) year after such shares of Common Stock are issued
upon exercise of this option.
I hereby make the following certifications and representations with respect to the number of
shares of Common Stock of the Company listed above (the Shares), which are being acquired by me
for my own account upon exercise of the Option as set forth above:
I acknowledge that the Shares have not been registered under the Securities Act of 1933, as
amended (the Securities Act), and are deemed to constitute restricted securities under Rule 701
and control securities under Rule 144 promulgated under the Securities Act. I warrant and
represent to the Company that I have no present intention of distributing or selling said Shares,
except as permitted under the Securities Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for at least ninety days
(90) after the stock of the Company becomes publicly traded (
i.e.,
subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the Shares subject to the
provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing
limitations, as well as any legends reflecting restrictions pursuant to the Companys Articles of
Incorporation, Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of the underwriters) in
connection with the first underwritten registration of the offering of any securities of the
Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale of,
grant any option for the purchase of, or enter into any hedging or similar transaction with the
same economic effect as a sale, any Shares or other securities of the Company held by me, for a
period of time specified by the underwriter(s) (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed under the
Securities Act. I further agree to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that
are necessary to give further effect thereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to my Shares until the end of such
period.
Very truly yours,
2.
Exhibit 99.3
QUINSTREET, INC.
STOCK OPTION GRANT NOTICE Senior Management Personnel
(1999 EQUITY INCENTIVE PLAN)
QuinStreet, Inc. (the Company), pursuant to its 1999 Equity Incentive Plan (the Plan),
hereby grants to Optionholder an option to purchase the number of shares of the Companys Common
Stock set forth below. This option is subject to all of the terms and conditions as set forth
herein and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.
Optionholder:
Date of Grant:
Vesting Commencement Date:
Number of Shares Subject to Option:
Exercise Price (Per Share)
Total Exercise Price:
Expiration Date:
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Type of Grant:
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Incentive Stock Option
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Nonstatutory Stock Option
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Exercise Schedule
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Same as Vesting Schedule
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Early Exercise Permitted
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Vesting Schedule
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1/4
th
of the shares vest one year after the Vesting Commencement
Date.
1/48
th
of
the remaining shares vest monthly thereafter over the next three
years.
The vesting schedule may accelerate upon a Change in Control (described in the
Stock Option Agreement)
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Payment:
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By one or a combination of the following items (described in the Stock Option Agreement):
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By cash or check
Pursuant to a Regulation T Program if the Shares are publicly traded
By delivery of already-owned shares if the Shares are publicly traded
Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option
Agreement and the Plan set forth the entire understanding between Optionholder and the Company
regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder under the Plan, and (ii) the following agreements only:
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Stock Option Agreement, 1999 Equity Incentive Plan and Notice of Exercise
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If this is an incentive stock option, it
(plus your other outstanding incentive stock options) cannot be first
exercisable
for more than $100,000 in any calendar year. Any excess
over $100,000 is a nonstatutory stock option.
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Attachment I
STOCK OPTION AGREEMENT
QuinStreet, Inc.
1999 Equity Incentive Plan
Stock Option Agreement for Senior Management
(Incentive and Nonstatutory Stock Options)
Pursuant to your Stock Option Grant Notice (Grant Notice) and this Stock Option Agreement,
QuinStreet, Inc.
(the Company) has granted you an option under its 1999 Equity Incentive
Plan (the Plan) to purchase the number of shares of the Companys Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as
in the Plan.
The details of your option are as follows:
1.
Vesting
. Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2.
Number of Shares and Exercise Price
. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments, as provided in the Plan.
3.
Exercise prior to Vesting (Early Exercise)
. If permitted in your Grant Notice
(i.e., the Exercise Schedule indicates that Early Exercise of your option is permitted) and
subject to the provisions of your option, you may elect at any time that is both (i) during the
period of your Continuous Service and (ii) during the term of your option, to exercise all or part
of your option, including the nonvested portion of your option; provided, however, that:
(a)
a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;
(b)
any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Companys form of Early Exercise Stock Purchase Agreement; and
(c)
you shall enter into the Companys form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred.
4.
ISO Exercise Limitation.
(a)
The aggregate Fair Market Value of the shares of Common Stock with respect to which you
may exercise your option for the first time during any calendar year, when
1
added to the aggregate Fair Market Value of the shares of Common Stock subject to any other
options designated as Incentive Stock Options and granted to you under any stock option plan of the
Company or an Affiliate prior to the Date of Grant with respect to which such options are
exercisable for the first time during the same calendar year, shall not exceed $100,000 (the ISO
Exercise Limitation) unless applicable law requires that your option be exercisable
sooner.
1
(b)
Notwithstanding the provisions of paragraph 4(a), if the ISO Exercise Limitation would
prevent you from exercising your option as to vested shares, then the ISO Exercise Limitation shall
terminate as to such vested shares thirty (30) days after such shares vest, and you may exercise
your option as to such vested shares. Upon such termination of the ISO Exercise Limitation, your
option shall be deemed a Nonstatutory Stock Option to the extent of the number of vested shares of
Common Stock subject to your option that would otherwise exceed the ISO Exercise Limitation.
(c)
The ISO Exercise Limitation shall terminate, and you may fully exercise your option, as to
all shares of Common Stock subject to your option for which your option would have been exercisable
in the absence of the ISO Exercise Limitation upon the earlier of the following events:
(i)
the date of termination of your Continuous Service,
(ii)
the day immediately prior to the effective date of a Change in Control (as defined in the
Plan) in which your option is not assumed or substituted for as provided in the Plan, or
(iii)
the day that is ten (10) days prior to the Expiration Date of your option.
Upon such termination of the ISO Exercise Limitation, your option shall be deemed a Nonstatutory
Stock Option to the extent of the number of shares of Common Stock subject to your option that
would otherwise then exceed the ISO Exercise Limitation.
5.
Method of Payment
. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner
permitted by your Grant Notice
, which may include one or more of the
following:
(a)
In the Companys sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in
The Wall Street
Journal
, pursuant to a program developed under Regulation T as promulgated
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For purposes of this provision, your
options designated as Incentive Stock Options shall be taken into account in
the order in which they were granted to you, and the Fair Market Value of
shares of Common Stock shall be determined as of the time the option with
respect to such shares of Common Stock is granted. If Section 422 of the Code
is amended to provide for a different limitation from that set forth in this
provision, the ISO Exercise Limitation shall be deemed amended effective as of
the date required or permitted by such amendment to the Code.
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2
by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either
the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the
aggregate exercise price to the Company from the sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in
The Wall Street Journal
, by delivery of already-owned shares of Common Stock either
that you have held for the period required to avoid a charge to the Companys reported earnings
(generally six months) or that you did not acquire, directly or indirectly from the Company, that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. Delivery for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
(c)
Pursuant to the following deferred payment alternative:
(i)
Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued
interest, shall be due four (4) years from date of exercise or, at the Companys election, upon
termination of your Continuous Service.
(ii)
Interest shall be compounded at least annually and shall be charged at the minimum rate
of interest necessary to avoid the treatment as interest, under any applicable provisions of the
Code, of any portion of any amounts other than amounts stated to be interest under the deferred
payment arrangement.
(iii)
At any time that the Company is incorporated in Delaware, payment of the Common Stocks
par value, as defined in the Delaware General Corporation Law, shall be made in cash and not by
deferred payment.
(iv)
In order to elect the deferred payment alternative, you must, as a part of your written
notice of exercise, give notice of the election of this payment alternative and, in order to secure
the payment of the deferred exercise price to the Company hereunder, if the Company so requests,
you must tender to the Company a promissory note and a security agreement covering the purchased
shares of Common Stock, both in form and substance satisfactory to the Company, or such other or
additional documentation as the Company may request.
6.
Whole Shares
. You may exercise your option only for whole shares of Common Stock.
7.
Securities Law Compliance
. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common
3
Stock are not then so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act. The exercise of your
option must also comply with other applicable laws and regulations governing your option, and you
may not exercise your option if the Company determines that such exercise would not be in material
compliance with such laws and regulations.
8.
Term
. The term of your option commences on the Date of Grant and expires upon the
earliest
of the following:
(a)
three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three- (3-) month period
your option is not exercisable solely because of the condition set forth in the preceding paragraph
relating to Securities Law Compliance, your option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months
after the termination of your Continuous Service;
(b)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c)
eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;
(d)
the Expiration Date indicated in your Grant Notice; or
(e)
the seventh (7th) anniversary of the Date of Grant.
If your option is an incentive stock option, note that, to obtain the federal income tax
advantages associated with an incentive stock option, the Code requires that at all times
beginning on the date of grant of your option and ending on the day three (3) months before the
date of your options exercise, you must be an employee of the Company or an Affiliate, except in
the event of your death or Disability. The Company has provided for extended exercisability of
your option under certain circumstances for your benefit but cannot guarantee that your option will
necessarily be treated as an incentive stock option if you continue to provide services to the
Company or an Affiliate as a Consultant or Director after your employment terminates or if you
otherwise exercise your option more than three (3) months after the date your employment
terminates.
9.
Exercise.
(a)
You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.
4
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.
(c)
If your option is an incentive stock option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
(d)
By exercising your option you agree that the Company (or a representative of the
underwriter(s)) may, in connection with the first underwritten registration of the offering of any
securities of the Company under the Securities Act, require that you not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any shares of Common Stock or other
securities of the Company held by you, for a period of time specified by the underwriter(s) (not to
exceed one hundred eighty (180) days) following the effective date of the registration statement of
the Company filed under the Securities Act. You further agree to execute and deliver such other
agreements as may be reasonably requested by the Company and/or the underwriter(s) that are
consistent with the foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to
your shares of Common Stock until the end of such period.
10.
Change in Control.
In the event of a Change in Control, (as defined below), the
unvested portion of your option, if any, shall vest in accordance with the vesting schedule
described your Stock Option Grant Notice. If your employment terminates due to an Involuntary
Termination Without Cause or a Resignation for Good Reason (as defined below) within six (6)
months, in either case, following the effective date of a Change in Control, twenty-five percent
(25%) of the portion of your option subject to vesting that is unvested on the effective date of
such termination will vest immediately upon such termination.
(a) Change in Control
means:
(i)
a dissolution, liquidation or sale of all or substantially all of the assets of the
Company;
(ii)
a merger or consolidation in which the Company is not the surviving corporation (other
than a merger or consolidation in which stockholders of the Company immediately before the merger
or consolidation have, immediately
after
the merger or consolidation, more than fifty percent (50%)
of the stock voting power of the surviving entity and are entitled to elect a majority of the
members of the Board of Directors or similar governing body of the surviving entity);
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(iii)
a reverse merger in which the Company is the surviving corporation but the shares of the
Companys common stock outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or otherwise (other than a
reverse merger in which stockholders of the Company immediately before the merger have, immediately
after
the merger, more than fifty percent (50%) of the stock voting power of the surviving entity
and are entitled to elect a majority of the members of the Board of Directors or similar governing
body of the surviving entity); or
(iv)
any transaction or series of related transactions in which in excess of fifty percent
(50%) of the Companys voting power is transferred.
(b) Involuntary Termination Without Cause
means your dismissal or discharge by the Company
for a reason other than for Cause. The termination of your employment as a result of death or
disability shall not be deemed to be an Involuntary Termination Without Cause. Cause means that,
in the determination of the Board, you:
(i)
have been convicted (including a guilty plea or no contest) of any felony or any crime
involving dishonesty that is likely to inflict or has inflicted demonstrable and material injury on
the business of the Company;
(ii)
have participated in any fraud against the Company;
(iii)
have intentionally damaged any property of the Company thereby causing demonstrable and
material injury to the business of the Company; or
(iv)
have willfully and habitually neglected your duties to the Company.
(c) Resignation for Good Reason
means that you voluntarily terminate employment after any of
the following are undertaken without your express written consent:
(i)
the assignment to you of any duties or responsibilities that results in a significant
diminution in your employment role in the Company as in effect immediately prior to the effective
date of the Change in Control;
provided, however,
that mere changes in your title or reporting
relationships alone shall not constitute a basis for Resignation for Good Reason;
(ii)
a greater than five percent (5%) aggregate reduction by the Company in your annual base
salary, as in effect on the effective date of the Change in Control or as increased thereafter;
provided, however,
that if there are across-the-board proportionate salary reductions for all
officers, management-level and other salaried employees due to the financial condition of the
Company, a greater than ten percent (10%) aggregate reduction by the Company in your annual base
salary will be required;
(iii)
any failure by the Company to continue in effect any benefit plan or program, including
fringe benefits, incentive plans and plans with respect to the receipt of
6
securities of the Company, in which you are participating immediately prior to the effective
date of the Change in Control (hereinafter referred to as Benefit Plans), or the taking of any
action by the Company that would adversely affect your participation in or reduce your benefits
under the Benefit Plans;
provided, however
, that a basis for Resignation for Good Reason shall not
exist under this clause (c) following a Change in Control if the Company offers a range of benefit
plans and programs that, taken as a whole, is comparable to the Benefit Plans; or
(iv)
a non-temporary relocation of your business office to a location more than fifty (50)
miles from the location at which you perform duties as of the effective date of the Change in
Control, except for required travel by you on the Companys business to an extent substantially
consistent with your business travel obligations prior to the Change in Control.
11.
Transferability
. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option.
12.
Right of First Refusal
. Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Companys bylaws
in effect at such time the Company elects to exercise its right. The Companys right of first
refusal shall expire on the Listing Date.
13.
Right of Repurchase
. To the extent provided in the Companys bylaws as amended
from time to time, the Company shall have the right to repurchase all or any part of the shares of
Common Stock you acquire pursuant to the exercise of your option.
14.
Option not a Service Contract
. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
15.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
7
(b)
Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law.
If the date of determination of any tax withholding obligation is deferred to a date later than the
date of exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share withholding procedure shall
be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein.
16.
Notices
. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
17.
Governing Plan Document
. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
8
Attachment II
1999 EQUITY INCENTIVE PLAN
Attachment III
NOTICE OF EXERCISE
NOTICE OF EXERCISE
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QuinStreet,
Inc.
1051 E. Hillsdale Blvd.
Foster City, CA 94404
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Date of Exercise:
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Type of option (check one):
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Incentive
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Nonstatutory
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Certificates to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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$
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Promissory note delivered
herewith:
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$
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Value of
shares of
QuinStreet, Inc.
common stock delivered herewith
1
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$
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 1999 Equity Incentive Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the shares of Common
Stock issued upon exercise of this option that occurs within two (2) years after the date
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1
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Shares must meet the public trading
requirements set forth in the option. Shares must be valued in accordance with
the terms of the option being exercised, must have been owned for the minimum
period required in the option, and must be owned free and clear of any liens,
claims, encumbrances or security interests. Certificates must be endorsed or
accompanied by an executed assignment separate from certificate.
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1.
of grant of this option or within one (1) year after such shares of Common Stock are issued
upon exercise of this option.
I hereby make the following certifications and representations with respect to the number of
shares of Common Stock of the Company listed above (the Shares), which are being acquired by me
for my own account upon exercise of the Option as set forth above:
I acknowledge that the Shares have not been registered under the Securities Act of 1933, as
amended (the Securities Act), and are deemed to constitute restricted securities under Rule 701
and control securities under Rule 144 promulgated under the Securities Act. I warrant and
represent to the Company that I have no present intention of distributing or selling said Shares,
except as permitted under the Securities Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for at least ninety days
(90) after the stock of the Company becomes publicly traded (
i.e.,
subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the Shares subject to the
provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing
limitations, as well as any legends reflecting restrictions pursuant to the Companys Articles of
Incorporation, Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of the underwriters) in
connection with the first underwritten registration of the offering of any securities of the
Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale of,
grant any option for the purchase of, or enter into any hedging or similar transaction with the
same economic effect as a sale, any Shares or other securities of the Company held by me, for a
period of time specified by the underwriter(s) (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed under the
Securities Act. I further agree to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that
are necessary to give further effect thereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to my Shares until the end of such
period.
Very truly yours,
2.
Exhibit 99.4
QUINSTREET, INC.
STOCK OPTION GRANT NOTICE NON-EMPLOYEE DIRECTOR
(1999 EQUITY INCENTIVE PLAN)
QuinStreet, Inc. (the Company), pursuant to its 1999 Equity Incentive Plan (the Plan),
hereby grants to Optionholder an option to purchase the number of shares of the Companys Common
Stock set forth below. This option is subject to all of the terms and conditions as set forth
herein and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.
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Optionholder:
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Date of Grant:
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Vesting Commencement Date:
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Number of Shares Subject to Option:
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Exercise Price (Per Share):
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Total Exercise Price:
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Expiration Date:
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Type of Grant:
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Nonstatutory Stock Option
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Exercise Schedule
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þ
Same as Vesting Schedule
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Early Exercise Permitted
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Vesting Schedule
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1/36
th
of the shares
vest monthly over three years.
The vesting schedule may accelerate upon a Change in Control (as defined in the Stock Option Agreement).
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Payment:
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By one or a combination of the following items (described in the Stock Option Agreement):
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By cash or check
Pursuant to a Regulation T Program if the Shares are publicly traded
By delivery of already-owned shares if the Shares are publicly traded
Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option
Agreement and the Plan set forth the entire understanding between Optionholder and the Company
regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder under the Plan, and (ii) the following agreements only:
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Stock Option Agreement, 1999 Equity Incentive Plan and Notice of Exercise
QuinStreet, Inc.
1999 Equity Incentive Plan
Stock Option Agreement for Non-Employee Directors
(Nonstatutory Stock Options)
Pursuant to your Stock Option Grant Notice (Grant Notice) and this Stock Option Agreement,
QuinStreet, Inc.
(the Company) has granted you an option under its 1999 Equity Incentive
Plan (the Plan) to purchase the number of shares of the Companys Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as
in the Plan.
The details of your option are as follows:
1.
Vesting
. Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2.
Number of Shares and Exercise Price
. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments, as provided in the Plan.
3.
Exercise prior to Vesting (Early Exercise)
. If permitted in your Grant Notice
(i.e., the Exercise Schedule indicates that Early Exercise of your option is permitted) and
subject to the provisions of your option, you may elect at any time that is both (i) during the
period of your Continuous Service and (ii) during the term of your option, to exercise all or part
of your option, including the unvested portion of your option; provided, however, that:
(a)
a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;
(b)
any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Companys form of Early Exercise Stock Purchase Agreement; and
(c)
you shall enter into the Companys form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred.
4.
Method of Payment
. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner
permitted by your Grant Notice
, which may include one or more of the
following:
1
(a)
In the Companys sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in
The Wall Street
Journal
, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in
The Wall Street Journal
, by delivery of already-owned shares of Common Stock either
that you have held for the period required to avoid a charge to the Companys reported earnings
(generally six months) or that you did not acquire, directly or indirectly from the Company, that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. Delivery for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
(c)
Pursuant to the following deferred payment alternative:
(i)
Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued
interest, shall be due not later than four (4) years from date of exercise or, at the Companys
election, upon termination of your Continuous Service.
(ii)
Interest shall be compounded at least annually and shall be charged at the minimum rate
of interest necessary to avoid the treatment as interest, under any applicable provisions of the
Code, of any portion of any amounts other than amounts stated to be interest under the deferred
payment arrangement.
(iii)
At any time that the Company is incorporated in Delaware, payment of the Common Stocks
par value, as defined in the Delaware General Corporation Law, shall be made in cash and not by
deferred payment.
(iv)
In order to elect the deferred payment alternative, you must, as a part of your written
notice of exercise, give notice of the election of this payment alternative and, in order to secure
the payment of the deferred exercise price to the Company hereunder, if the Company so requests,
you must tender to the Company a promissory note and a security agreement covering the purchased
shares of Common Stock, both in form and substance satisfactory to the Company, or such other or
additional documentation as the Company may request.
5.
Whole Shares
. You may exercise your option only for whole shares of Common Stock.
2
6.
Securities Law Compliance
. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option must also comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
7.
Term
. The term of your option commences on the Date of Grant and expires upon the
earliest
of the following:
(a)
three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three- (3-) month period
your option is not exercisable solely because of the condition set forth in the preceding paragraph
relating to Securities Law Compliance, your option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months
after the termination of your Continuous Service;
(b)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c)
eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;
(d)
the Expiration Date indicated in your Grant Notice; or
(e)
the seventh (7th) anniversary of the Date of Grant.
8.
Exercise.
(a)
You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, or (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise.
(c)
By exercising your option you agree that the Company (or a representative of the
underwriter(s)) may, in connection with the first underwritten registration of the offering of any
securities of the Company under the Securities Act, require that you not sell, dispose of,
3
transfer, make any short sale of, grant any option for the purchase of, or enter into any
hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock
or other securities of the Company held by you, for a period of time specified by the
underwriter(s) (not to exceed one hundred eighty (180) days) following the effective date of the
registration statement of the Company filed under the Securities Act. You further agree to execute
and deliver such other agreements as may be reasonably requested by the Company and/or the
underwriter(s) that are consistent with the foregoing or that are necessary to give further effect
thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to your shares of Common Stock until the end of such period.
9.
Change in Control.
In the event of a Change in Control, (as defined below), the
unvested portion of your option, if any, will vest immediately upon such Change in Control.
(a) Change in Control
means:
(i)
a dissolution, liquidation or sale of all or substantially all of the assets of the
Company;
(ii)
a merger or consolidation in which the Company is not the surviving corporation (other
than a merger or consolidation in which stockholders of the Company immediately before the merger
or consolidation have, immediately
after
the merger or consolidation, more than fifty percent (50%)
of the stock voting power of the surviving entity and are entitled to elect a majority of the
members of the Board of Directors or similar governing body of the surviving entity);
(iii)
a reverse merger in which the Company is the surviving corporation but the shares of the
Companys Common Stock outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or otherwise (other than a
reverse merger in which stockholders of the Company immediately before the merger have, immediately
after
the merger, more than fifty percent (50%) of the stock voting power of the surviving entity
and are entitled to elect a majority of the members of the Board of Directors or similar governing
body of the surviving entity); or
(iv)
any transaction or series of related transactions in which in excess of fifty percent
(50%) of the Companys voting power is transferred.
10.
Transferability
. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option.
11.
Right of First Refusal
. Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Companys bylaws
in effect at such time the Company elects to exercise its right. The Companys right of first
refusal shall expire on the Listing Date.
4
12.
Right of Repurchase
. To the extent provided in the Companys bylaws as amended
from time to time, the Company shall have the right to repurchase all or any part of the shares of
Common Stock you acquire pursuant to the exercise of your option.
13.
Option not a Service Contract
. Nothing in your option shall obligate the
Company, its shareholders, Board of Directors, Officers or Employees to continue any relationship
that you might have as a Director or Consultant for the Company. Your option is not an employment
or service contract, and nothing in your option shall be deemed to create in any way whatsoever any
obligation on your part to continue in the service of the Company or of the Company to continue
your service.
14.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company, if any, which arise
in connection with your option.
(b)
Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law.
If the date of determination of any tax withholding obligation is deferred to a date later than the
date of exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share withholding procedure shall
be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company are
satisfied. Accordingly, you may not be able to exercise your option when desired even though your
option is vested, and the Company shall have no obligation to issue a certificate for such shares
of Common Stock or release such shares of Common Stock from any escrow provided for herein.
15.
Notices
. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
5
mail by the Company to you, five (5) days after deposit in the United States mail, postage
prepaid, addressed to you at the last address you provided to the Company.
16.
Governing Plan Document
. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
6
NOTICE OF EXERCISE
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QuinStreet,
Inc.
1051 E. Hillsdale Blvd.
Foster City, CA 94404
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Date of Exercise:
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Type of option (check one):
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Incentive
o
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Nonstatutory
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Certificates to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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Promissory note delivered
herewith:
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$
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Value of
shares of
QuinStreet, Inc.
common stock delivered herewith
1
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$
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 1999 Equity Incentive Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the shares of Common
Stock issued upon exercise of this option that occurs within two (2) years after the date
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1
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Shares must meet the public trading
requirements set forth in the option. Shares must be valued in accordance with
the terms of the option being exercised, must have been owned for the minimum
period required in the option, and must be owned free and clear of any liens,
claims, encumbrances or security interests. Certificates must be endorsed or
accompanied by an executed assignment separate from certificate.
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1.
of grant of this option or within one (1) year after such shares of Common Stock are issued
upon exercise of this option.
I hereby make the following certifications and representations with respect to the number of
shares of Common Stock of the Company listed above (the Shares), which are being acquired by me
for my own account upon exercise of the Option as set forth above:
I acknowledge that the Shares have not been registered under the Securities Act of 1933, as
amended (the Securities Act), and are deemed to constitute restricted securities under Rule 701
and control securities under Rule 144 promulgated under the Securities Act. I warrant and
represent to the Company that I have no present intention of distributing or selling said Shares,
except as permitted under the Securities Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for at least ninety days
(90) after the stock of the Company becomes publicly traded (
i.e.,
subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the Shares subject to the
provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing
limitations, as well as any legends reflecting restrictions pursuant to the Companys Articles of
Incorporation, Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of the underwriters) in
connection with the first underwritten registration of the offering of any securities of the
Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale of,
grant any option for the purchase of, or enter into any hedging or similar transaction with the
same economic effect as a sale, any Shares or other securities of the Company held by me, for a
period of time specified by the underwriter(s) (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed under the
Securities Act. I further agree to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that
are necessary to give further effect thereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to my Shares until the end of such
period.
Very truly yours,
2.
Exhibit 99.5
QuinStreet, Inc.
2008 Equity Incentive Plan
Adopted by the Board of Directors: January 30, 2008
Approved by the Shareholders: January 30, 2008
Amended by the Board of Directors: July 25, 2008
Amendment approved by the Shareholders: July 25, 2008
Amended by the Board of Directors: August 7, 2009
Amendment Approved by the Shareholders: August 7, 2009
Termination Date: January 29, 2018
1.
General.
(a) Amendment and Restatement
. The Plan is adopted to amend and restate the Companys 1999
Equity Incentive Plan (the
Original Plan
). All outstanding stock awards granted before the
adoption of the amendment and restatement of the Original Plan by the Board shall continue to be
governed by the terms of the Original Plan, except as provided by Section 9(l). All Stock Awards
granted after the Effective Date shall be governed by the terms contained herein.
(b) Eligible Stock Award Recipients.
The persons eligible to receive Stock Awards are
Employees, Directors and Consultants.
(c) Available Stock Awards.
The Plan provides for the grant of the following Stock Awards:
(i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Restricted Stock Awards, and
(iv) Restricted Stock Unit Awards.
(d) Purpose.
The Company, by means of the Plan, seeks to secure and retain the services of
the group of persons eligible to receive Stock Awards as set forth in Section 1(b), to provide
incentives for such persons to exert maximum efforts for the success of the Company and any
Affiliate, and to provide a means by which such eligible recipients may be given an opportunity to
benefit from increases in value of the Common Stock through the granting of Stock Awards.
2.
Definitions.
As used in the Plan, the following definitions shall apply to the
capitalized terms indicated below:
(a)
Affiliate
means, at the time of determination, any parent or majority-owned
subsidiary of the Company, as such terms are defined in Rule 405 of the Securities Act. The Board
shall have the authority to determine the time or times at which parent or majority-owned
subsidiary status is determined within the foregoing definition.
(b)
Board
means the Board of Directors of the Company.
1.
(c)
Capitalization Adjustment
means any change that is made in, or other events that occur
with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the
Effective Date without the receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than
cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in
corporate structure or other transaction not involving the receipt of consideration by the
Company). Notwithstanding the foregoing, the conversion of any convertible securities of the
Company shall not be treated as a transaction without the receipt of consideration by the
Company.
(d)
Change in Control
means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
(i)
any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Companys
then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person that acquires the Companys securities in a transaction or series of related
transactions the primary purpose of which is to obtain financing for the Company through the
issuance of equity securities or (B) solely because the level of Ownership held by any Exchange Act
Person (the
Subject Person
) exceeds the designated percentage threshold of the outstanding voting
securities as a result of a repurchase or other acquisition of voting securities by the Company
reducing the number of shares outstanding, provided that if a Change in Control would occur (but
for the operation of this sentence) as a result of the acquisition of voting securities by the
Company, and after such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not occurred, increases
the percentage of the then outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control shall be deemed to occur;
(ii)
there is consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately after the consummation of such merger, consolidation or
similar transaction, the shareholders of the Company immediately prior thereto do not Own, directly
or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%)
of the combined outstanding voting power of the surviving Entity in such merger, consolidation or
similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power
of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions as their Ownership of the outstanding voting securities
of the Company immediately prior to such transaction;
(iii)
there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all of the consolidated assets
2.
of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by shareholders of the Company in
substantially the same proportions as their Ownership of the outstanding voting securities of the
Company immediately prior to such sale, lease, license or other disposition; or
(iv)
individuals who, on the date this Plan is adopted by the Board, are members of the Board
(the
Incumbent Board
) cease for any reason to constitute at least a majority of the members of
the Board;
provided, however,
that if the appointment or election (or nomination for election) of
any new Board member was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of this Plan, be considered as a
member of the Incumbent Board.
Notwithstanding the foregoing definition or any other provision of this Plan, (A) the term Change
in Control shall not include a sale of assets, merger or other transaction effected exclusively for
the purpose of changing the domicile of the Company, and (B) the definition of Change in Control
(or any analogous term) in an individual written agreement between the Company or any Affiliate and
the Participant shall supersede the foregoing definition with respect to Stock Awards subject to
such agreement;
provided, however,
that if no definition of Change in Control or any analogous term
is set forth in such an individual written agreement, the foregoing definition shall apply.
(e)
Code
means the Internal Revenue Code of 1986, as amended.
(f)
Committee
means a committee of two (2) or more Directors to whom authority has been
delegated by the Board in accordance with Section 3(c).
(g)
Common Stock
means the common stock of the Company.
(h)
Company
means QuinStreet, Inc., a California corporation.
(i)
Consultant
means any person, including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is compensated for such services, or
(ii) serving as a member of the board of directors of an Affiliate and is compensated for such
services. However, service solely as a Director, or payment of a fee for such service, shall not
cause a Director to be considered a Consultant for purposes of the Plan.
(j)
Continuous Service
means that the Participants service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or an Affiliate as
an Employee, Director, or Consultant or a change in the Entity for which the Participant renders
such service, provided that there is no interruption or termination of the Participants service
with the Company or an Affiliate, shall not terminate a Participants Continuous Service;
provided,
however
, if the Entity for which a Participant is rendering service ceases to qualify as an
Affiliate, as determined by the Board in its sole discretion, such Participants Continuous Service
shall be considered to have terminated on the date such Entity ceases to qualify as an Affiliate.
For example, a change in status from an employee of the Company to a consultant of
3.
an Affiliate or to a Director shall not constitute an interruption of Continuous Service. To
the extent permitted by law, the Board or the chief executive officer of the Company, in that
partys sole discretion, may determine whether Continuous Service shall be considered interrupted
in the case of any leave of absence approved by that party, including sick leave, military leave or
any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as
Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided
in the Companys leave of absence policy, in the written terms of any leave of absence agreement or
policy applicable to the Participant, or as otherwise required by law.
(k)
Corporate Transaction
means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
(i)
the consummation of a sale or other disposition of all or substantially all, as determined
by the Board in its sole discretion, of the consolidated assets of the Company and its
Subsidiaries;
(ii)
the consummation of a sale or other disposition of at least ninety percent (90%) of the
outstanding securities of the Company;
(iii)
the consummation of a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or
(iv)
the consummation of a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of
the merger, consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise.
(l)
Director
means a member of the Board.
(m)
Disability
means the inability of a Participant to engage in any substantially gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months, and shall be determined by the Board on the basis of such
medical evidence as the Board deems warranted under the circumstances.
(n)
Effective Date
means the effective date of this Plan, which is the earlier of (i) the
date that this Plan is first approved by the Companys shareholders, or (ii) the date this Plan is
adopted by the Board.
(o)
Employee
means any person employed by the Company or an Affiliate. However, service
solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an Employee for purposes of the Plan.
(p)
Entity
means a corporation, partnership, limited liability company or other entity.
4.
(q)
Exchange Act
means the Securities Exchange Act of 1934, as amended.
(r)
Exchange Act Person
means any natural person, Entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that Exchange Act Person shall not include
(i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or
any Subsidiary of the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned,
directly or indirectly, by the shareholders of the Company in substantially the same proportions as
their Ownership of stock of the Company; or (v) any natural person, Entity or group (within the
meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date of the Plan
as set forth in Section 12, is the Owner, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power of the Companys then
outstanding securities.
(s)
Fair Market Value
means, as of any date, the value of the Common Stock determined by the
Board in compliance with Section 409A of the Code or, in the case of an Incentive Stock Option, in
compliance with Section 422 of the Code.
(t)
Incentive Stock Option
means an Option that qualifies as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(u)
Nonstatutory Stock Option
means an Option that does not qualify as an Incentive Stock
Option.
(v)
Officer
means any person designated by the Company as an officer.
(w)
Option
means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares
of Common Stock granted pursuant to the Plan.
(x)
Option Agreement
means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to
the terms and conditions of the Plan.
(y)
Optionholder
means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.
(z)
Own
,
Owned
,
Owner
,
Ownership
A person or Entity shall be deemed to Own, to have
Owned, to be the Owner of, or to have acquired Ownership of securities if such person or
Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities.
(aa)
Participant
means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.
5.
(bb)
Plan
means this QuinStreet, Inc. 2008 Equity Incentive Plan.
(cc)
Restricted Stock Award
means an award of shares of Common Stock which is granted
pursuant to the terms and conditions of Section 7(a).
(dd)
Restricted Stock Award Agreement
means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award.
Each Restricted Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(ee)
Restricted Stock Unit Award
means a right to receive shares of Common Stock which is
granted pursuant to the terms and conditions of Section 7(b).
(ff)
Restricted Stock Unit Award Agreement
means a written agreement between the Company and
a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock
Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and
conditions of the Plan.
(gg)
Securities Act
means the Securities Act of 1933, as amended.
(hh)
Stock Award
means any right to receive Common Stock granted under the Plan, including
an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, or a Restricted
Stock Unit Award.
(ii)
Stock Award Agreement
means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan.
(jj)
Subsidiary
means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company,
and (ii) any partnership, limited liability company or other entity in which the Company has a
direct or indirect interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%) .
(kk)
Ten Percent Shareholder
means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Affiliate.
3.
Administration.
(a) Administration by Board.
The Board shall administer the Plan unless and until the Board
delegates administration of the Plan to a Committee, as provided in Section 3(c).
6.
(b) Powers of Board.
The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i)
To determine from time to time (A) which of the persons eligible under the Plan shall be
granted Stock Awards; (B) when and how each Stock Award shall be granted; (C) what type or
combination of types of Stock Award shall be granted; (D) the provisions of each Stock Award
granted (which need not be identical), including the time or times when a person shall be permitted
to receive cash or Common Stock pursuant to a Stock Award; (E) the number of shares of Common Stock
with respect to which a Stock Award shall be granted to each such person; and (F) the Fair Market
Value applicable to a Stock Award.
(ii)
To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for administration of the Plan. The Board, in the exercise
of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan or
Stock Award fully effective.
(iii)
To settle all controversies regarding the Plan and Stock Awards granted under it.
(iv)
To accelerate the time at which a Stock Award may first be exercised or the time during
which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the
provisions in the Stock Award stating the time at which it may first be exercised or the time
during which it will vest.
(v)
To suspend or terminate the Plan at any time. Suspension or termination of the Plan shall
not impair rights and obligations under any Stock Award granted while the Plan is in effect except
with the written consent of the affected Participant.
(vi)
To amend the Plan in any respect the Board deems necessary or advisable, including,
without limitation, relating to Incentive Stock Options and certain nonqualified deferred
compensation under Section 409A of the Code and/or to bring the Plan or Stock Awards granted under
the Plan into compliance therewith, subject to the limitations, if any, of applicable law. However,
except as provided in Section 10(a) relating to Capitalization Adjustments, to the extent required
by applicable law, shareholder approval shall be required for any amendment of the Plan that either
(i) materially increases the number of shares of Common Stock available for issuance under the
Plan, (ii) materially expands the class of individuals eligible to receive Stock Awards under the
Plan, (iii) materially increases the benefits accruing to Participants under the Plan or materially
reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (iv)
materially extends the term of the Plan, or (v) expands the types of Stock Awards available for
issuance under the Plan. Except as provided above, rights under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless (i) the Company
requests the consent of the affected Participant, and (ii) such Participant consents in writing.
7.
(vii)
To submit any amendment to the Plan for shareholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section 422 of the Code
regarding Incentive Stock Options.
(viii)
To approve forms of Stock Award Agreements for use under the Plan and to amend the
terms of any one or more Stock Awards, including, but not limited to, amendments to provide terms
more favorable than previously provided in the Stock Award Agreement, subject to any specified
limits in the Plan that are not subject to Board discretion;
provided however,
that, the rights
under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests
the consent of the affected Participant, and (ii) such Participant consents in writing.
Notwithstanding the foregoing, subject to the limitations of applicable law, if any, and without
the affected Participants consent, the Board may amend the terms of any one or more Stock Awards
if necessary to maintain the qualified status of the Stock Award as an Incentive Stock Option or to
bring the Stock Award into compliance with Section 409A of the Code and the related guidance
thereunder.
(ix)
Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company and that are not in conflict with the
provisions of the Plan or Stock Awards.
(x)
To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Directors or Consultants who are foreign nationals or
employed outside the United States.
(xi)
To effect, at any time and from time to time, with the consent of any adversely affected
Optionholder, (1) the reduction of the exercise price of any outstanding Option under the Plan, (2)
the cancellation of any outstanding Option under the Plan and the grant in substitution therefor of
(A) a new Option under the Plan or another equity plan of the Company covering the same or a
different number of shares of Common Stock, (B) a Restricted Stock Award, (C) a Restricted Stock
Unit, (D) cash and/or (E) other valuable consideration (as determined by the Board, in its sole
discretion), or (3) any other action that is treated as a repricing under generally accepted
accounting principles;
provided, however
, that no such reduction or cancellation may be effected if
it is determined, in the Companys sole discretion, that such reduction or cancellation would
result in any such outstanding Option becoming subject to the requirements of Section 409A of the
Code.
8.
(c) Delegation to Committee.
The Board may delegate some or all of the administration of the
Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board that have been delegated to the Committee, including the power to delegate
to a subcommittee of the Committee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the
Plan, as may be adopted from time to time by the Board. The Board may retain the authority to
concurrently administer the Plan with the Committee and may, at any time, revest in the Board some
or all of the powers previously delegated.
(d) Effect of Boards Decision.
All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.
4.
Shares Subject to the Plan.
(a) Share Reserve
. Subject to Section 10(a) relating to Capitalization Adjustments, the
aggregate number of shares of Common Stock of the Company that may be issued pursuant to Stock
Awards after the Effective Date shall not exceed eighteen million three hundred fifty-six thousand
(18,356,000) shares. For clarity, the limitation in this Section 4(a) is a limitation of the
number of shares of Common Stock that may be issued pursuant to the Plan. Accordingly, this
Section 4(a) does not limit the granting of Stock Awards except as provided in Section 8(a).
(b) Reversion of Shares to the Share Reserve
. If any shares of Common Stock issued pursuant
to a Stock Award are forfeited back to the Company because of the failure to meet a contingency or
condition required to vest such shares in the Participant, then the shares which are forfeited
shall revert to and again become available for issuance under the Plan. Also, any shares
reacquired by the Company pursuant to Section 9(g) or as consideration for the exercise of an
Option shall again become available for issuance under the Plan. Furthermore, if a Stock Award (i)
expires or otherwise terminates without having been exercised in full or (ii) is settled in cash
(
i.e.
, the holder of the Stock Award receives cash rather than stock), such expiration, termination
or settlement shall not reduce (or otherwise offset) the number of shares of Common Stock that may
be issued pursuant to the Plan. Notwithstanding the provisions of this Section 4(b), any such
shares shall not be subsequently issued pursuant to the exercise of Incentive Stock Options.
(c) Incentive Stock Option Limit.
Notwithstanding anything to the contrary in this Section
4(c), subject to the provisions of Section 10(a) relating to Capitalization Adjustments, the
aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of
Incentive Stock Options shall be thirteen million one hundred forty-one thousand one hundred
sixty-four (13,141,164) shares of Common Stock.
(d) Source of Shares.
The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the Company on the open
market.
9.
5.
Eligibility.
(a) Eligibility for Specific Stock Awards
. Incentive Stock Options may be granted only to
employees of the Company or a parent corporation or subsidiary corporation thereof (as such
terms are defined in Sections 424(e) and (f) of the Code). Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants.
(b) Ten Percent Shareholders
. A Ten Percent Shareholder shall not be granted an Incentive
Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value of the Common Stock on the date of grant and the Option is not exercisable
after the expiration of five (5) years from the date of grant.
(c) Consultants.
A Consultant shall not be eligible for the grant of a Stock Award if, at the
time of grant, either the offer or the sale of the Companys securities to such Consultant is not
exempt under Rule 701 of the Securities Act (
Rule 701
) because of the nature of the services that
the Consultant is providing to the Company, because the Consultant is not a natural person, or
because of any other provision of Rule 701, unless the Company determines that such grant need not
comply with the requirements of Rule 701 and will satisfy another exemption under the Securities
Act as well as comply with the securities laws of all other relevant jurisdictions.
6.
Option Provisions.
Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates shall be issued for shares of Common Stock purchased on exercise of
each type of Option. If an Option is not specifically designated as an Incentive Stock Option,
then the Option shall be a Nonstatutory Stock Option. The provisions of separate Options need not
be identical;
provided, however
, that each Option Agreement shall include (through incorporation of
provisions hereof by reference in the Option Agreement or otherwise) the substance of each of the
following provisions:
(a) Term.
Subject to the provisions of Section 5(b) regarding Ten Percent Shareholders, no
Option shall be exercisable after the expiration of ten (10) years from the date of its grant or
such shorter period specified in the Option Agreement.
(b) Exercise Price.
Subject to the provisions of Section 5(b) regarding Incentive Stock
Options granted to Ten Percent Shareholders, the exercise price of each Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option
on the date the Option is granted. Notwithstanding the foregoing, an Option may be granted with an
exercise price lower than one hundred percent (100%) of the Fair Market Value of the Common Stock
subject to the Option if such Option is granted pursuant to an assumption or substitution for
another option in a manner consistent with the provisions of Section 424(a) of the Code (whether or
not such options are Incentive Stock Options).
10.
(c) Consideration.
The purchase price of Common Stock acquired pursuant to the exercise of an
Option shall be paid, to the extent permitted by applicable law and as determined by the Board in
its sole discretion, by any combination of the methods of payment set forth below. The Board shall
have the authority to grant Options that do not permit all of the following methods of payment (or
otherwise restrict the ability to use certain methods) and to grant Options that require the
consent of the Company to utilize a particular method of payment. The permitted methods of payment
are as follows:
(i)
by cash, check, bank draft or money order payable to the Company;
(ii)
pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of the stock subject to the Option, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;
(iii)
by delivery to the Company (either by actual delivery or attestation) of shares of
Common Stock;
(iv)
by a net exercise arrangement pursuant to which the Company will reduce the number of
shares of Common Stock issued upon exercise by the largest whole number of shares with a Fair
Market Value that does not exceed the aggregate exercise price;
provided, however
, that the Company
shall accept a cash or other payment from the Participant to the extent of any remaining balance of
the aggregate exercise price not satisfied by such reduction in the number of whole shares to be
issued;
provided, further
, that shares of Common Stock will no longer be outstanding under an
Option and will not be exercisable thereafter to the extent that (A) shares are used to pay the
exercise price pursuant to the net exercise, (B) shares are delivered to the Participant as a
result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations;
(v)
according to a deferred payment or similar arrangement with the Optionholder;
provided,
however
, that interest shall compound at least annually and shall be charged at the minimum rate of
interest necessary to avoid (A) the imputation of interest income to the Company and compensation
income to the Optionholder under any applicable provisions of the Code, and (B) the classification
of the Option as a liability for financial accounting purposes; or
(vi)
in any other form of legal consideration that may be acceptable to the Board.
(d) Transferability of Options.
The Board may, in its sole discretion, impose such
limitations on the transferability of Options as the Board shall determine. In the absence of such
a determination by the Board to the contrary, the following restrictions on the transferability of
Options shall apply:
(i) Restrictions on Transfer.
An Option shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during the lifetime of the
11.
Optionholder only by the Optionholder;
provided, however
, that the Board may, in its sole
discretion, permit transfer of the Option to such extent as permitted by Rule 701 of the Securities
Act at the time of the grant of the Option and in a manner consistent with applicable tax and
securities laws upon the Optionholders request.
(ii) Domestic Relations Orders.
Notwithstanding the foregoing, an Option may be transferred
pursuant to a domestic relations order,
provided, however,
that an Incentive Stock Option may be
deemed to be a Nonstatutory Stock Option as a result of such transfer.
(iii) Beneficiary Designation.
Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form provided by or otherwise satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be the beneficiary of an Option with the right to exercise the Option and receive the
Common Stock or other consideration resulting from the Option exercise.
(e) Vesting of Options Generally.
The total number of shares of Common Stock subject to an
Option may vest and therefore become exercisable in periodic installments that may or may not be
equal. The Option may be subject to such other terms and conditions on the time or times when it
may or may not be exercised (which may be based on the satisfaction of performance goals or other
criteria) as the Board may deem appropriate. The vesting provisions of individual Options may
vary. The provisions of this Section 6(e) are subject to any Option provisions governing the
minimum number of shares of Common Stock as to which an Option may be exercised.
(f) Termination of Continuous Service.
Except as otherwise provided in the applicable Option
Agreement or other agreement between the Optionholder and the Company, in the event that an
Optionholders Continuous Service terminates (other than upon the Optionholders death or
Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination of Continuous Service) but only
within such period of time ending on the earlier of (i) the date three (3) months following the
termination of the Optionholders Continuous Service (or such longer or shorter period specified in
the Option Agreement, which period shall not be less than thirty (30) days), or (ii) the expiration
of the term of the Option as set forth in the Option Agreement. If, after termination of
Continuous Service, the Optionholder does not exercise his or her Option within the time specified
herein or in the Option Agreement (as applicable), the Option shall terminate.
(g) Extension of Termination Date.
Except as otherwise provided in the applicable Option
Agreement or other agreement between the Optionholder and the Company, if the exercise of the
Option following the termination of the Optionholders Continuous Service (other than upon the
Optionholders death or Disability) would be prohibited at any time solely because the issuance of
shares of Common Stock would violate the registration requirements under the Securities Act, then
the Option shall terminate on the earlier of (i) the expiration of a period of three (3) months
after the termination of the Optionholders Continuous Service during which the exercise of the
Option would not be in violation of such registration requirements, or (ii) the expiration of the
term of the Option as set forth in the Option Agreement.
12.
(h) Disability of Optionholder.
Except as otherwise provided in the applicable Option
Agreement or other agreement between the Optionholder and the Company, in the event that an
Optionholders Continuous Service terminates as a result of the Optionholders Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination of Continuous Service), but only within such
period of time ending on the earlier of (i) the date twelve (12) months following such termination
of Continuous Service (or such longer or shorter period specified in the Option Agreement, which
period shall not be less than six (6) months), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder
does not exercise his or her Option within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.
(i) Death of Optionholder.
Except as otherwise provided in the applicable Option Agreement or
other agreement between the Optionholder and the Company, in the event that (i) an Optionholders
Continuous Service terminates as a result of the Optionholders death, or (ii) the Optionholder
dies within the period (if any) specified in the Option Agreement after the termination of the
Optionholders Continuous Service for a reason other than death, then the Option may be exercised
(to the extent the Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholders estate, by a person who acquired the right to exercise the Option by bequest or
inheritance or by a person designated as the beneficiary of the Option upon the Optionholders
death, but only within the period ending on the earlier of (i) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the Option Agreement,
which period shall not be less than six (6) months), or (ii) the expiration of the term of such
Option as set forth in the Option Agreement. If, after the Optionholders death, the Option is not
exercised within the time specified herein or in the Option Agreement (as applicable), the Option
shall terminate. If the Optionholder designates a third party beneficiary of the Option in
accordance with Section 6(d)(iii), then upon the death of the Optionholder such designated
beneficiary shall have the sole right to exercise the Option and receive the Common Stock or other
consideration resulting from the Option exercise.
(j) Non-Exempt Employees
. No Option granted to an Employee that is a non-exempt employee for
purposes of the Fair Labor Standards Act of 1938, as amended, shall be first exercisable for any
shares of Common Stock until at least six months following the date of grant of the Option. The
foregoing provision is intended to operate so that any income derived by a non-exempt employee in
connection with the exercise or vesting of an Option will be exempt from his or her regular rate of
pay.
(k) Early Exercise.
The Option may, but need not, include a provision whereby the
Optionholder may elect at any time before the Optionholders Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior
to the full vesting of the Option. Subject to the Repurchase Limitation in Section 9(k), any
unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the
Company or to any other restriction the Board determines to be appropriate. Provided that the
Repurchase Limitation in Section 9(k) is not violated, the Company shall not be required to
exercise its repurchase option until at least six (6) months (or such longer or
13.
shorter period of time required to avoid classification of the Option as a liability for
financial accounting purposes) have elapsed following exercise of the Option unless the Board
otherwise specifically provides in the Option Agreement.
(l) Right of Repurchase
. Subject to the Repurchase Limitation in Section 9(k), the Option
may include a provision whereby the Company may elect to repurchase all or any part of the vested
shares of Common Stock acquired by the Optionholder pursuant to the exercise of the Option.
(m) Right of First Refusal
. The Option may include a provision whereby the Company may elect
to exercise a right of first refusal following receipt of notice from the Optionholder of the
intent to transfer all or any part of the shares of Common Stock received upon the exercise of the
Option. Such right of first refusal shall be subject to the Repurchase Limitation in Section
9(k). Except as expressly provided in this Section 6(m) or in the Option Agreement, such right of
first refusal shall otherwise comply with any applicable provisions of the Bylaws of the Company.
7.
Provisions of Stock Awards other than Options.
(a) Restricted Stock Awards.
Each Restricted Stock Award Agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. To the extent
consistent with the Companys Bylaws, at the Boards election, shares of Common Stock may be (1)
held in book entry form subject to the Companys instructions until any restrictions relating to
the Restricted Stock Award lapse; or (2) evidenced by a certificate, which certificate shall be
held in such form and manner as determined by the Board. The terms and conditions of Restricted
Stock Award Agreements may change from time to time, and the terms and conditions of separate
Restricted Stock Award Agreements need not be identical;
provided, however
, that each Restricted
Stock Award Agreement shall include (through incorporation of the provisions hereof by reference in
the agreement or otherwise) the substance of each of the following provisions:
(i) Consideration
. A Restricted Stock Award may be awarded in consideration for (A) past
services actually rendered to the Company or an Affiliate, or (B) any other form of legal
consideration that may be acceptable to the Board in its sole discretion and permissible under
applicable law.
(ii) Vesting
. Subject to the Repurchase Limitation in Section 9(k), shares of Common Stock
awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in
accordance with a vesting schedule to be determined by the Board.
(iii) Termination of Participants Continuous Service
. In the event a Participants
Continuous Service terminates, the Company may receive via a forfeiture condition, any or all of
the shares of Common Stock held by the Participant which have not vested as of the date of
termination of Continuous Service under the terms of the Restricted Stock Award Agreement.
14.
(iv) Transferability
. Rights to acquire shares of Common Stock under the Restricted Stock
Award Agreement shall be transferable by the Participant only upon such terms and conditions as are
set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole
discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains
subject to the terms of the Restricted Stock Award Agreement.
(b) Restricted Stock Unit Awards.
Each Restricted Stock Unit Award Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem appropriate. The terms
and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical,
provided, however,
that each Restricted Stock Unit Award Agreement shall include (through
incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of
each of the following provisions:
(i) Consideration.
At the time of grant of a Restricted Stock Unit Award, the Board will
determine the consideration, if any, to be paid by the Participant upon delivery of each share of
Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by
the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid
in any form of legal consideration that may be acceptable to the Board in its sole discretion and
permissible under applicable law.
(ii) Vesting.
At the time of the grant of a Restricted Stock Unit Award, the Board may impose
such restrictions or conditions to the vesting of the Restricted Stock Unit Award as it, in its
sole discretion, deems appropriate.
(iii) Payment
. A Restricted Stock Unit Award may be settled by the delivery of shares of
Common Stock, their cash equivalent, any combination thereof or in any other form of consideration,
as determined by the Board and contained in the Restricted Stock Unit Award Agreement.
(iv) Additional Restrictions.
At the time of the grant of a Restricted Stock Unit Award, the
Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery
of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award
to a time after the vesting of such Restricted Stock Unit Award.
(v) Dividend Equivalents.
Dividend equivalents may be credited in respect of shares of Common
Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend
equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock
Unit Award in such manner as determined by the Board. Any additional shares covered by the
Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all
the terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they
relate.
(vi) Termination of Participants Continuous Service.
Except as otherwise provided in the
applicable Restricted Stock Unit Award Agreement, such portion of the
15.
Restricted Stock Unit Award that has not vested will be forfeited upon the Participants
termination of Continuous Service.
(vii) Compliance with Section 409A of the Code.
Notwithstanding anything to the contrary set
forth herein, any Restricted Stock Unit Award granted under the Plan that is not exempt from the
requirements of Section 409A of the Code shall contain such provisions so that such Restricted
Stock Unit Award will comply with the requirements of Section 409A of the Code. Such restrictions,
if any, shall be determined by the Board and contained in the Restricted Stock Unit Award Agreement
evidencing such Restricted Stock Unit Award. For example, such restrictions may include, without
limitation, a requirement that any Common Stock that is to be issued in a year following the year
in which the Restricted Stock Unit Award vests must be issued in accordance with a fixed
pre-determined schedule.
8.
Covenants of the Company.
(a) Availability of Shares.
During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock reasonably required to satisfy such
Stock Awards.
(b) Securities Law Compliance.
The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however,
that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained.
(c) No Obligation to Notify.
The Company shall have no duty or obligation to any holder of a
Stock Award to advise such holder as to the time or manner of exercising such Stock Award.
Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder
of a pending termination or expiration of a Stock Award or a possible period in which the Stock
Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences
of a Stock Award to the holder of such Stock Award.
9.
Miscellaneous.
(a) Use of Proceeds from Sales of Common Stock.
Proceeds from the sale of shares of Common
Stock pursuant to Stock Awards shall constitute general funds of the Company.
(b) Corporate Action Constituting Grant of Stock Awards.
Corporate action constituting a
grant by the Company of a Stock Award to any Participant shall be deemed completed as of the date
of such corporate action, unless otherwise determined by the Board,
16.
regardless of when the instrument, certificate, or letter evidencing the Stock Award is
communicated to, or actually received or accepted by, the Participant.
(c) Shareholder Rights.
No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms and the Participant shall not be deemed to be a shareholder of record until
the issuance of the Common Stock pursuant to such exercise has been entered into the books and
records of the Company.
(d) No Employment or Other Service Rights.
Nothing in the Plan, any Stock Award Agreement or
any other instrument executed thereunder or in connection with any Stock Award granted pursuant
thereto shall confer upon any Participant any right to continue to serve the Company or an
Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the
right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without
notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such
Consultants agreement with the Company or an Affiliate, or (iii) the service of a Director
pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is incorporated, as the case may
be.
(e) Incentive Stock Option $100,000 Limitation.
To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof that exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of
the applicable Option Agreement(s).
(f) Investment Assurances.
The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participants knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Stock Award for the Participants own
account and not with any present intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (1) the issuance of the shares upon the exercise or acquisition of Common Stock
under the Stock Award has been registered under a then currently effective registration statement
under the Securities Act, or (2) as to any particular requirement, a determination is made by
counsel for the Company that such requirement need not be met in the circumstances under the then
applicable securities laws. The Company may, upon advice of counsel to the Company, place legends
on stock certificates issued under the Plan as such
17.
counsel deems necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common Stock.
(g) Withholding Obligations.
To the extent provided by the terms of a Stock Award Agreement,
the Company may, in its sole discretion, satisfy any federal, state or local tax withholding
obligation relating to a Stock Award by any of the following means (in addition to the Companys
right to withhold from any compensation paid to the Participant by the Company) or by a combination
of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of
Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in
connection with the Stock Award;
provided, however
, that no shares of Common Stock are withheld
with a value exceeding the minimum amount of tax required to be withheld by law (or such lower
amount as may be necessary to avoid classification of the Stock Award as a liability for financial
accounting purposes); (iii) withholding payment from any amounts otherwise payable to the
Participant; (iv) withholding cash from a Stock Award settled in cash; or (v) by such other method
as may be set forth in the Stock Award Agreement.
(h) Electronic Delivery
. Any reference herein to a written agreement or document shall
include any agreement or document delivered electronically or posted on the Companys intranet.
(i) Deferrals.
To the extent permitted by applicable law, the Board, in its sole discretion,
may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting
or settlement of all or a portion of any Stock Award may be deferred and may establish programs and
procedures for deferral elections to be made by Participants. Deferrals by Participants will be
made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an employee. The Board is
authorized to make deferrals of Stock Awards and determine when, and in what annual percentages,
Participants may receive payments, including lump sum payments, following the Participants
termination of employment or retirement, and implement such other terms and conditions consistent
with the provisions of the Plan and in accordance with applicable law.
(j) Compliance with Section 409A.
To the extent that the Board determines that any Stock
Award granted hereunder is subject to Section 409A of the Code, the Stock Award Agreement
evidencing such Stock Award shall incorporate the terms and conditions necessary to avoid the
consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and
Stock Award Agreements shall be interpreted in accordance with Section 409A of the Code and
Department of Treasury regulations and other interpretive guidance issued thereunder, including
without limitation any such regulations or other guidance that may be issued or amended after the
Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that
following the Effective Date the Board determines that any Stock Award may be subject to Section
409A of the Code and related Department of Treasury guidance (including such Department of Treasury
guidance as may be issued after the Effective Date), the Board may adopt such amendments to the
Plan and the applicable Stock Award Agreement or adopt other policies and procedures (including
amendments, policies and
18.
procedures with retroactive effect), or take any other actions, that the Board determines are
necessary or appropriate to (1) exempt the Stock Award from Section 409A of the Code and/or
preserve the intended tax treatment of the benefits provided with respect to the Stock Award, or
(2) comply with the requirements of Section 409A of the Code and related Department of Treasury
guidance.
(k) Repurchase Limitation
. The terms of any repurchase option shall be specified in the Stock
Award Agreement. The repurchase price for vested shares of Common Stock shall be the Fair Market
Value of the shares of Common Stock on the date of repurchase. The repurchase price for unvested
shares of Common Stock shall be the lower of (i) the Fair Market Value of the shares of Common
Stock on the date of repurchase or (ii) their original purchase price. However, the Company shall
not exercise its repurchase option until at least six (6) months (or such longer or shorter period
of time necessary to avoid classification of the Stock Award as a liability for financial
accounting purposes) have elapsed following delivery of shares of Common Stock subject to the Stock
Award, unless otherwise specifically provided by the Board.
(l) Compliance with Exemption Provided by Rule 12h-1(f)
. If: (i) the aggregate of the number
of Optionholders and the number of holders of all other outstanding compensatory employee stock
options to purchase shares of Common Stock equals or exceeds five hundred (500), and (ii) the
assets of the Company at the end of the Companys most recently completed fiscal year exceeds $10
million, then the following restrictions shall apply during any period during which the Company
does not have a class of its securities registered under Section 12 of the Exchange Act and is not
required to file reports under Section 15(d) of the Exchange Act: (A) the Options and, prior to
exercise, the shares of Common Stock acquired upon exercise of the Options may not be transferred
until the Company is no longer relying on the exemption provided by Rule 12h-1(f) promulgated under
the Exchange Act (
Rule 12h-1(f)
), except: (1) as permitted by Rule 701(c) promulgated under the
Securities Act, (2) to a guardian upon the disability of the Optionholder, or (3) to an executor
upon the death of the Optionholder (collectively, the
Permitted Transferees
);
provided, however
,
the following transfers are permitted: (i) transfers by the Optionholder to the Company, and (ii)
transfers in connection with a change of control or other acquisition involving the Company, if
following such transaction, the Options no longer remain outstanding and the Company is no longer
relying on the exemption provided by Rule 12h-1(f);
provided further
, that any Permitted
Transferees may not further transfer the Options; (B) except as otherwise provided in (A) above,
the Options and shares of Common Stock acquired upon exercise of the Options are restricted as to
any pledge, hypothecation, or other transfer, including any short position, any put equivalent
position as defined by Rule 16a-1(h) promulgated under the Exchange Act, or any call equivalent
position as defined by Rule 16a-1(b) promulgated under the Exchange Act by the Optionholder prior
to exercise of an Option until the Company is no longer relying on the exemption provided by Rule
12h-1(f); and (C) at any time that the Company is relying on the exemption provided by Rule
12h-1(f), the Company shall deliver to Optionholders (whether by physical or electronic delivery or
written notice of the availability of the information on an internet site) the information required
by Rule 701(e)(3), (4), and (5) promulgated under the Securities Act every six (6) months,
including financial statements that are not more than one hundred eighty (180) days old;
19.
provided, however
, that the Company may condition the delivery of such information upon the
Optionholders agreement to maintain its confidentiality.
10.
Adjustments upon Changes in Common Stock; Other Corporate Events.
(a) Capitalization Adjustments
. In the event of a Capitalization Adjustment, the Board shall
proportionately and appropriately adjust: (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 4(a), (ii) the class(es) and maximum number of securities
that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 4(c),
and (iii) the class(es) and number of securities and price per share of stock subject to
outstanding Stock Awards. The Board shall make such adjustments, and its determination shall be
final, binding and conclusive.
(b) Dissolution or Liquidation
. Except as otherwise provided in the Stock Award Agreement, in
the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than
Stock Awards consisting of vested and outstanding shares of Common Stock not subject to the
Companys right of repurchase) shall terminate immediately prior to the completion of such
dissolution or liquidation, and the shares of Common Stock subject to the Companys repurchase
option may be repurchased by the Company notwithstanding the fact that the holder of such Stock
Award is providing Continuous Service,
provided, however,
that the Board may, in its sole
discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer
subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or
terminated) before the dissolution or liquidation is completed but contingent on its completion.
(c) Corporate Transaction.
The following provisions shall apply to Stock Awards in the event
of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award
or any other written agreement between the Company or any Affiliate and the holder of the Stock
Award or unless otherwise expressly provided by the Board at the time of grant of a Stock Award.
(i) Stock Awards May Be Assumed.
Except as otherwise stated in the Stock Award Agreement, in
the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the
surviving or acquiring corporations parent company) may assume or continue any or all Stock Awards
outstanding under the Plan or may substitute similar stock awards for Stock Awards outstanding
under the Plan (including but not limited to, awards to acquire the same consideration paid to the
shareholders of the Company pursuant to the Corporate Transaction), and any reacquisition or
repurchase rights held by the Company in respect of Common Stock issued pursuant to Stock Awards
may be assigned by the Company to the successor of the Company (or the successors parent company,
if any), in connection with such Corporate Transaction. A surviving corporation or acquiring
corporation (or its parent) may choose to assume or continue only a portion of a Stock Award or
substitute a similar stock award for only a portion of a Stock Award. The terms of any assumption,
continuation or substitution shall be set by the Board in accordance with the provisions of Section
3.
20.
(ii) Stock Awards Held by Current Participants.
Except as otherwise stated in the Stock Award
Agreement, in the event of a Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding Stock Awards or
substitute similar stock awards for such outstanding Stock Awards, then with respect to Stock
Awards that have not been assumed, continued or substituted and that are held by Participants whose
Continuous Service has not terminated prior to the effective time of the Corporate Transaction
(referred to as the
Current Participants
), the vesting of such Stock Awards (and, if applicable,
the time at which such Stock Awards may be exercised) shall (contingent upon the effectiveness of
the Corporate Transaction) be accelerated in full to a date prior to the effective time of such
Corporate Transaction as the Board shall determine (or, if the Board shall not determine such a
date, to the date that is five (5) days prior to the effective time of the Corporate Transaction),
and such Stock Awards shall terminate if not exercised (if applicable) at or prior to the effective
time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company
with respect to such Stock Awards shall lapse (contingent upon the effectiveness of the Corporate
Transaction).
(iii) Stock Awards Held by Persons other than Current Participants.
Except as otherwise
stated in the Stock Award Agreement, in the event of a Corporate Transaction in which the surviving
corporation or acquiring corporation (or its parent company) does not assume or continue such
outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards, then
with respect to Stock Awards that have not been assumed, continued or substituted and that are held
by persons other than Current Participants, the vesting of such Stock Awards (and, if applicable,
the time at which such Stock Award may be exercised) shall not be accelerated and such Stock Awards
(other than a Stock Award consisting of vested and outstanding shares of Common Stock not subject
to the Companys right of repurchase) shall terminate if not exercised (if applicable) prior to the
effective time of the Corporate Transaction;
provided, however,
that any reacquisition or
repurchase rights held by the Company with respect to such Stock Awards shall not terminate and may
continue to be exercised notwithstanding the Corporate Transaction.
(iv) Payment for Stock Awards in Lieu of Exercise.
Notwithstanding the foregoing, in the
event a Stock Award will terminate if not exercised prior to the effective time of a Corporate
Transaction, the Board may provide, in its sole discretion, that the holder of such Stock Award may
not exercise such Stock Award but will receive a payment, in such form as may be determined by the
Board, equal in value to the excess, if any, of (A) the value of the property the holder of the
Stock Award would have received upon the exercise of the Stock Award, over (B) any exercise price
payable by such holder in connection with such exercise.
(d) Change in Control.
A Stock Award may be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement
for such Stock Award or as may be provided in any other written agreement between the Company or
any Affiliate and the Participant, but in the absence of such provision, no such acceleration shall
occur.
21.
11.
Termination or Suspension of the Plan.
(a) Plan Term.
The Board may suspend or terminate the Plan at any time. Unless sooner
terminated by the Board pursuant to Section 3, the Plan shall automatically terminate on the day
before the tenth (10th) anniversary of the earlier of (i) the date the Plan is adopted by the
Board, or (ii) the date the Plan is approved by the shareholders of the Company. No Stock Awards
may be granted under the Plan while the Plan is suspended or after it is terminated.
(b) No Impairment of Rights.
Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the affected Participant.
12.
Effective Date of Plan.
The Plan shall become effective on the Effective Date.
13.
Choice of Law.
The law of the State of California shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to that states conflict of laws rules.
22.
Exhibit
99.6
QuinStreet, Inc.
Stock Option Grant Notice
2008 Equity Incentive Plan
QuinStreet, Inc. (the
Company
), pursuant to its 2008 Equity Incentive Plan (the
Plan
), hereby
grants to Optionholder an option to purchase the number of shares of the Companys Common Stock set
forth below. This option is subject to all of the terms and conditions as set forth herein and in
the Stock Option Agreement, the Plan, and the Notice of Exercise, all of which are attached hereto
and incorporated herein in their entirety.
Optionholder:
Date of Grant:
Vesting Commencement Date:
Number of Shares Subject to Option:
Exercise Price (Per Share):
Total Exercise Price:
Expiration Date:
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Type of Grant:
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o
Incentive Stock Option
1
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o
Nonstatutory Stock Option
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Exercise Schedule
:
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o
Same as Vesting Schedule
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o
Early Exercise Permitted
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Vesting Schedule
:
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1/4
th
of the shares vest one year after the Vesting Commencement Date.
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1/36
th
of the remaining shares vest monthly thereafter over the next three years.
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Payment:
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By one or a combination of the following items (described in the Stock Option Agreement):
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o
By cash or check
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o
Pursuant to a Regulation T Program if the Shares are publicly traded
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o
By delivery of already-owned shares if the Shares are publicly traded
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Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option
Agreement, and the Plan set forth the entire understanding between Optionholder and the Company
regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder under the Plan, and (ii) the following agreements only:
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Other Agreements:
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Stock Option Agreement, 2008 Equity Incentive Plan and Notice of Exercise
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1
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If this is an Incentive Stock Option, it (plus other
outstanding Incentive Stock Options) cannot be first
exercisable
for more than
$100,000 in value (measured by exercise price) in any calendar year. Any
excess over $100,000 is a Nonstatutory Stock Option.
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Attachment I
STOCK OPTION AGREEMENT
QuinStreet, Inc.
2008 Equity Incentive Plan
Stock Option Agreement
(Incentive or Nonstatutory Stock Option)
Pursuant to your Stock Option Grant Notice (
Grant Notice
) and this Stock Option Agreement,
QuinStreet, Inc.
(the
Company
) has granted you an option under its 2008 Equity Incentive
Plan (the
Plan
) to purchase the number of shares of the Companys Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as
in the Plan.
The details of your option are as follows:
1.
Vesting.
Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2.
Number of Shares and Exercise Price.
The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.
3.
Exercise Restriction for Non-Exempt Employees.
In the event that you are an
Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended
(
i.e.
, a
Non-Exempt Employee
), you may not exercise your option until you have completed at least
six (6) months of Continuous Service measured from the Date of Grant specified in your Grant
Notice, notwithstanding any other provision of your option.
4.
Exercise prior to Vesting (Early Exercise).
If permitted in your Grant Notice
(
i.e.
, the Exercise Schedule indicates Early Exercise Permitted) and subject to the provisions
of your option, you may elect at any time that is both (i) during the period of your Continuous
Service and (ii) during the term of your option, to exercise all or part of your option, including
the nonvested portion of your option;
provided, however,
that:
(a)
a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;
(b)
any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Companys form of Early Exercise Stock Purchase Agreement;
(c)
you shall enter into the Companys form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred; and
(d)
if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair
Market Value (determined at the time of grant) of the shares of Common Stock with respect to which
your option plus all other Incentive Stock Options you hold are exercisable for the first time by
you during any calendar year (under all plans of the Company and its Affiliates) exceeds one
hundred thousand dollars ($100,000), your option(s) or portions thereof that exceed such limit
(according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.
5.
Method of Payment.
Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner
permitted by your Grant Notice,
which may include one or more of the
following:
(a)
Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in
The Wall Street Journal
, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in
The Wall Street Journal
, by delivery to the Company (either by actual delivery or
attestation) of already-owned shares of Common Stock that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of
exercise. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
(c)
Pursuant to the following deferred payment alternative:
(i)
Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued
interest, shall be due not later than four (4) years from date of exercise or, at the Companys
election, upon termination of your Continuous Service.
(ii)
Interest shall be compounded at least annually and shall be charged at the minimum rate
of interest necessary to avoid the treatment as interest, under any applicable provisions of the
Code, of any portion of any amounts other than amounts stated to be interest under the deferred
payment arrangement.
(iii)
At any time that the Company is incorporated in Delaware, payment of the Common Stocks
par value, as defined in the Delaware General Corporation Law, shall be made in cash and not by
deferred payment.
(iv)
In order to elect the deferred payment alternative, you must, as a part of your written
notice of exercise, give notice of the election of this payment alternative and, in order to secure
the payment of the deferred exercise price to the Company hereunder, if the Company so requests,
you must tender to the Company a promissory note and a security agreement covering the purchased
shares of Common Stock, both in form and substance
satisfactory to the Company, or such other or additional documentation as the Company may
request.
6.
Whole Shares.
You may exercise your option only for whole shares of Common Stock.
7.
Securities Law Compliance.
Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
8.
Term.
You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires upon
the earliest of the following:
(a)
three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three (3) month period your
option is not exercisable solely because of the condition set forth in the section above relating
to Securities Law Compliance, your option shall not expire until the earlier of the Expiration
Date or until it shall have been exercisable for an aggregate period of three (3) months after the
termination of your Continuous Service;
(b)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c)
eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;
(d)
the Expiration Date indicated in your Grant Notice; or
(e)
the day before the seventh (7th) anniversary of the Date of Grant.
If your option is an Incentive Stock Option, note that to obtain the federal income tax
advantages associated with an Incentive Stock Option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
options exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or Disability. The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee that your option will necessarily
be treated as an Incentive Stock Option if you continue to provide services to the Company or an
Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise
your option more than three (3) months after the date your employment with the Company or an
Affiliate terminates.
9.
Exercise.
(a)
You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.
(c)
If your option is an Incentive Stock Option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
(d)
By exercising your option you agree that you shall not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any shares of Common Stock or other securities
of the Company held by you, for a period of one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act or such longer
period as necessary to permit compliance with NASD Rule 2711 or NYSE Member Rule 472 and similar
rules and regulations (the
Lock-Up Period
);
provided, however
, that nothing contained in this
section shall prevent the exercise of a repurchase option, if any, in favor of the Company during
the Lock-Up Period. You further agree to execute and deliver such other agreements as may be
reasonably requested by the Company and/or the underwriter(s) that are consistent with the
foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to your shares of Common
Stock until the end of such period. The underwriters of the Companys stock are intended third
party beneficiaries of this Section 9(d) and shall have the right, power and authority to enforce
the provisions hereof as though they were a party hereto.
10.
Transferability.
Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option. In addition, if permitted by the Company you may transfer your option to a
trust if you are considered to be the sole beneficial owner (determined under Section 671 of the
Code and applicable state law) while the option is held in the trust, provided that you and the
trustee enter into a transfer and other agreements required by the Company.
11.
Right of First Refusal.
Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Companys bylaws
in effect at such time the Company elects to exercise its right;
provided, however,
that if your
option is an Incentive Stock Option and the right of first refusal described in the Companys
bylaws in effect at the time the Company elects to exercise its right is more beneficial to you
than the right of first refusal described in the Companys bylaws on the Date of Grant, then the
right of first refusal described in the Companys bylaws on the Date of Grant shall apply. The
Companys right of first refusal shall expire on the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on a national securities
exchange or quotation system.
12.
Right of Repurchase.
To the extent provided in the Companys bylaws in effect at
such time the Company elects to exercise its right, the Company shall have the right to repurchase
all or any part of the shares of Common Stock you acquire pursuant to the exercise of your option.
13.
Option not a Service Contract.
Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
14.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with the exercise of your option.
(b)
Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable legal conditions or restrictions, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid classification of your option as a liability for
financial accounting purposes). If the date of determination of any tax withholding obligation is
deferred to a date later than the date of exercise of your option, share withholding pursuant to
the preceding sentence shall not be permitted unless you make a proper and timely election under
Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred, to accelerate the
determination of such tax withholding obligation to the date of exercise of your option.
Notwithstanding the filing
of such election, shares of Common Stock shall be withheld solely from fully vested shares of
Common Stock determined as of the date of exercise of your option that are otherwise issuable to
you upon such exercise. Any adverse consequences to you arising in connection with such share
withholding procedure shall be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein unless such obligations are satisfied.
15.
Tax Consequences
. You hereby agree that the Company does not have a duty to
design or administer the Plan or its other compensation programs in a manner that minimizes your
tax liabilities. You shall not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your
other compensation. In particular, you acknowledge that this option is exempt from Section 409A of
the Code only if the exercise price per share specified in the Grant Notice is at least equal to
the fair market value per share of the Common Stock on the Date of Grant and there is no other
impermissible deferral of compensation associated with the option. Because the Common Stock is not
traded on an established securities market, the Fair Market Value is determined by the Board,
perhaps in consultation with an independent valuation firm retained by the Company. You acknowledge
that there is no guarantee that the Internal Revenue Service will agree with the valuation as
determined by the Board, and you shall not make any claim against the Company, or any of its
Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts
that the valuation determined by the Board is less than the fair market value as subsequently
determined by the Internal Revenue Service.
16.
Notices.
Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
17.
Governing Plan Document.
Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
Attachment II
2008 EQUITY INCENTIVE PLAN
Attachment III
NOTICE OF EXERCISE
Notice of Exercise
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QuinStreet, Inc.
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1051 East Hillsdale Blvd.
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Foster City, CA 94404
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Date of Exercise:
_________________
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Type of option (check one):
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Incentive
o
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Nonstatutory
o
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Certificates to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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$
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Value of ________ shares of
QuinStreet, Inc. common
stock delivered herewith
2
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$
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 2008 Equity Incentive Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the shares of Common
Stock issued upon exercise of this option that occurs within two (2) years after the date of grant
of this option or within one (1) year after such shares of Common Stock are issued upon exercise of
this option.
I hereby make the following certifications and representations with respect to the number of
shares of Common Stock of the Company listed above (the
Shares
), which are being acquired by me
for my own account upon exercise of the Option as set forth above:
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2
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Shares must meet the public trading requirements set
forth in the option. Shares must be valued in accordance with the terms of the
option being exercised, and must be owned free and clear of any liens, claims,
encumbrances or security interests. Certificates must be endorsed or
accompanied by an executed assignment separate from certificate.
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I acknowledge that the Shares have not been registered under the Securities Act of 1933, as
amended (the
Securities Act
), and are deemed to constitute restricted securities under Rule 701
and Rule 144 promulgated under the Securities Act. I warrant and represent to the Company that I
have no present intention of distributing or selling said Shares, except as permitted under the
Securities Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for at least ninety days
(90) after the stock of the Company becomes publicly traded (
i.e.,
subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the Shares subject to the
provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing
limitations, as well as any legends reflecting restrictions pursuant to the Companys Articles of
Incorporation, Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of the underwriters) in
connection with the first underwritten registration of the offering of any securities of the
Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale of,
grant any option for the purchase of, or enter into any hedging or similar transaction with the
same economic effect as a sale, any shares of Common Stock or other securities of the Company for a
period of one hundred eighty (180) days following the effective date of a registration statement of
the Company filed under the Securities Act or such longer period as necessary to permit compliance
NASD Rule 2711 or NYSE Member Rule 472 and similar rules and regulations (the
Lock-Up Period
). I
further agree to execute and deliver such other agreements as may be reasonably requested by the
Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to
give further effect thereto. In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing restrictions until
the end of such period.
Very truly yours,
___________________________
Exhibit 99.7
QUINSTREET, INC.
STOCK OPTION GRANT NOTICE Senior Management Personnel
2008 EQUITY INCENTIVE PLAN
QuinStreet, Inc. (the
Company
), pursuant to its 2008 Equity Incentive Plan (the
Plan
), hereby
grants to Optionholder an option to purchase the number of shares of the Companys Common Stock set
forth below. This option is subject to all of the terms and conditions as set forth herein and in
the Stock Option Agreement, the Plan, and the Notice of Exercise, all of which are attached hereto
and incorporated herein in their entirety.
Optionholder:
Date of Grant:
Vesting Commencement Date:
Number of Shares Subject to Option:
Exercise Price (Per Share):
Total Exercise Price:
Expiration Date:
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Type of Grant:
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o
Incentive Stock Option
1
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o
Nonstatutory Stock Option
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Exercise Schedule
:
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o
Same as Vesting Schedule
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o
Early Exercise Permitted
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Vesting Schedule
:
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1/4
th
of the shares vest one year after the Vesting Commencement Date.
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1/36
th
of the remaining shares vest monthly thereafter over the next three years.
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The vesting schedule may accelerate upon a Change in Control (described in the Stock Option Agreement).
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Payment:
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By one or a combination of the following items (described in the Stock Option Agreement):
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o
By cash or check
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By delivery of already-owned shares if the Shares are publicly traded
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Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option
Agreement, and the Plan set forth the entire understanding between Optionholder and the Company
regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder under the Plan, and (ii) the following agreements only:
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Stock Option Agreement, 2008 Equity Incentive Plan and Notice of Exercise
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1
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If this is an Incentive Stock Option, it (plus other
outstanding Incentive Stock Options) cannot be first
exercisable
for more than
$100,000 in value (measured by exercise price) in any calendar year. Any
excess over $100,000 is a Nonstatutory Stock Option.
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Attachment I
STOCK OPTION AGREEMENT
QUINSTREET, INC.
2008 EQUITY INCENTIVE PLAN
Stock Option Agreement for Senior Management
(Incentive or Nonstatutory Stock Option)
Pursuant to your Stock Option Grant Notice (
Grant Notice
) and this Stock Option Agreement,
QuinStreet, Inc.
(the
Company
) has granted you an option under its 2008 Equity Incentive
Plan (the
Plan
) to purchase the number of shares of the Companys Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as
in the Plan.
The details of your option are as follows:
1.
Vesting.
Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2.
Number of Shares and Exercise Price.
The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.
3.
Exercise Restriction for Non-Exempt Employees.
In the event that you are an
Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended
(
i.e.
, a
Non-Exempt Employee
), you may not exercise your option until you have completed at least
six (6) months of Continuous Service measured from the Date of Grant specified in your Grant
Notice, notwithstanding any other provision of your option.
4.
Exercise prior to Vesting (Early Exercise).
If permitted in your Grant Notice
(
i.e.
, the Exercise Schedule indicates Early Exercise Permitted) and subject to the provisions
of your option, you may elect at any time that is both (i) during the period of your Continuous
Service and (ii) during the term of your option, to exercise all or part of your option, including
the nonvested portion of your option;
provided, however,
that:
(a)
a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;
(b)
any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Companys form of Early Exercise Stock Purchase Agreement;
(c)
you shall enter into the Companys form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred; and
(d)
if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair
Market Value (determined at the time of grant) of the shares of Common Stock with respect to which
your option plus all other Incentive Stock Options you hold are exercisable for the first time by
you during any calendar year (under all plans of the Company and its Affiliates) exceeds one
hundred thousand dollars ($100,000), your option(s) or portions thereof that exceed such limit
(according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.
5.
Method of Payment.
Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner
permitted by your Grant Notice,
which may include one or more of the
following:
(a)
Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in
The Wall Street Journal
, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in
The Wall Street Journal
, by delivery to the Company (either by actual delivery or
attestation) of already-owned shares of Common Stock that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of
exercise. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
(c)
Pursuant to the following deferred payment alternative:
(i)
Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued
interest, shall be due not later than four (4) years from date of exercise or, at the Companys
election, upon termination of your Continuous Service.
(ii)
Interest shall be compounded at least annually and shall be charged at the minimum rate
of interest necessary to avoid the treatment as interest, under any applicable provisions of the
Code, of any portion of any amounts other than amounts stated to be interest under the deferred
payment arrangement.
(iii)
At any time that the Company is incorporated in Delaware, payment of the Common Stocks
par value, as defined in the Delaware General Corporation Law, shall be made in cash and not by
deferred payment.
(iv)
In order to elect the deferred payment alternative, you must, as a part of your written
notice of exercise, give notice of the election of this payment alternative and, in order to secure
the payment of the deferred exercise price to the Company hereunder, if the Company so requests,
you must tender to the Company a promissory note and a security agreement covering the purchased
shares of Common Stock, both in form and substance
satisfactory to the Company, or such other or additional documentation as the Company may
request.
6.
Whole Shares.
You may exercise your option only for whole shares of Common Stock.
7.
Securities Law Compliance.
Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
8.
Term.
You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires upon
the earliest of the following:
(a)
three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three (3) month period your
option is not exercisable solely because of the condition set forth in the section above relating
to Securities Law Compliance, your option shall not expire until the earlier of the Expiration
Date or until it shall have been exercisable for an aggregate period of three (3) months after the
termination of your Continuous Service;
(b)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c)
eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;
(d)
the Expiration Date indicated in your Grant Notice; or
(e)
the day before the seventh (7th) anniversary of the Date of Grant.
If your option is an Incentive Stock Option, note that to obtain the federal income tax
advantages associated with an Incentive Stock Option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
options exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or Disability. The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee that your option will necessarily
be treated as an Incentive Stock Option if you continue to provide services to the Company or an
Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise
your option more than three (3) months after the date your employment with the Company or an
Affiliate terminates.
9.
Exercise.
(a)
You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.
(c)
If your option is an Incentive Stock Option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
(d)
By exercising your option you agree that you shall not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any shares of Common Stock or other securities
of the Company held by you, for a period of one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act or such longer
period as necessary to permit compliance with NASD Rule 2711 or NYSE Member Rule 472 and similar
rules and regulations (the
Lock-Up Period
);
provided, however
, that nothing contained in this
section shall prevent the exercise of a repurchase option, if any, in favor of the Company during
the Lock-Up Period. You further agree to execute and deliver such other agreements as may be
reasonably requested by the Company and/or the underwriter(s) that are consistent with the
foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to your shares of Common
Stock until the end of such period. The underwriters of the Companys stock are intended third
party beneficiaries of this Section 9(d) and shall have the right, power and authority to enforce
the provisions hereof as though they were a party hereto.
10.
Change in Control.
In the event of a Change in Control (as defined in the Plan),
the unvested portion of your option, if any, shall vest in accordance with the vesting schedule
described your Stock Option Grant Notice. If your employment terminates due to an Involuntary
Termination Without Cause or a Resignation for Good Reason (as defined below) within six (6)
months, in either case, following the effective date of a Change in Control, twenty-five percent
(25%) of the portion of your option subject to vesting that is unvested on the effective date of
such termination will vest immediately upon such termination.
(a) Involuntary Termination Without Cause
means your dismissal or discharge by the Company
for a reason other than for Cause. The termination of your
employment as a result of death or disability shall not be deemed to be an Involuntary
Termination Without Cause. Cause means that, in the determination of the Board, you:
(i)
have been convicted (including a guilty plea or no contest) of any felony or any crime
involving dishonesty that is likely to inflict or has inflicted demonstrable and material injury on
the business of the Company;
(ii)
have participated in any fraud against the Company;
(iii)
have intentionally damaged any property of the Company thereby causing demonstrable and
material injury to the business of the Company; or
(iv)
have willfully and habitually neglected your duties to the Company.
(b) Resignation for Good Reason
means that you voluntarily terminate employment after any of
the following are undertaken without your express written consent:
(i)
the assignment to you of any duties or responsibilities that results in a significant
diminution in your employment role in the Company as in effect immediately prior to the effective
date of the Change in Control;
provided, however,
that mere changes in your title or reporting
relationships alone shall not constitute a basis for Resignation for Good Reason;
(ii)
a greater than five percent (5%) aggregate reduction by the Company in your annual base
salary, as in effect on the effective date of the Change in Control or as increased thereafter;
provided, however,
that if there are across-the-board proportionate salary reductions for all
officers, management-level and other salaried employees due to the financial condition of the
Company, a greater than ten percent (10%) aggregate reduction by the Company in your annual base
salary will be required;
(iii)
any failure by the Company to continue in effect any benefit plan or program, including
fringe benefits, incentive plans and plans with respect to the receipt of securities of the
Company, in which you are participating immediately prior to the effective date of the Change in
Control (hereinafter referred to as Benefit Plans), or the taking of any action by the Company
that would adversely affect your participation in or reduce your benefits under the Benefit Plans;
provided, however
, that a basis for Resignation for Good Reason shall not exist under this clause
(c) following a Change in Control if the Company offers a range of benefit plans and programs that,
taken as a whole, is comparable to the Benefit Plans; or
(iv)
a non-temporary relocation of your business office to a location more than fifty (50)
miles from the location at which you perform duties as of the effective date of the Change in
Control, except for required travel by you on the Companys business to an extent substantially
consistent with your business travel obligations prior to the Change in Control.
11.
Transferability.
Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company,
you may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option. In addition, if permitted by the Company you may transfer your option to a
trust if you are considered to be the sole beneficial owner (determined under Section 671 of the
Code and applicable state law) while the option is held in the trust, provided that you and the
trustee enter into a transfer and other agreements required by the Company.
12.
Right of First Refusal.
Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Companys bylaws
in effect at such time the Company elects to exercise its right;
provided, however,
that if your
option is an Incentive Stock Option and the right of first refusal described in the Companys
bylaws in effect at the time the Company elects to exercise its right is more beneficial to you
than the right of first refusal described in the Companys bylaws on the Date of Grant, then the
right of first refusal described in the Companys bylaws on the Date of Grant shall apply. The
Companys right of first refusal shall expire on the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on a national securities
exchange or quotation system.
13.
Right of Repurchase.
To the extent provided in the Companys bylaws in effect at
such time the Company elects to exercise its right, the Company shall have the right to repurchase
all or any part of the shares of Common Stock you acquire pursuant to the exercise of your option.
14.
Option not a Service Contract.
Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
15.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with the exercise of your option.
(b)
Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable legal conditions or restrictions, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid
classification of your option as a liability for financial accounting purposes). If the date
of determination of any tax withholding obligation is deferred to a date later than the date of
exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share withholding procedure shall
be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein unless such obligations are satisfied.
16.
Tax Consequences
. You hereby agree that the Company does not have a duty to
design or administer the Plan or its other compensation programs in a manner that minimizes your
tax liabilities. You shall not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your
other compensation. In particular, you acknowledge that this option is exempt from Section 409A of
the Code only if the exercise price per share specified in the Grant Notice is at least equal to
the fair market value per share of the Common Stock on the Date of Grant and there is no other
impermissible deferral of compensation associated with the option. Because the Common Stock is not
traded on an established securities market, the Fair Market Value is determined by the Board,
perhaps in consultation with an independent valuation firm retained by the Company. You acknowledge
that there is no guarantee that the Internal Revenue Service will agree with the valuation as
determined by the Board, and you shall not make any claim against the Company, or any of its
Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts
that the valuation determined by the Board is less than the fair market value as subsequently
determined by the Internal Revenue Service.
17.
Notices.
Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
18.
Governing Plan Document.
Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
Attachment II
2008 EQUITY INCENTIVE PLAN
Attachment III
NOTICE OF EXERCISE
Notice of Exercise
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QuinStreet, Inc.
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1051 East Hillsdale Blvd.
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Foster City, CA 94404
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Date of Exercise:
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Type of option (check one):
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Incentive
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Nonstatutory
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Certificates to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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$
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Value of
shares of
QuinStreet, Inc. common
stock delivered herewith
2
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$
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 2008 Equity Incentive Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the shares of Common
Stock issued upon exercise of this option that occurs within two (2) years after the date of grant
of this option or within one (1) year after such shares of Common Stock are issued upon exercise of
this option.
I hereby make the following certifications and representations with respect to the number of
shares of Common Stock of the Company listed above (the
Shares
), which are being acquired by me
for my own account upon exercise of the Option as set forth above:
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2
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Shares must meet the public trading requirements set
forth in the option. Shares must be valued in accordance with the terms of the
option being exercised, and must be owned free and clear of any liens, claims,
encumbrances or security interests. Certificates must be endorsed or
accompanied by an executed assignment separate from certificate.
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I acknowledge that the Shares have not been registered under the Securities Act of 1933, as
amended (the
Securities Act
), and are deemed to constitute restricted securities under Rule 701
and Rule 144 promulgated under the Securities Act. I warrant and represent to the Company that I
have no present intention of distributing or selling said Shares, except as permitted under the
Securities Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for at least ninety days
(90) after the stock of the Company becomes publicly traded (
i.e.,
subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the Shares subject to the
provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing
limitations, as well as any legends reflecting restrictions pursuant to the Companys Articles of
Incorporation, Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of the underwriters) in
connection with the first underwritten registration of the offering of any securities of the
Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale of,
grant any option for the purchase of, or enter into any hedging or similar transaction with the
same economic effect as a sale, any shares of Common Stock or other securities of the Company for a
period of one hundred eighty (180) days following the effective date of a registration statement of
the Company filed under the Securities Act or such longer period as necessary to permit compliance
NASD Rule 2711 or NYSE Member Rule 472 and similar rules and regulations (the
Lock-Up Period
). I
further agree to execute and deliver such other agreements as may be reasonably requested by the
Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to
give further effect thereto. In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing restrictions until
the end of such period.
Exhibit 99.8
QUINSTREET, INC.
STOCK OPTION GRANT NOTICE NON-EMPLOYEE DIRECTOR
2008 Equity Incentive Plan
QuinStreet, Inc. (the
Company
), pursuant to its 2008 Equity Incentive Plan (the
Plan
), hereby
grants to Optionholder an option to purchase the number of shares of the Companys Common Stock set
forth below. This option is subject to all of the terms and conditions as set forth herein and in
the Stock Option Agreement, the Plan, and the Notice of Exercise, all of which are attached hereto
and incorporated herein in their entirety.
Optionholder:
Date of Grant:
Vesting Commencement Date:
Number of Shares Subject to Option:
Exercise Price (Per Share):
Total Exercise Price:
Expiration Date:
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Type of Grant:
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o
Incentive Stock Option
1
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o
Nonstatutory Stock Option
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Exercise Schedule
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Same as Vesting Schedule
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Early Exercise Permitted
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Vesting Schedule
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1/4
th
of the shares vest one year after the Vesting Commencement Date.
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1/36
th
of the remaining shares vest monthly thereafter over the next three years.
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The vesting schedule may accelerate upon a Change in Control (described in the Stock Option Agreement).
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Payment:
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By one or a combination of the following items (described in the Stock Option Agreement):
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By cash or check
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Pursuant to a Regulation T Program if the Shares are publicly traded
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By delivery of already-owned shares if the Shares are publicly traded
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Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option
Agreement, and the Plan set forth the entire understanding between Optionholder and the Company
regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder under the Plan, and (ii) the following agreements only:
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Stock Option Agreement, 2008 Equity Incentive Plan and Notice of Exercise
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1
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If this is an Incentive Stock Option, it (plus other
outstanding Incentive Stock Options) cannot be first
exercisable
for more than
$100,000 in value (measured by exercise price) in any calendar year. Any
excess over $100,000 is a Nonstatutory Stock Option.
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Attachment I
STOCK OPTION AGREEMENT
QUINSTREET, INC.
2008 EQUITY INCENTIVE PLAN
Stock Option Agreement for Non-Employee Directors
(Nonstatutory Stock Options)
Pursuant to your Stock Option Grant Notice (
Grant Notice
) and this Stock Option Agreement,
QuinStreet, Inc.
(the
Company
) has granted you an option under its 2008 Equity Incentive
Plan (the
Plan
) to purchase the number of shares of the Companys Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as
in the Plan.
The details of your option are as follows:
1.
Vesting.
Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2.
Number of Shares and Exercise Price.
The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.
3.
Exercise Restriction for Non-Exempt Employees.
In the event that you are an
Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended
(
i.e.
, a
Non-Exempt Employee
), you may not exercise your option until you have completed at least
six (6) months of Continuous Service measured from the Date of Grant specified in your Grant
Notice, notwithstanding any other provision of your option.
4.
Exercise prior to Vesting (Early Exercise).
If permitted in your Grant Notice
(
i.e.
, the Exercise Schedule indicates Early Exercise Permitted) and subject to the provisions
of your option, you may elect at any time that is both (i) during the period of your Continuous
Service and (ii) during the term of your option, to exercise all or part of your option, including
the nonvested portion of your option;
provided, however,
that:
(a)
a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;
(b)
any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Companys form of Early Exercise Stock Purchase Agreement;
(c)
you shall enter into the Companys form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred; and
(d)
if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair
Market Value (determined at the time of grant) of the shares of Common Stock with respect to which
your option plus all other Incentive Stock Options you hold are exercisable for the first time by
you during any calendar year (under all plans of the Company and its Affiliates) exceeds one
hundred thousand dollars ($100,000), your option(s) or portions thereof that exceed such limit
(according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.
5.
Method of Payment.
Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner
permitted by your Grant Notice,
which may include one or more of the
following:
(a)
Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in
The Wall Street Journal
, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in
The Wall Street Journal
, by delivery to the Company (either by actual delivery or
attestation) of already-owned shares of Common Stock that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of
exercise. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
(c)
Pursuant to the following deferred payment alternative:
(i)
Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued
interest, shall be due not later than four (4) years from date of exercise or, at the Companys
election, upon termination of your Continuous Service.
(ii)
Interest shall be compounded at least annually and shall be charged at the minimum rate
of interest necessary to avoid the treatment as interest, under any applicable provisions of the
Code, of any portion of any amounts other than amounts stated to be interest under the deferred
payment arrangement.
(iii)
At any time that the Company is incorporated in Delaware, payment of the Common Stocks
par value, as defined in the Delaware General Corporation Law, shall be made in cash and not by
deferred payment.
(iv)
In order to elect the deferred payment alternative, you must, as a part of your written
notice of exercise, give notice of the election of this payment alternative and, in order to secure
the payment of the deferred exercise price to the Company hereunder, if the Company so requests,
you must tender to the Company a promissory note and a security agreement covering the purchased
shares of Common Stock, both in form and substance
satisfactory to the Company, or such other or additional documentation as the Company may
request.
6.
Whole Shares.
You may exercise your option only for whole shares of Common Stock.
7.
Securities Law Compliance.
Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
8.
Term.
You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires upon
the earliest of the following:
(a)
three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three (3) month period your
option is not exercisable solely because of the condition set forth in the section above relating
to Securities Law Compliance, your option shall not expire until the earlier of the Expiration
Date or until it shall have been exercisable for an aggregate period of three (3) months after the
termination of your Continuous Service;
(b)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c)
eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;
(d)
the Expiration Date indicated in your Grant Notice; or
(e)
the day before the seventh (7th) anniversary of the Date of Grant.
9.
Exercise.
(a)
You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to
which the shares of Common Stock are subject at the time of exercise, or (3) the disposition
of shares of Common Stock acquired upon such exercise.
(c)
By exercising your option you agree that you shall not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any shares of Common Stock or other securities
of the Company held by you, for a period of one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act or such longer
period as necessary to permit compliance with NASD Rule 2711 or NYSE Member Rule 472 and similar
rules and regulations (the
Lock-Up Period
);
provided, however
, that nothing contained in this
section shall prevent the exercise of a repurchase option, if any, in favor of the Company during
the Lock-Up Period. You further agree to execute and deliver such other agreements as may be
reasonably requested by the Company and/or the underwriter(s) that are consistent with the
foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to your shares of Common
Stock until the end of such period. The underwriters of the Companys stock are intended third
party beneficiaries of this Section 9(d) and shall have the right, power and authority to enforce
the provisions hereof as though they were a party hereto.
10.
Change in Control.
In the event of a Change in Control (as defined in the Plan),
the unvested portion of your option, if any, shall vest in accordance with the vesting schedule
described your Stock Option Grant Notice. If your employment terminates due to an Involuntary
Termination Without Cause or a Resignation for Good Reason (as defined below) within six (6)
months, in either case, following the effective date of a Change in Control, twenty-five percent
(25%) of the portion of your option subject to vesting that is unvested on the effective date of
such termination will vest immediately upon such termination.
(a) Involuntary Termination Without Cause
means your dismissal or discharge by the Company
for a reason other than for Cause. The termination of your employment as a result of death or
disability shall not be deemed to be an Involuntary Termination Without Cause. Cause means that,
in the determination of the Board, you:
(i)
have been convicted (including a guilty plea or no contest) of any felony or any crime
involving dishonesty that is likely to inflict or has inflicted demonstrable and material injury on
the business of the Company;
(ii)
have participated in any fraud against the Company;
(iii)
have intentionally damaged any property of the Company thereby causing demonstrable and
material injury to the business of the Company; or
(iv)
have willfully and habitually neglected your duties to the Company.
(b) Resignation for Good Reason
means that you voluntarily terminate employment after any of
the following are undertaken without your express written consent:
(i)
the assignment to you of any duties or responsibilities that results in a significant
diminution in your employment role in the Company as in effect immediately prior to the effective
date of the Change in Control;
provided, however,
that mere changes in your title or reporting
relationships alone shall not constitute a basis for Resignation for Good Reason;
(ii)
a greater than five percent (5%) aggregate reduction by the Company in your annual base
salary, as in effect on the effective date of the Change in Control or as increased thereafter;
provided, however,
that if there are across-the-board proportionate salary reductions for all
officers, management-level and other salaried employees due to the financial condition of the
Company, a greater than ten percent (10%) aggregate reduction by the Company in your annual base
salary will be required;
(iii)
any failure by the Company to continue in effect any benefit plan or program, including
fringe benefits, incentive plans and plans with respect to the receipt of securities of the
Company, in which you are participating immediately prior to the effective date of the Change in
Control (hereinafter referred to as Benefit Plans), or the taking of any action by the Company
that would adversely affect your participation in or reduce your benefits under the Benefit Plans;
provided, however
, that a basis for Resignation for Good Reason shall not exist under this clause
(c) following a Change in Control if the Company offers a range of benefit plans and programs that,
taken as a whole, is comparable to the Benefit Plans; or
(iv)
a non-temporary relocation of your business office to a location more than fifty (50)
miles from the location at which you perform duties as of the effective date of the Change in
Control, except for required travel by you on the Companys business to an extent substantially
consistent with your business travel obligations prior to the Change in Control.
11.
Transferability.
Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option. In addition, if permitted by the Company you may transfer your option to a
trust if you are considered to be the sole beneficial owner (determined under Section 671 of the
Code and applicable state law) while the option is held in the trust, provided that you and the
trustee enter into a transfer and other agreements required by the Company.
12.
Right of First Refusal.
Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Companys bylaws
in effect at such time the Company elects to exercise its right;
provided, however,
that if your
option is an Incentive Stock Option and the right of first refusal described in the Companys
bylaws in effect at the time the Company elects to exercise its right is more beneficial to you
than the right of first refusal described in the Companys bylaws on the Date of Grant, then the
right of first refusal described in the Companys bylaws on the Date of Grant shall apply. The
Companys right of first refusal shall expire on the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on a national securities
exchange or quotation system.
13.
Right of Repurchase.
To the extent provided in the Companys bylaws in effect at
such time the Company elects to exercise its right, the Company shall have the right to repurchase
all or any part of the shares of Common Stock you acquire pursuant to the exercise of your option.
14.
Option not a Service Contract.
Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
15.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with the exercise of your option.
(b)
Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable legal conditions or restrictions, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid classification of your option as a liability for
financial accounting purposes). If the date of determination of any tax withholding obligation is
deferred to a date later than the date of exercise of your option, share withholding pursuant to
the preceding sentence shall not be permitted unless you make a proper and timely election under
Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred, to accelerate the
determination of such tax withholding obligation to the date of exercise of your option.
Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from
fully vested shares of Common Stock determined as of the date of exercise of your option that are
otherwise issuable to you upon such exercise. Any adverse consequences to you arising in
connection with such share withholding procedure shall be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein unless such obligations are satisfied.
16.
Tax Consequences
. You hereby agree that the Company does not have a duty to
design or administer the Plan or its other compensation programs in a manner that minimizes your
tax liabilities. You shall not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your
other compensation. In particular, you acknowledge that this option is exempt from Section 409A of
the Code only if the exercise price per share specified in the Grant Notice is at least equal to
the fair market value per share of the Common Stock on the Date of Grant and there is no other
impermissible deferral of compensation associated with the option. Because the Common Stock is not
traded on an established securities market, the Fair Market Value is determined by the Board,
perhaps in consultation with an independent valuation firm retained by the Company. You acknowledge
that there is no guarantee that the Internal Revenue Service will agree with the valuation as
determined by the Board, and you shall not make any claim against the Company, or any of its
Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts
that the valuation determined by the Board is less than the fair market value as subsequently
determined by the Internal Revenue Service.
17.
Notices.
Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
18.
Governing Plan Document.
Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
Attachment II
2008 Equity Incentive Plan
Attachment III
Notice of Exercise
Notice of Exercise
(NON-EMPLOYEE DIRECTOR STOCK OPTION)
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QuinStreet, Inc.
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1051 East Hillsdale Blvd.
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Foster City, CA 94404
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Date of Exercise:
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Type of option (check one):
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Incentive
o
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Nonstatutory
o
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Certificates to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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$
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Value of
shares of
QuinStreet, Inc. common
stock delivered herewith
2
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$
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 2008 Equity Incentive Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the shares of Common
Stock issued upon exercise of this option that occurs within two (2) years after the date of grant
of this option or within one (1) year after such shares of Common Stock are issued upon exercise of
this option.
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2
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Shares must meet the public trading requirements set
forth in the option. Shares must be valued in accordance with the terms of the
option being exercised, and must be owned free and clear of any liens, claims,
encumbrances or security interests. Certificates must be endorsed or
accompanied by an executed assignment separate from certificate.
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I hereby make the following certifications and representations with respect to the number of
shares of Common Stock of the Company listed above (the
Shares
), which are being acquired by me
for my own account upon exercise of the Option as set forth above:
I acknowledge that the Shares have not been registered under the Securities Act of 1933, as
amended (the
Securities Act
), and are deemed to constitute restricted securities under Rule 701
and Rule 144 promulgated under the Securities Act. I warrant and represent to the Company that I
have no present intention of distributing or selling said Shares, except as permitted under the
Securities Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for at least ninety days
(90) after the stock of the Company becomes publicly traded (
i.e.,
subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the Shares subject to the
provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing
limitations, as well as any legends reflecting restrictions pursuant to the Companys Articles of
Incorporation, Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of the underwriters) in
connection with the first underwritten registration of the offering of any securities of the
Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale of,
grant any option for the purchase of, or enter into any hedging or similar transaction with the
same economic effect as a sale, any shares of Common Stock or other securities of the Company for a
period of one hundred eighty (180) days following the effective date of a registration statement of
the Company filed under the Securities Act or such longer period as necessary to permit compliance
NASD Rule 2711 or NYSE Member Rule 472 and similar rules and regulations (the
Lock-Up Period
). I
further agree to execute and deliver such other agreements as may be reasonably requested by the
Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to
give further effect thereto. In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing restrictions until
the end of such period.
Exhibit 99.9
QuinStreet, Inc.
2010 Equity Incentive Plan
Adopted by the Board of Directors: November 17, 2009
Approved by the
Stockholders: January 22, 2010
1.
General.
(a) Successor to and Continuation of Prior Plan.
The Plan is intended as the successor to and
continuation of the QuinStreet, Inc. 2008 Equity Incentive Plan (the
Prior Plan
). Following the
Effective Date, no additional stock awards shall be granted under the Prior Plan. Any shares
remaining available for future issuance of stock awards under the Prior Plan as of the Effective
Date (the
Prior Plans Available Reserve
) shall become available for issuance pursuant to Stock
Awards granted hereunder. From and after the Effective Date, all outstanding stock awards granted
under the Prior Plan shall remain subject to the terms of the Prior Plan;
provided, however
, any
shares underlying outstanding stock awards granted under the Prior Plan that expire or terminate
for any reason prior to exercise or settlement or are forfeited because of the failure to meet a
contingency or condition required to vest such shares (the
Returning Shares
) shall become
available for issuance pursuant to Awards granted hereunder. All Awards granted on or after the
Effective Date of this Plan shall be subject to the terms of this Plan.
(b) Eligible Award Recipients.
The persons eligible to receive Awards are Employees,
Directors and Consultants.
(c) Available Awards.
The Plan provides for the grant of the following Awards: (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights (iv) Restricted
Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance
Cash Awards, and (viii) Other Stock Awards.
(d) Purpose.
The Company, by means of the Plan, seeks to secure and retain the services of
the group of persons eligible to receive Awards as set forth in Section 1(b), to provide incentives
for such persons to exert maximum efforts for the success of the Company and any Affiliate and to
provide a means by which such eligible recipients may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Awards.
2.
Administration.
(a) Administration by Board.
The Board shall administer the Plan unless and until the Board
delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c).
(b) Powers of Board.
The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
1
(i)
To determine from time to time (A) which of the persons eligible under the Plan shall be
granted Awards; (B) when and how each Award shall be granted; (C) what type or combination of types
of Award shall be granted; (D) the provisions of each Award granted (which need not be identical),
including the time or times when a person shall be permitted to receive cash or Common Stock
pursuant to a Stock Award; (E) the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person; and (F) the Fair Market Value applicable to a Stock
Award.
(ii)
To construe and interpret the Plan and Awards granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement or in
the written terms of a Performance Cash Award, in a manner and to the extent it shall deem
necessary or expedient to make the Plan or Award fully effective.
(iii)
To settle all controversies regarding the Plan and Awards granted under it.
(iv)
To accelerate the time at which an Award may first be exercised or the time during which
an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions
in the Award stating the time at which it may first be exercised or the time during which it will
vest.
(v)
To suspend or terminate the Plan at any time. Suspension or termination of the Plan shall
not impair rights and obligations under any Award granted while the Plan is in effect except with
the written consent of the affected Participant.
(vi)
To amend the Plan in any respect the Board deems necessary or advisable, including,
without limitation, by adopting amendments relating to Incentive Stock Options and certain
nonqualified deferred compensation under Section 409A of the Code and/or to bring the Plan or
Awards granted under the Plan into compliance therewith, subject to the limitations, if any, of
applicable law. However, except as provided in Section 9(a) relating to Capitalization Adjustments,
to the extent required by applicable law or listing requirements, stockholder approval shall be
required for any amendment of the Plan that either (A) materially increases the number of shares of
Common Stock available for issuance under the Plan, (B) materially expands the class of individuals
eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to
Participants under the Plan or materially reduces the price at which shares of Common Stock may be
issued or purchased under the Plan, (D) materially extends the term of the Plan, or (E) expands the
types of Awards available for issuance under the Plan. Except as provided above, rights under any
Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (1) the Company requests the consent of the affected Participant, and (2) such Participant
consents in writing.
(vii)
To submit any amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of (A) Section 162(m) of the Code
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to Covered Employees, (B) Section 422 of the Code regarding incentive stock
options or (C) Rule 16b-3.
2
(viii)
To approve forms of Award Agreements for use under the Plan and to amend the terms of
any one or more Awards, including, but not limited to, amendments to provide terms more favorable
to the Participant than previously provided in the Award Agreement, subject to any specified limits
in the Plan that are not subject to Board discretion;
provided however
, that except with respect to
amendments that disqualify or impair the status of an Incentive Stock Option, a Participants
rights under any Award shall not be impaired by any such amendment unless (A) the Company requests
the consent of the affected Participant, and (B) such Participant consents in writing.
Notwithstanding the foregoing, subject to the limitations of applicable law, if any, the Board may
amend the terms of any one or more Awards without the affected Participants consent if necessary
to maintain the qualified status of the Award as an Incentive Stock Option or to bring the Award
into compliance with Section 409A of the Code.
(ix)
Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company and that are not in conflict with the
provisions of the Plan or Awards.
(x)
To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Directors or Consultants who are foreign nationals or
employed outside the United States.
(xi)
To effect, at any time and from time to time, with the consent of any adversely affected
Participant, (A) the reduction of the exercise price (or strike price) of any outstanding Option or
SAR under the Plan; (B) the cancellation of any outstanding Option or SAR under the Plan and the
grant in substitution therefor of (1) a new Option or SAR under the Plan or another equity plan of
the Company covering the same or a different number of shares of Common Stock, (2) a Restricted
Stock Award, (3) a Restricted Stock Unit Award, (4) an Other Stock Award, (5) cash and/or (6) other
valuable consideration (as determined by the Board, in its sole discretion); or (C) any other
action that is treated as a repricing under generally accepted accounting principles.
(c) Delegation to Committee.
(i) General.
The Board may delegate some or all of the administration of the Plan to a
Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers theretofore possessed by
the Board that have been delegated to the Committee, including the power to delegate to a
subcommittee of the Committee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the
Plan, as may be adopted from time to time by the Board. The Board may retain the authority to
concurrently administer the Plan with the Committee and may, at any time, revest in the Board some
or all of the powers previously delegated.
(ii) Section 162(m) and Rule 16b-3 Compliance.
The Committee may consist solely of two or
more Outside Directors, in accordance with Section 162(m) of the Code, or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3.
3
(d) Effect of Boards Decision.
All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.
3.
Shares Subject to the Plan.
(a) Share Reserve.
Subject to Section 9(a) relating to Capitalization Adjustments, the
aggregate number of shares of Common Stock of the Company that may be issued pursuant to Stock
Awards after the Effective Date shall not exceed 587,717 shares, which number is the sum of
(i) the number of shares subject to the Prior Plans Available Reserve
plus
(ii) the Returning
Shares, if any, as such shares become available from time to time. In addition, the number of
shares of Common Stock available for issuance under the Plan shall automatically increase on July
1st of each year for a period of nine years commencing on July 1, 2010 and ending on (and
including) July 1, 2019, in an amount equal to five percent (5%) of the total number of shares of
Common Stock outstanding on June 30th of the preceding fiscal year. Notwithstanding the foregoing,
the Board may act prior to the first day of any fiscal year, to provide that there shall be no
increase in the share reserve for such fiscal year or that the increase in the share reserve for
such fiscal year shall be a lesser number of shares of Common Stock than would otherwise occur
pursuant to the preceding sentence. For clarity, the limitation in this Section 3(a) is a
limitation in the number of shares of Common Stock that may be issued pursuant to the Plan.
Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in
Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted by, as
applicable, NASDAQ Marketplace Rule 4350(i)(1)(A)(iii), NYSE Listed Company Manual Section 303A.08,
AMEX Company Guide Section 711 or other applicable stock exchange rules, and such issuance shall
not reduce the number of shares available for issuance under the Plan. Furthermore, if a Stock
Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered
by such Stock Award having been issued or (ii) is settled in cash (
i.e.
, the Participant receives
cash rather than stock), such expiration, termination or settlement shall not reduce (or otherwise
offset) the number of shares Common Stock that may be available for issuance under the Plan.
(b) Reversion of Shares to the Share Reserve.
If any shares of common stock issued pursuant
to a Stock Award are forfeited back to the Company because of the failure to meet a contingency or
condition required to vest such shares in the Participant, then the shares that are forfeited shall
revert to and again become available for issuance under the Plan. Any shares reacquired, withheld,
or not issued by the Company pursuant to Section 8(g) or as consideration for the exercise of an
Option shall again become available for issuance under the Plan. For the avoidance of doubt, if an
appreciation distribution in respect of a Stock Appreciation Right is paid in shares of Common
Stock, the number of shares subject to the Stock Award that are not delivered to the Participant
shall remain available for subsequent issuance under the Plan.
(c) Incentive Stock Option Limit.
Notwithstanding anything to the contrary in this Section 3
and, subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the
aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of
Incentive Stock Options shall be 30,000,000 shares of Common Stock.
4
(d) Source of Shares.
The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the Company on the open market
or otherwise.
4.
Eligibility.
(a) Eligibility for Specific Stock Awards
. Incentive Stock Options may be granted only to
employees of the Company or a parent corporation or subsidiary corporation thereof (as such
terms are defined in Sections 424(e) and (f) of the Code). Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants;
provided, however
, Nonstatutory
Stock Options and SARs may not be granted to Employees, Directors and Consultants who are providing
Continuous Service only to any parent of the Company, as such term is defined in Rule 405, unless
the stock underlying such Stock Awards is treated as service recipient stock under Section 409A
of the Code because the Stock Awards are granted pursuant to a corporate transaction (such as a
spin off transaction) or unless such Stock Awards comply with the distribution requirements of
Section 409A of the Code.
(b) Ten Percent Stockholders.
A Ten Percent Stockholder shall not be granted an Incentive
Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value on the date of grant and the Option is not exercisable after the expiration
of five (5) years from the date of grant.
5.
Provisions Relating to Options and Stock Appreciation Rights.
Each Option or SAR shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options
or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates shall be issued for shares of Common Stock purchased on exercise of
each type of Option. If an Option is not specifically designated as an Incentive Stock Option, then
the Option shall be a Nonstatutory Stock Option. The provisions of separate Options or SARs need
not be identical;
provided, however
, that each Option Agreement or Stock Appreciation Right
Agreement shall conform to (through incorporation of provisions hereof by reference in the
applicable Award Agreement or otherwise) the substance of each of the following provisions:
(a) Term.
Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no
Option or SAR shall be exercisable after the expiration of ten (10) years from the date of its
grant or such shorter period specified in the Award Agreement.
(b) Exercise Price.
Subject to the provisions of Section 4(b) regarding Ten Percent
Stockholders, the exercise price (or strike price) of each Option or SAR shall be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option or SAR on
the date the Option or SAR is granted. Notwithstanding the foregoing, an Option or SAR may be
granted with an exercise price (or strike price) lower than one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Option or SAR if such Option or SAR is granted
pursuant to an assumption of or substitution for another option or stock appreciation right
pursuant to a Corporate Transaction and in a manner consistent with the
5
provisions of Sections 409A and, if applicable, 424(a) of the Code. Each SAR will be
denominated in shares of Common Stock equivalents.
(c) Purchase Price for Options.
The purchase price of Common Stock acquired pursuant to the
exercise of an Option shall be paid, to the extent permitted by applicable law and as determined by
the Board in its sole discretion, by any combination of the methods of payment set forth below.
The Board shall have the authority to grant Options that do not permit all of the following methods
of payment (or otherwise restrict the ability to use certain methods) and to grant Options that
require the consent of the Company to utilize a particular method of payment. The permitted
methods of payment are as follows:
(i)
by cash, check, bank draft or money order payable to the Company;
(ii)
pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of the stock subject to the Option, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;
(iii)
by delivery to the Company (either by actual delivery or attestation) of shares of
Common Stock;
(iv)
if the option is a Nonstatutory Stock Option, by a net exercise arrangement pursuant to
which the Company will reduce the number of shares of Common Stock issuable upon exercise by the
largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise
price;
provided, however
, that the Company shall accept a cash or other payment from the
Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by
such reduction in the number of whole shares to be issued;
provided, further,
that shares of Common
Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent
that (A) shares issuable upon exercise are reduced to pay the exercise price pursuant to the net
exercise, (B) shares are delivered to the Participant as a result of such exercise, and (C) shares
are withheld to satisfy tax withholding obligations; or
(v)
in any other form of legal consideration that may be acceptable to the Board.
(d) Exercise and Payment of a SAR.
To exercise any outstanding Stock Appreciation Right, the
Participant must provide written notice of exercise to the Company in compliance with the
provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. The
appreciation distribution payable on the exercise of a Stock Appreciation Right will be not greater
than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the
exercise of the Stock Appreciation Right) of a number of shares of Common Stock equal to the number
of Common Stock equivalents in which the Participant is vested under such Stock Appreciation Right,
and with respect to which the Participant is exercising the Stock Appreciation Right on such date,
over (B) the strike price that will be determined by the Board at the time of grant of the Stock
Appreciation Right. The appreciation distribution in respect to a Stock Appreciation Right may be
paid in Common Stock, in cash, in any combination of the two or in any other form of consideration,
as
6
determined by the Board and contained in the Stock Appreciation Right Agreement evidencing
such Stock Appreciation Right.
(e) Transferability of Options and SARs.
The Board may, in its sole discretion, impose such
limitations on the transferability of Options and SARs as the Board shall determine. In the
absence of such a determination by the Board to the contrary, the following restrictions on the
transferability of Options and SARs shall apply:
(i) Restrictions on Transfer.
An Option or SAR shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant;
provided, however
, that the Board may, in its sole discretion,
permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and
securities laws upon the Participants request. Except as explicitly provided herein, neither an
Option nor a SAR may be transferred for consideration.
(ii) Domestic Relations Orders.
Notwithstanding the foregoing, an Option or SAR may be
transferred pursuant to a domestic relations order;
provided, however
, that if an Option is an
Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of
such transfer.
(iii) Beneficiary Designation.
Notwithstanding the foregoing, the Participant may, by
delivering written notice to the Company, in a form provided by or otherwise satisfactory to the
Company and any broker designated by the Company to effect Option exercises, designate a third
party who, in the event of the death of the Participant, shall thereafter be entitled to exercise
the Option or SAR and receive the Common Stock or other consideration resulting from such exercise.
In the absence of such a designation, the executor or administrator of the Participants estate
shall be entitled to exercise the Option or SAR and receive the Common Stock or other consideration
resulting from such exercise.
(f) Vesting Generally.
The total number of shares of Common Stock subject to an Option or SAR
may vest and therefore become exercisable in periodic installments that may or may not be equal.
The Option or SAR may be subject to such other terms and conditions on the time or times when it
may or may not be exercised (which may be based on the satisfaction of Performance Goals or other
criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs
may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions
governing the minimum number of shares of Common Stock as to which an Option or SAR may be
exercised.
(g) Termination of Continuous Service.
Except as otherwise provided in the applicable Award
Agreement or other agreement between the Participant and the Company, if a Participants Continuous
Service terminates (other than for Cause or upon the Participants death or Disability), the
Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled
to exercise such Award as of the date of termination of Continuous Service) but only within such
period of time ending on the earlier of (i) the date three (3) months following the termination of
the Participants Continuous Service (or such longer or shorter period specified in the applicable
Award Agreement), or (ii) the expiration of the term of the Option or SAR as set forth in the Award
Agreement. If, after termination of Continuous Service,
7
the Participant does not exercise his or her Option or SAR within the time specified herein or
in the Award Agreement (as applicable), the Option or SAR shall terminate.
(h) Extension of Termination Date.
If the exercise of an Option or SAR following the
termination of the Participants Continuous Service (other than for Cause or upon the Participants
death or Disability) would be prohibited at any time solely because the issuance of shares of
Common Stock would violate the registration requirements under the Securities Act, then the Option
or SAR shall terminate on the earlier of (i) the expiration of a total period of three (3) months
(that need not be consecutive) after the termination of the Participants Continuous Service during
which the exercise of the Option or SAR would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option or SAR as set forth in the
applicable Award Agreement. In addition, unless otherwise provided in a Participants Award
Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the
termination of the Participants Continuous Service (other than for Cause) would violate the
Companys insider trading policy, then the Option or SAR shall terminate on the earlier of (i) the
expiration of a period equal to the applicable post-termination exercise period after the
termination of the Participants Continuous Service during which the exercise of the Option or SAR
would not be in violation of the Companys insider trading policy, or (ii) the expiration of the
term of the Option or SAR as set forth in the applicable Award Agreement.
(i) Disability of Participant.
Except as otherwise provided in the applicable Award Agreement
or other agreement between the Participant and the Company, if a Participants Continuous Service
terminates as a result of the Participants Disability, the Participant may exercise his or her
Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of
the date of termination of Continuous Service), but only within such period of time ending on the
earlier of (i) the date twelve (12) months following such termination of Continuous Service (or
such longer or shorter period specified in the Award Agreement), or (ii) the expiration of the term
of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous
Service, the Participant does not exercise his or her Option or SAR within the time specified
herein or in the Award Agreement (as applicable), the Option or SAR (as applicable) shall
terminate.
(j) Death of Participant.
Except as otherwise provided in the applicable Award Agreement or
other agreement between the Participant and the Company, if (i) a Participants Continuous Service
terminates as a result of the Participants death, or (ii) the Participant dies within the period
(if any) specified in the Award Agreement after the termination of the Participants Continuous
Service for a reason other than death, then the Option or SAR may be exercised (to the extent the
Participant was entitled to exercise such Option or SAR as of the date of death) by the
Participants estate, by a person who acquired the right to exercise the Option or SAR by bequest
or inheritance or by a person designated to exercise the Option or SAR upon the Participants
death, but only within the period ending on the earlier of (i) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the Award Agreement), or
(ii) the expiration of the term of such Option or SAR as set forth in the Award Agreement. If,
after the Participants death, the Option or SAR is not exercised within the time specified herein
or in the Award Agreement (as applicable), the Option or SAR shall terminate.
8
(k) Termination for Cause.
Except as explicitly provided otherwise in a Participants Award
Agreement, if a Participants Continuous Service is terminated for Cause, the Option or SAR shall
terminate upon the date of such Participants termination of Continuous Service, and the
Participant shall be prohibited from exercising his or her Option or SAR from and after the time of
such termination of Continuous Service.
(l) Non-Exempt Employees
. No Option or SAR granted to an Employee who is a non-exempt
employee for purposes of the Fair Labor Standards Act of 1938, as amended, shall be first
exercisable for any shares of Common Stock until at least six months following the date of grant of
the Option or SAR. Notwithstanding the foregoing, consistent with the provisions of the Worker
Economic Opportunity Act, (i) in the event of the Participants death or Disability, (ii) upon a
Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii)
upon a Change in Control, or (iv) upon the Participants retirement (as such term may be defined in
the Participants Award Agreement or in another applicable agreement or in accordance with the
Companys then current employment policies and guidelines), any such vested Options and SARs may be
exercised earlier than six months following the date of grant. The foregoing provision is intended
to operate so that any income derived by a non-exempt employee in connection with the exercise or
vesting of an Option or SAR will be exempt from his or her regular rate of pay.
6.
Provisions of Stock Awards other than Options and SARs.
(a) Restricted Stock Awards.
Each Restricted Stock Award Agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. To the extent
consistent with the Companys Bylaws, at the Boards election, shares of Common Stock may be (x)
held in book entry form subject to the Companys instructions until any restrictions relating to
the Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate shall be
held in such form and manner as determined by the Board. The terms and conditions of Restricted
Stock Award Agreements may change from time to time, and the terms and conditions of separate
Restricted Stock Award Agreements need not be identical;
provided, however
, that each Restricted
Stock Award Agreement shall conform to (through incorporation of the provisions hereof by reference
in the agreement or otherwise) the substance of each of the following provisions:
(i) Consideration.
A Restricted Stock Award may be awarded in consideration for (A) cash,
check, bank draft or money order payable to the Company, (B) past services to the Company or an
Affiliate, or (C) any other form of legal consideration (including future services) that may be
acceptable to the Board, in its sole discretion, and permissible under applicable law.
(ii) Vesting.
Shares of Common Stock awarded under the Restricted Stock Award Agreement may
be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by
the Board.
(iii) Termination of Participants Continuous Service.
If a Participants Continuous Service
terminates, the Company may receive through a forfeiture condition or a repurchase right any or all
of the shares of Common Stock held by the Participant that have not
9
vested as of the date of termination of Continuous Service under the terms of the Restricted
Stock Award Agreement.
(iv) Transferability.
Rights to acquire shares of Common Stock under the Restricted Stock
Award Agreement shall be transferable by the Participant only upon such terms and conditions as are
set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole
discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains
subject to the terms of the Restricted Stock Award Agreement.
(v) Dividends.
A Restricted Stock Award Agreement may provide that any dividends paid on
Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the
shares subject to the Restricted Stock Award to which they relate.
(b) Restricted Stock Unit Awards.
Each Restricted Stock Unit Award Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem appropriate. The terms
and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical;
provided, however
, that each Restricted Stock Unit Award Agreement shall conform to (through
incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of
each of the following provisions:
(i) Consideration.
At the time of grant of a Restricted Stock Unit Award, the Board will
determine the consideration, if any, to be paid by the Participant upon delivery of each share of
Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by
the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid
in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and
permissible under applicable law.
(ii) Vesting.
At the time of the grant of a Restricted Stock Unit Award, the Board may impose
such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its
sole discretion, deems appropriate.
(iii) Payment
. A Restricted Stock Unit Award may be settled by the delivery of shares of
Common Stock, their cash equivalent, any combination thereof or in any other form of consideration,
as determined by the Board and contained in the Restricted Stock Unit Award Agreement.
(iv) Additional Restrictions.
At the time of the grant of a Restricted Stock Unit Award, the
Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery
of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award
to a time after the vesting of such Restricted Stock Unit Award.
(v) Dividend Equivalents.
Dividend equivalents may be credited in respect of shares of Common
Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend
equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock
Unit Award in such manner as determined by the Board. Any additional shares covered by the
Restricted Stock Unit Award credited by reason of such
10
dividend equivalents will be subject to all of the same terms and conditions of the underlying
Restricted Stock Unit Award Agreement to which they relate.
(vi) Termination of Participants Continuous Service.
Except as otherwise provided in the
applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award
that has not vested will be forfeited upon the Participants termination of Continuous Service.
(c) Performance Awards.
(i) Performance Stock Awards
. A Performance Stock Award is a Stock Award that may vest or may
be exercised contingent upon the attainment during a Performance Period of certain Performance
Goals. A Performance Stock Award may, but need not, require the completion of a specified period
of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved
during the Performance Period, and the measure of whether and to what degree such Performance Goals
have been attained shall be conclusively determined by the Committee, in its sole discretion. The
Board may provide for or, subject to such terms and conditions as the Board may specify, may permit
a Participant to elect for, the payment of any Performance Stock Award to be deferred to a
specified date or event. In addition, to the extent permitted by applicable law and the applicable
Award Agreement, the Board may determine that cash may be used in payment of Performance Stock
Awards.
(ii) Performance Cash Awards
. A Performance Cash Award is a cash award that may be paid
contingent upon the attainment during a Performance Period of certain Performance Goals. A
Performance Cash Award may also require the completion of a specified period of Continuous Service.
At the time of grant of a Performance Cash Award, the length of any Performance Period, the
Performance Goals to be achieved during the Performance Period, and the measure of whether and to
what degree such Performance Goals have been attained shall be conclusively determined by the
Committee, in its sole discretion. The Board may provide for or, subject to such terms and
conditions as the Board may specify, may permit a Participant to elect for, the payment of any
Performance Cash Award to be deferred to a specified date or event. The Committee may specify the
form of payment of Performance Cash Awards, which may be cash or other property, or may provide for
a Participant to have the option for his or her Performance Cash Award, or such portion thereof as
the Board may specify, to be paid in whole or in part in cash or other property.
(iii) Section 162(m) Compliance
. Unless otherwise permitted in compliance with the
requirements of Section 162(m) of the Code with respect to an Award intended to qualify as
performance-based compensation thereunder, the Committee shall establish the Performance Goals
applicable to, and the formula for calculating the amount payable under, the Award no later than
the earlier of (a) the date ninety (90) days after the commencement of the applicable Performance
Period, or (b) the date on which twenty-five (25%) of the Performance Period has elapsed, and in
any event at a time when the achievement of the applicable Performance Goals remains substantially
uncertain. Prior to the payment of any compensation under an Award intended to qualify as
performance-based compensation under Section 162(m) of the Code, the Committee shall certify the
extent to which any Performance Goals and any other material terms under such Award have been
satisfied (other than in cases where such relate
11
solely to the increase in the value of the Common Stock). Notwithstanding satisfaction of any
completion of any Performance Goals, to the extent specified at the time of grant of an Award to
covered employees within the meaning of Section 162(m) of the Code, the number of Shares,
Options, cash or other benefits granted, issued, retainable and/or vested under an Award on account
of satisfaction of such Performance Goals may be reduced by the Committee on the basis of such
further considerations as the Committee, in its sole discretion, shall determine.
(d) Other Stock Awards
. Other forms of Stock Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options
or stock rights with an exercise price or strike price less than 100% of the Fair Market Value of
the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards
provided for under Section 5 and the preceding provisions of this Section 6. Subject to the
provisions of the Plan, the Board shall have sole and complete authority to determine the persons
to whom and the time or times at which such Other Stock Awards will be granted, the number of
shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock
Awards and all other terms and conditions of such Other Stock Awards.
7.
Covenants of the Company.
(a) Availability of Shares.
During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock reasonably required to satisfy such
Stock Awards.
(b) Securities Law Compliance.
The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however
, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained. A Participant shall not be eligible for the grant of a Stock
Award or the subsequent issuance of Common Stock pursuant to the Stock Award if such grant or
issuance would be in violation of any applicable securities law.
(c) No Obligation to Notify or Minimize Taxes.
The Company shall have no duty or obligation
to any Participant to advise such holder as to the time or manner of exercising such Stock Award.
Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder
of a pending termination or expiration of a Stock Award or a possible period in which the Stock
Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences
of a Stock Award to the holder of such Stock Award.
12
8.
Miscellaneous.
(a) Use of Proceeds from Sales of Common Stock.
Proceeds from the sale of shares of Common
Stock pursuant to Stock Awards shall constitute general funds of the Company.
(b) Corporate Action Constituting Grant of Stock Awards.
Corporate action constituting a
grant by the Company of a Stock Award to any Participant shall be deemed completed as of the date
of such corporate action, unless otherwise determined by the Board, regardless of when the
instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually
received or accepted by, the Participant.
(c) Stockholder Rights.
No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until (i) such Participant has satisfied all requirements for exercise of the Stock
Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to
such Stock Award has been entered into the books and records of the Company.
(d) No Employment or Other Service Rights.
Nothing in the Plan, any Stock Award Agreement or
any other instrument executed thereunder or in connection with any Award granted pursuant thereto
shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Stock Award was granted or shall affect the right of the Company
or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or
without cause, (ii) the service of a Consultant pursuant to the terms of such Consultants
agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the
Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the
state in which the Company or the Affiliate is incorporated, as the case may be.
(e) Incentive Stock Option $100,000 Limitation.
To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof that exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of
the applicable Option Agreement(s).
(f) Investment Assurances.
The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participants knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Stock Award for the Participants own
account and not with any present intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant
13
to such requirements, shall be inoperative if (A) the issuance of the shares upon the exercise
or acquisition of Common Stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (B) as to any particular requirement,
a determination is made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon advice of counsel
to the Company, place legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the Common Stock.
(g) Withholding Obligations.
Unless prohibited by the terms of a Stock Award Agreement, the
Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation
relating to an Award by any of the following means or by a combination of such means: (i) causing
the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares
of Common Stock issued or otherwise issuable to the Participant in connection with the Award;
provided, however,
that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid
classification of the Stock Award as a liability for financial accounting purposes); (iii)
withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise
payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.
(h) Electronic Delivery
. Any reference herein to a written agreement or document shall
include any agreement or document delivered electronically or posted on the Companys intranet.
(i) Deferrals.
To the extent permitted by applicable law, the Board, in its sole discretion,
may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting
or settlement of all or a portion of any Award may be deferred and may establish programs and
procedures for deferral elections to be made by Participants. Deferrals by Participants will be
made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an employee or otherwise providing
services to the Company. The Board is authorized to make deferrals of Awards and determine when,
and in what annual percentages, Participants may receive payments, including lump sum payments,
following the Participants termination of Continuous Service, and implement such other terms and
conditions consistent with the provisions of the Plan and in accordance with applicable law.
(j) Compliance with Section 409A.
To the extent that the Board determines that any Award
granted hereunder is subject to Section 409A of the Code, the Award Agreement evidencing such Award
shall incorporate the terms and conditions necessary to avoid the consequences specified in Section
409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A of the Code. Notwithstanding anything to the contrary
in this Plan (and unless the Award Agreement specifically provides otherwise), if the Shares are
publicly traded and a Participant holding an Award that constitutes deferred compensation under
Section 409A of the Code is a specified employee for purposes of Section 409A of the Code, no
distribution or payment of any amount shall be made upon a separation from service before a date
that is six (6) months following the
14
date of such Participants separation from service (as defined in Section 409A of the Code
without regard to alternative definitions thereunder) or, if earlier, the date of the Participants
death.
9.
Adjustments upon Changes in Common Stock; Other Corporate Events.
(a) Capitalization Adjustments
. In the event of a Capitalization Adjustment, the Board shall
appropriately and proportionately adjust: (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities
that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c) and
(iii) the class(es) and number of securities and price per share of stock subject to outstanding
Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding
and conclusive.
(b) Dissolution or Liquidation
. Except as otherwise provided in the Stock Award Agreement, in
the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than
Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a
forfeiture condition or the Companys right of repurchase) shall terminate immediately prior to the
completion of such dissolution or liquidation, and the shares of Common Stock subject to the
Companys repurchase rights or subject to a forfeiture condition may be repurchased or reacquired
by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous
Service,
provided, however
, that the Board may, in its sole discretion, cause some or all Stock
Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to
the extent such Stock Awards have not previously expired or terminated) before the dissolution or
liquidation is completed but contingent on its completion.
(c) Corporate Transaction.
The following provisions shall apply to Stock Awards in the event
of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award
or any other written agreement between the Company or any Affiliate and the holder of the Stock
Award or unless otherwise expressly provided by the Board at the time of grant of a Stock Award.
In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the
Board shall take one or more of the following actions with respect to Stock Awards, contingent upon
the closing or completion of the Corporate Transaction:
(i)
arrange for the surviving corporation or acquiring corporation (or the surviving or
acquiring corporations parent company) to assume or continue the Stock Award or to substitute a
similar stock award for the Stock Award (including, but not limited to, an award to acquire the
same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);
(ii)
arrange for the assignment of any reacquisition or repurchase rights held by the Company
in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or
acquiring corporation (or the surviving or acquiring corporations parent company);
15
(iii)
accelerate the vesting of the Stock Award (and, if applicable, the time at which the
Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction
as the Board shall determine (or, if the Board shall not determine such a date, to the date that is
five (5) days prior to the effective date of the Corporate Transaction), with such Stock Award
terminating if not exercised (if applicable) at or prior to the effective time of the Corporate
Transaction;
(iv)
arrange for the lapse of any reacquisition or repurchase rights held by the Company with
respect to the Stock Award;
(v)
cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not
exercised prior to the effective time of the Corporate Transaction, in exchange for such cash
consideration, if any, as the Board, in its sole discretion, may consider appropriate; and
(vi)
make a payment, in such form as may be determined by the Board equal to the excess, if
any, of (A) the value of the property the Participant would have received upon the exercise of the
Stock Award, over (B) any exercise price payable by such holder in connection with such exercise.
The Board need not take the same action or actions with respect to all Stock Awards or portions
thereof or with respect to all Participants.
(d) Change in Control.
A Stock Award may be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement
for such Stock Award or as may be provided in any other written agreement between the Company or
any Affiliate and the Participant, but in the absence of such provision, no such acceleration shall
occur.
10.
Termination or Suspension of the Plan.
(a) Plan Term.
The Board may suspend or terminate the Plan at any time;
provided, however
that Incentive Stock Options may no longer be granted under the Plan after the day before the tenth
(10th) anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the
date the Plan is approved by the stockholders of the Company. No Awards may be granted under the
Plan while the Plan is suspended or after it is terminated.
(b) No Impairment of Rights.
Suspension or termination of the Plan shall not impair rights
and obligations under any Award granted while the Plan is in effect except with the written consent
of the affected Participant.
11.
Effective Date of Plan.
This Plan shall become effective on the Effective Date, but no Award shall be exercised (or in
the case of a Restricted Stock Award, Restricted Stock Unit Award, or Other Stock Award shall be
granted) unless and until the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve months before or after the date the Plan is adopted by the Board.
16
12.
Choice of Law.
The law of the state of California shall govern all questions concerning the construction, validity
and interpretation of this Plan, without regard to that states conflict of laws rules.
13.
Definitions.
As used in the Plan, the following definitions shall apply to the
capitalized terms indicated below:
(a)
Affiliate
means, at the time of determination, any parent or subsidiary of the
Company as such terms are defined in Rule 405 of the Securities Act. The Board shall have the
authority to determine the time or times at which parent or subsidiary status is determined
within the foregoing definition.
(b)
Award
means a Stock Award or a Performance Cash Award.
(c)
Award Agreement
means a written agreement between the Company and a Participant
evidencing the terms and conditions of an Award.
(d)
Board
means the Board of Directors of the Company.
(e)
Capitalization Adjustment
means any change that is made in, or other events that occur
with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the
Effective Date without the receipt of consideration by the Company through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than
cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or any similar equity restructuring transaction,
as that term is used in Statement of Financial Accounting Standards No. 123 (revised).
Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall
not be treated as a Capitalization Adjustment.
(f)
Cause
shall have the meaning ascribed to such term in any written agreement between the
Participant and the Company defining such term and, in the absence of such agreement, such term
shall mean with respect to a Participant, the occurrence of any of the following events, if such
event results in a demonstrably harmful impact on the Companys business or reputation, or that of
any of its Subsidiaries: (i) such Participants commission of any felony or any crime involving
fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii)
such Participants attempted commission of, or participation in, a fraud or act of dishonesty
against the Company; (iii) such Participants intentional, material violation of any contract or
agreement between the Participant and the Company or of any statutory duty owed to the Company;
(iv) such Participants unauthorized use or disclosure of the Companys confidential information or
trade secrets; or (v) such Participants gross misconduct. The determination that a termination of
the Participants Continuous Service is either for Cause or without Cause shall be made by the
Company in its sole discretion. Any determination by the Company that the Continuous Service of a
Participant was terminated by reason of dismissal without Cause for the purposes of outstanding
Awards held by such Participant shall have no effect upon any determination of the rights or
obligations of the Company or such Participant for any other purpose.
17
(g)
Change in Control
means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
(i)
any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Companys
then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company directly from the Company, (B) on account of the
acquisition of securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person that acquires the Companys securities in a transaction or series of related
transactions the primary purpose of which is to obtain financing for the Company through the
issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange
Act Person (the
Subject Person
) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting securities by the
Company reducing the number of shares outstanding, provided that if a Change in Control would occur
(but for the operation of this sentence) as a result of the acquisition of voting securities by the
Company, and after such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not occurred, increases
the percentage of the then outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control shall be deemed to occur;
(ii)
there is consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly
or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%)
of the combined outstanding voting power of the surviving Entity in such merger, consolidation or
similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power
of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions as their Ownership of the outstanding voting securities
of the Company immediately prior to such transaction;
(iii)
the stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company
shall otherwise occur, except for a liquidation into a parent corporation;
(iv)
there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are Owned by stockholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of the Company
immediately prior to such sale, lease, license or other disposition; or
(v)
individuals who, on the date the Plan is adopted by the Board, are members of the Board
(the
Incumbent Board
) cease for any reason to constitute at least a
18
majority of the members of the Board;
provided, however
, that if the appointment or election
(or nomination for election) of any new Board member was approved or recommended by a majority vote
of the members of the Incumbent Board then still in office, such new member shall, for purposes of
this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in
Control shall not include a sale of assets, merger or other transaction effected exclusively for
the purpose of changing the domicile of the Company, and (B) the definition of Change in Control
(or any analogous term) in an individual written agreement between the Company or any Affiliate and
the Participant shall supersede the foregoing definition with respect to Awards subject to such
agreement;
provided, however
, that if no definition of Change in Control or any analogous term is
set forth in such an individual written agreement, the foregoing definition shall apply.
(h)
Code
means the Internal Revenue Code of 1986, as amended, including any applicable
regulations and guidance thereunder.
(i)
Committee
means a committee of one or more Directors to whom authority has been
delegated by the Board in accordance with Section 2(c).
(j)
Common Stock
means the common stock of the Company.
(k)
Company
means QuinStreet, Inc., a Delaware corporation.
(l)
Consultant
means any person, including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is compensated for such services, or
(ii) serving as a member of the board of directors of an Affiliate and is compensated for such
services. However, service solely as a Director, or payment of a fee for such service, shall not
cause a Director to be considered a Consultant for purposes of the Plan. Notwithstanding the
foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration
Statement under the Securities Act is available to register either the offer or the sale of the
Companys securities to such person.
(m)
Continuous Service
means that the Participants service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or an Affiliate as
an Employee, Consultant or Director or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the Participants service
with the Company or an Affiliate, shall not terminate a Participants Continuous Service;
provided,
however,
if the Entity for which a Participant is rendering services ceases to qualify as an
Affiliate, as determined by the Board, in its sole discretion, such Participants Continuous
Service shall be considered to have terminated on the date such Entity ceases to qualify as an
Affiliate. To the extent permitted by law, the Board or the chief executive officer of the
Company, in that partys sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of (i) any leave of absence approved by the Board or Chief
Executive Officer, including sick leave, military leave or any other personal leave, or
(ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the
19
foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting
in a Stock Award only to such extent as may be provided in the Companys leave of absence policy,
in the written terms of any leave of absence agreement or policy applicable to the Participant, or
as otherwise required by law.
(n)
Corporate Transaction
means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
(i)
the consummation of a sale or other disposition of all or substantially all, as determined
by the Board, in its sole discretion, of the consolidated assets of the Company and its
Subsidiaries;
(ii)
the consummation of a sale or other disposition of at least ninety percent (90%) of the
outstanding securities of the Company;
(iii)
the consummation of a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or
(iv)
the consummation of a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of
the merger, consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise.
(o)
Covered Employee
shall have the meaning provided in Section 162(m)(3) of the Code.
(p)
Director
means a member of the Board.
(q)
Disability
means, with respect to a Participant, the inability of such Participant to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months, as provided in Sections
22(e)(3) and 409A(a)(2)(c)(i) of the Code, and shall be determined by the Board on the basis of
such medical evidence as the Board deems warranted under the circumstances.
(r)
Effective Date
means the effective date of this Plan document, which is the date of the
underwriting agreement between the Company and the underwriter(s) managing the initial public
offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public
offering.
(s)
Employee
means any person employed by the Company or an Affiliate. However, service
solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an Employee for purposes of the Plan.
(t)
Entity
means a corporation, partnership, limited liability company or other entity.
20
(u)
Exchange Act
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
(v)
Exchange Act Person
means any natural person, Entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that Exchange Act Person shall not include
(i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or
any Subsidiary of the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter
temporarily holding securities pursuant to a registered public offering of such securities, (iv) an
Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or
group (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the
Effective Date, is the Owner, directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Companys then outstanding
securities.
(w)
Fair Market Value
means, as of any date, the value of the Common Stock determined as
follows:
(i)
If the Common Stock is listed on any established stock exchange or traded on any
established market, the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the date of determination, as reported in a
source the Board deems reliable.
(ii)
Unless otherwise provided by the Board, if there is no closing sales price for the Common
Stock on the date of determination, then the Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation exists.
(iii)
In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of
the Code.
(x)
Incentive Stock Option
means an option granted pursuant to Section 5 of the Plan that is
intended to be, and qualifies as, an incentive stock option within the meaning of Section 422 of
the Code.
(y)
Non-Employee Director
means a Director who either (i) is not a current employee or
officer of the Company or an Affiliate, does not receive compensation, either directly or
indirectly, from the Company or an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities
Act (
Regulation S-K
)), does not possess an interest in any other transaction for which disclosure
would be required under Item 404(a) of Regulation S-K, and is not engaged in a business
relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or
(ii) is otherwise considered a non-employee director for purposes of Rule 16b-3.
21
(z)
Nonstatutory Stock Option
means any option granted pursuant to Section 5 of the Plan
that does not qualify as an Incentive Stock Option.
(aa)
Officer
means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act.
(bb)
Option
means an Incentive Stock Option or a Nonstatutory Stock Option to purchase
shares of Common Stock granted pursuant to the Plan.
(cc)
Option Agreement
means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to
the terms and conditions of the Plan.
(dd)
Optionholder
means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.
(ee)
Other Stock Award
means an award based in whole or in part by reference to the Common
Stock which is granted pursuant to the terms and conditions of Section 6(d).
(ff)
Other Stock Award Agreement
means a written agreement between the Company and a holder
of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each
Other Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(gg)
Outside Director
means a Director who either (i) is not a current employee of the
Company or an affiliated corporation (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an affiliated
corporation who receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or
an affiliated corporation, and does not receive remuneration from the Company or an affiliated
corporation, either directly or indirectly, in any capacity other than as a Director, or (ii) is
otherwise considered an outside director for purposes of Section 162(m) of the Code.
(hh)
Own,
Owned,
Owner,
Ownership
A person or Entity shall be deemed to Own, to
have Owned, to be the Owner of, or to have acquired Ownership of securities if such person or
Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities.
(ii)
Participant
means a person to whom an Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.
(jj)
Performance Cash Award
means an award of cash granted pursuant to the terms and
conditions of Section 6(c)(ii).
(kk)
Performance Criteria
means the one or more criteria that the Board shall select for
purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria
that shall be used to establish such Performance Goals may be based on any one of, or
22
combination of, the following as determined by the Board: (i) earnings (including earnings per
share and net earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings
before interest, taxes, depreciation and amortization; (iv) total stockholder return; (v) return on
equity or average stockholders equity; (vi) return on assets, investment, or capital employed;
(vii) stock price; (viii) margin (including gross margin); (ix) income (before or after taxes); (x)
operating income; (xi) operating income after taxes; (xii) pre-tax profit; (xiii) operating cash
flow; (xiv) sales or revenue targets; (xv) increases in revenue or product revenue; (xvi) expenses
and cost reduction goals; (xvii) improvement in or attainment of working capital levels;
(xiii) economic value added (or an equivalent metric); (xix) market share; (xx) cash flow; (xxi)
cash flow per share; (xxii) share price performance; (xxiii) debt reduction; (xxiv) implementation
or completion of projects or processes; (xxv) customer satisfaction; (xxvi) stockholders equity;
(xxvii) capital expenditures; (xxiii) debt levels; (xxix) operating profit or net operating profit;
(xxx) workforce diversity; (xxxi) growth of net income or operating income; (xxxii) billings; and
(xxxiii) to the extent that an Award is not intended to comply with Section 162(m) of the Code,
other measures of performance selected by the Board.
(ll)
Performance Goals
means, for a Performance Period, the one or more goals established by
the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be
based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates,
or business segments, and in either absolute terms or relative to the performance of one or more
comparable companies or the performance of one or more relevant indices. Unless specified
otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such
other document setting forth the Performance Goals at the time the Performance Goals are
established, the Board shall appropriately make adjustments in the method of calculating the
attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring
and/or other nonrecurring charges; (2) to exclude exchange rate effects, as applicable, for
non-U.S. dollar denominated Performance Goals; (3) to exclude the effects of changes to generally
accepted accounting principles; (4) to exclude the effects of any statutory adjustments to
corporate tax rates; and (5) to exclude the effects of any extraordinary items as determined
under generally accepted accounting principles. In addition, the Board retains the discretion to
reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals
and to define the manner of calculating the Performance Criteria it selects to use for such
Performance Period. Partial achievement of the specified criteria may result in the payment or
vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the
written terms of a Performance Cash Award.
(mm)
Performance Period
means the period of time selected by the Board over which the
attainment of one or more Performance Goals will be measured for the purpose of determining a
Participants right to and the payment of a Stock Award or a Performance Cash Award. Performance
Periods may be of varying and overlapping duration, at the sole discretion of the Board.
(nn)
Performance Stock Award
means a Stock Award granted under the terms and conditions of
Section 6(c)(i).
(oo)
Plan
means this QuinStreet, Inc. 2010 Equity Incentive Plan.
23
(pp)
Restricted Stock Award
means an award of shares of Common Stock which is granted
pursuant to the terms and conditions of Section 6(a).
(qq)
Restricted Stock Award Agreement
means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award
grant. Each Restricted Stock Award Agreement shall be subject to the terms and conditions of the
Plan.
(rr)
Restricted Stock Unit Award
means a right to receive shares of Common Stock which is
granted pursuant to the terms and conditions of Section 6(b).
(ss)
Restricted Stock Unit Award Agreement
means a written agreement between the Company and
a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock
Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and
conditions of the Plan.
(tt)
Rule 16b-3
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.
(uu)
Securities Act
means the Securities Act of 1933, as amended.
(vv)
Stock Appreciation Right
or
SAR
means a right to receive the appreciation on Common
Stock that is granted pursuant to the terms and conditions of Section 5.
(ww)
Stock Appreciation Right Agreement
means a written agreement between the Company and a
holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation
Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions
of the Plan.
(xx)
Stock Award
means any right to receive Common Stock granted under the Plan, including
an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted
Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock Award.
(yy)
Stock Award Agreement
means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan.
(zz)
Subsidiary
means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company,
and (ii) any partnership, limited liability company or other entity in which the Company has a
direct or indirect interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%).
24
(aaa)
Ten Percent Stockholder
means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Affiliate.
25
Exhibit 99.10
QuinStreet, Inc.
Stock Option Grant Notice
(2010 Equity Incentive Plan)
QuinStreet, Inc. (the
Company
), pursuant to its 2010 Equity Incentive Plan (the
Plan
), hereby
grants to Optionholder an option to purchase the number of shares of the Companys Common Stock set
forth below. This option is subject to all of the terms and conditions as set forth herein and in
the Option Agreement, the Plan, and the Notice of Exercise, all of which are attached hereto and
incorporated herein in their entirety.
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Optionholder:
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Date of Grant:
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Vesting Commencement Date:
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Number of Shares Subject to Option:
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Exercise Price (Per Share):
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Total Exercise Price:
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Expiration Date:
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Type of Grant:
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o
Incentive Stock Option
1
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o
Nonstatutory Stock Option
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Exercise Schedule
:
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Same as Vesting Schedule
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Vesting Schedule
:
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[
1/4
th
of the shares vest one year after the Vesting Commencement Date; the balance of the shares vest in
a series of thirty-six (36) successive equal monthly installments measured from the first anniversary of the Vesting
Commencement Date.]
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Payment:
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By one or a combination of the following items (described in the Option Agreement):
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þ
By cash or check
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þ
By bank draft or money order payable to the Company
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þ
Pursuant to a Regulation T Program if the Shares are publicly traded
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þ
By delivery of already-owned shares if the Shares are publicly traded
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þ
If and only to the extent this option is a Nonstatutory Stock Option,
and subject to the Companys consent at the time of exercise, by a net
exercise arrangement
2
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Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the
Option Agreement, and the Plan set forth the entire understanding between Optionholder and the
Company regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder by the Company, and (ii) the following agreements only:
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1
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If this is an Incentive Stock Option, it (plus other
outstanding Incentive Stock Options) cannot be first
exercisable
for more than
$100,000 in value (measured by exercise price) in any calendar year. Any
excess over $100,000 is a Nonstatutory Stock Option.
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2
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Any portion of this option intended to qualify as an
Incentive Stock Option may not be exercised by net exercise.
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Option Agreement, 2010 Equity Incentive Plan and Notice of Exercise
Attachment I
Option Agreement
QuinStreet, Inc.
2010 Equity Incentive Plan
Option Agreement
(Incentive Stock Option or Nonstatutory Stock Option)
Pursuant to your Stock Option Grant Notice (
Grant Notice
) and this Option Agreement,
QuinStreet, Inc. (the
Company
) has granted you an option under its 2010 Equity Incentive Plan
(the
Plan
) to purchase the number of shares of the Companys Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined
in this Option Agreement but defined in the Plan shall have the same definitions as in the Plan.
The details of your option are as follows:
1.
Vesting.
Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2.
Number of Shares and Exercise Price.
The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.
3.
Exercise Restriction for Non-Exempt Employees.
In the event that you are an
Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended
(
i.e.
, a
Non-Exempt Employee
), and except as otherwise provided in the Plan, you may not exercise
your option until you have completed at least six (6) months of Continuous Service measured from
the Date of Grant specified in your Grant Notice, notwithstanding any other provision of your
option.
4.
Method of Payment.
Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any one or more of the following manners
unless otherwise provided in your Grant
Notice
:
(a)
Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the
sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded, by delivery to
the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. Delivery for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall
include delivery to the Company of your attestation of ownership of such shares of Common
Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your
option by tender to the Company of Common Stock to the extent such tender would violate the
provisions of any law, regulation or agreement restricting the redemption of the Companys stock.
(c)
If the Option is a Nonstatutory Stock Option,
subject to the consent of the Company at the
time of exercise
, by a net exercise arrangement pursuant to which the Company will reduce the
number of shares of Common Stock issued upon exercise of your option by the largest whole number of
shares with a Fair Market Value that does not exceed the aggregate exercise price; provided,
however, that the Company shall accept a cash or other payment from you to the extent of any
remaining balance of the aggregate exercise price not satisfied by such reduction in the number of
whole shares to be issued; provided further, however, that shares of Common Stock will no longer be
outstanding under your option and will not be exercisable thereafter to the extent that (1) shares
are used to pay the exercise price pursuant to the net exercise, (2) shares are delivered to you
as a result of such exercise, and (3) shares are withheld to satisfy tax withholding obligations.
5.
Whole Shares.
You may exercise your option only for whole shares of Common Stock.
6.
Securities Law Compliance.
Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
7.
Term.
You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires,
subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:
(a)
immediately upon the termination of your Continuous Service for Cause;
(b)
three (3) months after the termination of your Continuous Service for any reason other
than Cause, Disability or death, provided
however,
that if during any part of such three (3) month
period your option is not exercisable solely because of the condition set forth in the section
above relating to Securities Law Compliance, your option shall not expire until the earlier of
the Expiration Date or until it shall have been exercisable for an aggregate period of three (3)
months after the termination of your Continuous Service; and if (i) you are a Non-Exempt Employee,
(ii) your Continuous Service terminates within six (6) months after the Date of Grant specified in
your Grant Notice, and (iii) you have vested in a portion of your option at the time of your
termination of Continuous Service, your option shall not expire until the earlier of (x) the later
of (A) the date that is seven (7) months after the Date of Grant specified in your
Grant Notice or (B) the date that is three (3) months after the termination of your Continuous
Service, or (y) the Expiration Date;
(c)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(d)
eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates for any reason other than Cause;
(e)
the Expiration Date indicated in your Grant Notice; or
(f)
the day before the tenth (10th) anniversary of the Date of Grant.
If your option is an Incentive Stock Option, note that to obtain the federal income tax
advantages associated with an Incentive Stock Option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
options exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or Disability. The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee that your option will necessarily
be treated as an Incentive Stock Option if you continue to provide services to the Company or an
Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise
your option more than three (3) months after the date your employment with the Company or an
Affiliate terminates.
8.
Exercise.
(a)
You may exercise the vested portion of your option during its term by delivering a Notice
of Exercise (in a form designated by the Company) together with the exercise price to the Secretary
of the Company, or to such other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may then require.
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of
your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock
acquired upon such exercise.
(c)
If your option is an Incentive Stock Option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
9.
Transferability.
(a)
If your option is an Incentive Stock Option, your option is generally not transferable,
except (1) by will or by the laws of descent and distribution or (2) pursuant to a domestic
relations order (provided that such Incentive Stock Option may be deemed to be a Nonstatutory Stock
Option as a result of such transfer), and is exercisable during your life only by you.
Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory
to the Company, you may designate a third party who, in the event of your death, shall thereafter
be entitled to exercise your option. In addition, you may transfer your option to a trust if you
are considered to be the sole beneficial owner (determined under Section 671 of the Code and
applicable state law) while the option is held in the trust, provided that you and the trustee
enter into transfer and other agreements required by the Company.
(b)
If your option is a Nonstatutory Stock Option, your option is not transferable, except (1)
by will or by the laws of descent and distribution, (2) pursuant to a domestic relations order, (3)
with the prior written approval of the Company, by instrument to an inter vivos or testamentary
trust, in a form accepted by the Company, in which the option is to be passed to beneficiaries upon
the death of the trustor (settlor) and (4) with the prior written approval of the Company, by gift,
in a form accepted by the Company, to a permitted transferee under Rule 701 of the Securities Act.
10.
Option not a Service Contract.
Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
11.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
(b)
Upon your request and subject to approval by the Company, in its sole discretion, and in
compliance with any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid classification of your option as a liability for
financial accounting purposes). If the date of determination of any tax withholding obligation is
deferred to a date later than the date of
exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share withholding procedure shall
be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock unless such obligations are satisfied.
12.
Tax Consequences
. You hereby agree that the Company does not have a duty to
design or administer the Plan or its other compensation programs in a manner that minimizes your
tax liabilities. You shall not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your
other compensation. In particular, you acknowledge that this option is exempt from Section 409A of
the Code only if the exercise price per share specified in the Grant Notice is at least equal to
the fair market value per share of the Common Stock on the Date of Grant and there is no other
impermissible deferral of compensation associated with the option.
13.
Notices.
Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
14.
Governing Plan Document.
Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
Attachment II
2010 Equity Incentive Plan
Attachment III
Notice of Exercise
Notice of Exercise
2010 Equity Incentive Plan
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QuinStreet, Inc.
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[
]
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[
]
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Date of Exercise:
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Type of option (check one):
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Incentive
o
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Nonstatutory
o
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Shares to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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$
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Regulation T Program (cashless exercise)
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$
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Value of ________ already-owned shares of
QuinStreet, Inc. common
stock delivered herewith
3
:
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$
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3
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Shares must meet the public trading requirements set
forth in the option. Shares must be valued on the date of exercise in
accordance with the terms of the 2010 Equity Incentive Plan and the option
being exercised and must be owned free and clear of any liens, claims,
encumbrances or security interests. Certificates must be endorsed or
accompanied by an executed assignment separate from certificate.
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Value of
shares of
QuinStreet, Inc. common
stock pursuant to net exercise
4
:
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$
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 2010 Equity Incentive Plan (ii) to provide for the payment by me to you (in the
manner designated by you) of your withholding obligation, if any, relating to the exercise of this
option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing
within fifteen (15) days after the date of any disposition of any of the shares of Common Stock
issued upon exercise of this option that occurs within two (2) years after the date of grant of
this option or within one (1) year after such shares of Common Stock are issued upon exercise of
this option.
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4
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QuinStreet, Inc. must have established net exercise
procedures at the time of exercise in order to utilize this payment method and
must expressly consent to your use of net exercise at the time of exercise. An
Incentive Stock Option may not be exercised by a net exercise arrangement.
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Exhibit 99.11
QuinStreet, Inc.
Senior Management Stock Option Grant Notice
(2010 Equity Incentive Plan)
QuinStreet, Inc. (the
Company
), pursuant to its 2010 Equity Incentive Plan (the
Plan
), hereby
grants to Optionholder an option to purchase the number of shares of the Companys Common Stock set
forth below. This option is subject to all of the terms and conditions as set forth herein and in
the Option Agreement, the Plan, and the Notice of Exercise, all of which are attached hereto and
incorporated herein in their entirety.
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Optionholder:
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Date of Grant:
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Vesting Commencement Date:
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Number of Shares Subject to Option:
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Exercise Price (Per Share):
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Total Exercise Price:
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Expiration Date:
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Type of Grant:
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o
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Incentive Stock Option
1
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o
Nonstatutory Stock Option
|
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Exercise Schedule
:
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Same as Vesting Schedule
|
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Vesting Schedule
:
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[
1/4
th
of the shares vest one year after the Vesting Commencement Date; the balance of the shares vest in
a series of thirty-six (36) successive equal monthly installments measured from the first anniversary of the Vesting
Commencement Date, subject to accelerated vesting under specified circumstances as provided in the Option Agreement
and Plan.]
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Payment:
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By one or a combination of the following items (described in the Option Agreement):
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þ
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By cash or check
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þ
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By bank draft or money order payable to the Company
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þ
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Pursuant to a Regulation T Program if the Shares are publicly traded
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þ
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By delivery of already-owned shares if the Shares are publicly traded
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þ
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If and only to the extent this option is a Nonstatutory Stock Option,
and subject to the Companys consent at the time of exercise, by a net
exercise arrangement
2
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Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the
Option Agreement, and the Plan set forth the entire understanding between Optionholder and the
Company regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder by the Company, and (ii) the following agreements only:
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1
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If this is an Incentive Stock Option, it (plus other
outstanding Incentive Stock Options) cannot be first
exercisable
for more than
$100,000 in value (measured by exercise price) in any calendar year. Any
excess over $100,000 is a Nonstatutory Stock Option.
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2
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Any portion of this option intended to qualify as an
Incentive Stock Option may not be exercised by net exercise.
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Option Agreement, 2010 Equity Incentive Plan and Notice of Exercise
Attachment I
Option Agreement
QuinStreet, Inc.
2010 Equity Incentive Plan
Option Agreement for Senior Management
(Incentive Stock Option or Nonstatutory Stock Option)
Pursuant to your Stock Option Grant Notice (
Grant Notice
) and this Option Agreement,
QuinStreet, Inc. (the
Company
) has granted you an option under its 2010 Equity Incentive Plan
(the
Plan
) to purchase the number of shares of the Companys Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined
in this Option Agreement but defined in the Plan shall have the same definitions as in the Plan.
The details of your option are as follows:
1.
Vesting.
Subject to the limitations contained herein and the potential vesting
acceleration provisions set forth in Section 9 hereof, your option will vest as provided in your
Grant Notice, provided that vesting will cease upon the termination of your Continuous Service.
2.
Number of Shares and Exercise Price.
The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.
3.
Method of Payment.
Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any one or more of the following manners
unless otherwise provided in your Grant
Notice
:
(a)
Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the
sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded, by delivery to
the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. Delivery for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
(c)
If the Option is a Nonstatutory Stock Option,
subject to the consent of the Company at the
time of exercise
, by a net exercise arrangement pursuant to which the Company will reduce the
number of shares of Common Stock issued upon exercise of your option by the largest whole number of
shares with a Fair Market Value that does not exceed the aggregate exercise price; provided,
however, that the Company shall accept a cash or other payment from you to the extent of any
remaining balance of the aggregate exercise price not satisfied by such reduction in the number of
whole shares to be issued; provided further, however, that shares of Common Stock will no longer be
outstanding under your option and will not be exercisable thereafter to the extent that (1) shares
are used to pay the exercise price pursuant to the net exercise, (2) shares are delivered to you
as a result of such exercise, and (3) shares are withheld to satisfy tax withholding obligations.
4.
Whole Shares.
You may exercise your option only for whole shares of Common Stock.
5.
Securities Law Compliance.
Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
6.
Term.
You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires,
subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:
(a)
immediately upon the termination of your Continuous Service for Cause;
(b)
three (3) months after the termination of your Continuous Service for any reason other
than Cause, Disability or death, provided
however,
that if during any part of such three (3) month
period your option is not exercisable solely because of the condition set forth in the section
above relating to Securities Law Compliance, your option shall not expire until the earlier of
the Expiration Date or until it shall have been exercisable for an aggregate period of three (3)
months after the termination of your Continuous Service
(c)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(d)
eighteen (18) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates for any reason other than Cause;
(e)
the Expiration Date indicated in your Grant Notice; or
(f)
the day before the tenth (10th) anniversary of the Date of Grant.
If your option is an Incentive Stock Option, note that to obtain the federal income tax
advantages associated with an Incentive Stock Option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
options exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or Disability. The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee that your option will necessarily
be treated as an Incentive Stock Option if you continue to provide services to the Company or an
Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise
your option more than three (3) months after the date your employment with the Company or an
Affiliate terminates.
7.
Exercise.
(a)
You may exercise the vested portion of your option during its term by delivering a Notice
of Exercise (in a form designated by the Company) together with the exercise price to the Secretary
of the Company, or to such other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may then require.
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of
your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock
acquired upon such exercise.
(c)
If your option is an Incentive Stock Option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
8.
Transferability.
(a)
If your option is an Incentive Stock Option, your option is generally not transferable,
except (1) by will or by the laws of descent and distribution or (2) pursuant to a domestic
relations order (provided that such Incentive Stock Option may be deemed to be a Nonstatutory Stock
Option as a result of such transfer), and is exercisable during your life only by you.
Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory
to the Company, you may designate a third party who, in the event of your death, shall thereafter
be entitled to exercise your option. In addition, you may transfer your option to a trust if you
are considered to be the sole beneficial owner (determined under Section 671 of the Code and
applicable state law) while the option is held in the trust, provided that you and the trustee
enter into transfer and other agreements required by the Company.
(b)
If your option is a Nonstatutory Stock Option, your option is not transferable, except (1)
by will or by the laws of descent and distribution, (2) pursuant to a
domestic relations order, (3) with the prior written approval of the Company, by instrument to
an inter vivos or testamentary trust, in a form accepted by the Company, in which the option is to
be passed to beneficiaries upon the death of the trustor (settlor) and (4) with the prior written
approval of the Company, by gift, in a form accepted by the Company, to a permitted transferee
under Rule 701 of the Securities Act.
9.
Involuntary Termination Following a Change In Control.
(a)
If a Change in Control occurs and as of, or within six months after, the effective time of
such Change in Control your Continuous Service terminates due to an involuntary termination (not
including death or Disability) without Cause or due to a voluntary termination which is a
Resignation for Good Reason (as defined below), then, as of the date of termination of Continuous
Service, twenty-five percent (25%) of the portion of your option subject to vesting that is
unvested on the effective date of such termination will vest and become exercisable immediately
upon such termination.
(b)
"
Resignation for Good Reason
means that you voluntarily terminate employment after any of
the following are undertaken without your express written consent:
(i)
the assignment to you of any duties or responsibilities that results in a significant
diminution in your employment role in the Company as in effect immediately prior to the effective
date of the Change in Control;
provided, however,
that mere changes in your title or reporting
relationships alone shall not constitute a basis for Resignation for Good Reason;
(ii)
a greater than five percent (5%) aggregate reduction by the Company in your annual base
salary, as in effect on the effective date of the Change in Control or as increased thereafter;
provided, however,
that if there are across-the-board proportionate salary reductions for all
officers, management-level and other salaried employees due to the financial condition of the
Company, a greater than ten percent (10%) aggregate reduction by the Company in your annual base
salary will be required;
(iii)
any failure by the Company to continue in effect any benefit plan or program, including
fringe benefits, incentive plans and plans with respect to the receipt of securities of the
Company, in which you are participating immediately prior to the effective date of the Change in
Control (hereinafter referred to as Benefit Plans), or the taking of any action by the Company
that would adversely affect your participation in or reduce your benefits under the Benefit Plans;
provided, however
, that a basis for Resignation for Good Reason shall not exist under this clause
(c) following a Change in Control if the Company offers a range of benefit plans and programs that,
taken as a whole, is comparable to the Benefit Plans; or
(iv)
a non-temporary relocation of your business office to a location more than fifty (50)
miles from the location at which you perform duties as of the effective date of the Change in
Control, except for required travel by you on the Companys business to an extent substantially
consistent with your business travel obligations prior to the Change in Control.
(c)
If any payment or benefit you 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, 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 your 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: reduction of cash payments; cancellation of accelerated vesting of Stock Awards;
reduction of employee benefits. In the event that acceleration of vesting of Stock Award
compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order
of the date of grant of your Stock Awards (
i.e.
, earliest granted Stock Award cancelled last).
The accounting firm engaged by the Company for general audit purposes as of the day prior to
the effective date of the Change in Control shall perform the foregoing calculations. If the
accounting firm so engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. 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 you and the Company within
fifteen (15) calendar days after the date on which your right to a Payment is triggered (if
requested at that time by you or the Company) or such other time as requested by you 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 you and the
Company with an opinion reasonably acceptable to you 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 you and the Company.
10.
Option not a Service Contract.
Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
11.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
(b)
Upon your request and subject to approval by the Company, in its sole discretion, and in
compliance with any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid classification of your option as a liability for
financial accounting purposes). If the date of determination of any tax withholding obligation is
deferred to a date later than the date of exercise of your option, share withholding pursuant to
the preceding sentence shall not be permitted unless you make a proper and timely election under
Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred, to accelerate the
determination of such tax withholding obligation to the date of exercise of your option.
Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from
fully vested shares of Common Stock determined as of the date of exercise of your option that are
otherwise issuable to you upon such exercise. Any adverse consequences to you arising in
connection with such share withholding procedure shall be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock unless such obligations are satisfied.
12.
Tax Consequences
. You hereby agree that the Company does not have a duty to
design or administer the Plan or its other compensation programs in a manner that minimizes your
tax liabilities. You shall not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your
other compensation. In particular, you acknowledge that this option is exempt from Section 409A of
the Code only if the exercise price per share specified in the Grant Notice is at least equal to
the fair market value per share of the Common Stock on the Date of Grant and there is no other
impermissible deferral of compensation associated with the option.
13.
Notices.
Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
14.
Governing Plan Document.
Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
Attachment II
2010 Equity Incentive Plan
Attachment III
Notice of Exercise
Notice of Exercise
2010 Equity Incentive Plan
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QuinStreet, Inc.
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[
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[
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Date of Exercise:
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Type of option (check one):
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Incentive
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Nonstatutory
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Shares to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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$
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Regulation T Program (cashless exercise)
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$
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Value of
already-owned shares of
QuinStreet, Inc. common
stock delivered herewith
3
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$
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Shares must meet the public trading requirements set
forth in the option. Shares must be valued on the date of exercise in
accordance with the terms of the 2010 Equity Incentive Plan and the option
being exercised and must be owned free and clear of any liens, claims,
encumbrances or security interests. Certificates must be endorsed or
accompanied by an executed assignment separate from certificate.
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Value of
shares of
QuinStreet, Inc. common
stock pursuant to net exercise
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$
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 2010 Equity Incentive Plan (ii) to provide for the payment by me to you (in the
manner designated by you) of your withholding obligation, if any, relating to the exercise of this
option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing
within fifteen (15) days after the date of any disposition of any of the shares of Common Stock
issued upon exercise of this option that occurs within two (2) years after the date of grant of
this option or within one (1) year after such shares of Common Stock are issued upon exercise of
this option.
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QuinStreet, Inc. must have established net exercise
procedures at the time of exercise in order to utilize this payment method and
must expressly consent to your use of net exercise at the time of exercise. An
Incentive Stock Option may not be exercised by a net exercise arrangement.
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Exhibit 99.12
QuinStreet, Inc.
2010 Non-Employee Directors Stock Award Plan
Adopted by the Board of Directors: November 17, 2009
Amended by the Compensation
Committee: January 11, 2010
Approved by the
Stockholders: January 22, 2010
1.
General.
(a) Eligible Stock Award Recipients.
The persons eligible to receive Stock Awards are the
Non-Employee Directors of the Company.
(b) Available Stock Awards.
The Plan provides for the grant of Nonstatutory Stock Options and
Restricted Stock Unit Awards.
(c) Purpose.
The Company, by means of the Plan, seeks to retain the services of its
Non-Employee Directors, to secure and retain the services of new Non-Employee Directors and to
provide incentives for such persons to exert maximum efforts for the success of the Company and any
Affiliate by giving them an opportunity to benefit from increases in value of the Common Stock
through the granting of Stock Awards.
2.
Administration.
(a) Administration by Board.
The Board shall administer the Plan unless and until the Board
delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c).
(b) Powers of Board.
The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i)
With respect to Stock Awards issues pursuant to Sections 5(a) and 5(b), to determine the
provisions of each Stock Award to the extent not specified in the Plan.
(ii)
With respect to Stock Awards issued pursuant to Section 5(d), to determine from time to
time (A) which of the persons eligible under the Plan shall be granted Stock Awards; (B) when and
how each Stock Award shall be granted; (C) what type or combination of types of Stock Awards shall
be granted; (D) the provisions of each Stock Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive cash or Common Stock pursuant to a
Stock Award; (E) the number of shares of Common Stock with respect to which a Stock Award shall be
granted to each such person; and (F) the Fair Market Value applicable to a Stock Award.
(iii)
To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
1
(iv)
To effect, at any time and from time to time, with the consent of any adversely affected
Participant, (A) the reduction of the exercise price (or strike price) of any outstanding Option
under the Plan; (B) the cancellation of any outstanding Option under the Plan and the grant in
substitution therefor of (1) a new Option under the Plan or another equity plan of the Company
covering the same or a different number of shares of Common Stock, (2) a Restricted Stock Unit
Award, (3) cash and/or (4) other valuable consideration (as determined by the Board, in its sole
discretion); or (C) any other action that is treated as a repricing under generally accepted
accounting principles.
(v)
To amend the Plan or a Stock Award as provided in Section 11.
(vi)
To terminate or suspend the Plan as provided in Section 12.
(vii)
Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company and that are not in conflict with the
provisions of the Plan.
(c) Delegation to Committee.
(i)
The Board may delegate some or all of the administration of the Plan to a Committee or
Committees. If administration of the Plan is delegated to a Committee, the Committee shall have,
in connection with the administration of the Plan, the powers theretofore possessed by the Board
that have been delegated to the Committee, including the power to delegate to a subcommittee of the
Committee any of the administrative powers the Committee is authorized to exercise (and references
in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however,
to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time
to time by the Board. The Board may retain the authority to concurrently administer the Plan with
the Committee and may, at any time, revest in the Board some or all of the powers previously
delegated.
(ii) Rule 16b-3 Compliance.
The Committee may consist solely of two or more Non-Employee
Directors, in accordance with Rule 16b-3.
(d) Effect of Boards Decision.
All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.
3.
Shares Subject to the Plan.
(a) Share Reserve.
Subject to Section 10(a) relating to Capitalization Adjustments, the
aggregate number of shares of Common Stock of the Company that may be issued pursuant to Stock
Awards after the Effective Date shall not exceed three hundred thousand (300,000) shares, plus an
annual increase to be added on July 1st of each year for a period of nine years commencing on July
1, 2010 and ending on (and including) July 1, 2019, in an amount equal to the sum of (i) two
hundred thousand (200,000) shares; plus (ii) the aggregate number of shares of Common Stock subject
to Stock Awards granted pursuant to Section 5 of Plan during the immediately preceding fiscal year.
Notwithstanding the foregoing, the Board may act prior to the first day of any fiscal year, to
provide that there shall be no increase in the share reserve for
2
such fiscal year or that the increase in the share reserve for such fiscal year shall be a
lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding
sentence. For clarity, the limitation in this Section 3(a) is a limitation in the number of shares
of Common Stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not
limit the granting of Stock Awards except as provided in Section 8(a). Shares may be issued in
connection with a merger or acquisition as permitted by, as applicable, NASDAQ Marketplace
Rule 4350(i)(1)(A)(iii), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711
or other applicable stock exchange rules, and such issuance shall not reduce the number of shares
available for issuance under the Plan. Furthermore, if a Stock Award or any portion thereof (i)
expires or otherwise terminates without all of the shares covered by such Stock Award having been
issued or (ii) is settled in cash (
i.e.
, the Participant receives cash rather than stock), such
expiration, termination or settlement shall not reduce (or otherwise offset) the number of shares
Common Stock that may be available for issuance under the Plan.
(b) Reversion of Shares to the Share Reserve.
If any shares of Common Stock issued pursuant
to a Stock Award are forfeited back to the Company because of the failure to meet a contingency or
condition required to vest such shares in the Participant, then the shares that are forfeited shall
revert to and again become available for issuance under the Plan. Any shares reacquired by the
Company pursuant to Section 9(e) or as consideration for the exercise of a Stock Award shall again
become available for issuance under the Plan.
(c) Source of Shares.
The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the Company on the open market
or otherwise.
4.
Eligibility.
The Initial and Annual Grants as set forth in Sections 5(a) and 5(b) automatically shall be
granted under the Plan to all Non-Employee Directors who meet the specified criteria. Stock Awards
may also be granted to Non-Employee Directors as discretionary grants as set forth in Section 5(d).
5.
Non-Discretionary and Discretionary Grants.
(a) Initial Grants.
Without any further action of the Board, each person who after the IPO
Date is elected or appointed for the first time to be a Non-Employee Director automatically shall,
upon the date of his or her initial election or appointment to be a Non-Employee Director, be
granted an Option (the
Initial Grant
) to
purchase 20,000 shares of Common Stock on the
terms and conditions set forth herein.
(b) Annual Grants.
Without any further action of the Board, on the date of each Annual
Meeting, commencing with the first Annual Meeting following the IPO Date, each person who is then a
Non-Employee Director automatically shall be granted an Option (the
Annual Grant
) to purchase 20,000 shares of
Common Stock on the terms and conditions set forth herein.
3
(c) Determination of Initial and Annual Grants.
The Board may, at any time, provide for
Initial and Annual Grants covering a number of shares of Common Stock different than those numbers
designated in Sections 5(a) and 5(b), respectively, and may provide that some or all of such grants
may instead be in the form of Restricted Stock Unit Awards described in Section 7. If the Board
does not make such a determination, all Initial and Annual Grants shall be for the number of shares
of Common Stock designated in Section 5(a) and 5(b), respectively and in the form of Options
described in Section 6.
(d) Discretionary Grants.
In addition to non-discretionary grants pursuant to Sections 5(a)
and 5(b), the Board, in its sole discretion, may grant Stock Awards to one or more Non-Employee
Directors in such numbers and subject to such other provisions as it shall determine. The numbers
and other provisions of such Stock Awards need not be identical.
6.
Option Provisions.
Each Option shall be in such form and shall contain such terms and conditions as required by
the Plan. Each Option shall contain such additional terms and conditions, not inconsistent with
the Plan, as the Board shall deem appropriate. Each Option shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the substance of each of the following
provisions:
(a) Term.
No Option shall be exercisable after the expiration of ten (10) years from the
date of its grant or such shorter period specified in the applicable Option Agreement.
(b) Exercise Price.
The exercise price of each Option shall be one hundred percent (100%) of
the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted.
(c) Purchase Price.
The purchase price of Common Stock acquired pursuant to the exercise of
an Option shall be paid, to the extent permitted by applicable law, by any combination of the
following methods of payment:
(i)
by cash, check, bank draft or money order payable to the Company;
(ii)
to the extent permitted by law, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the
Option, results in either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from the sales
proceeds;
(iii)
by delivery to the Company (either by actual delivery or attestation) of shares of
Common Stock; or
(iv)
by a net exercise arrangement pursuant to which the Company will reduce the number of
shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair
Market Value that does not exceed the aggregate exercise price;
provided, however
, that the Company
shall accept a cash or other payment from the Participant to the extent of any remaining balance of
the aggregate exercise price not satisfied by such
4
reduction in the number of whole shares to be issued;
provided, further,
that shares of Common
Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent
that (A) shares issuable upon exercise are reduced to pay the exercise price pursuant to the net
exercise, (B) shares are delivered to the Participant as a result of such exercise, and (C) shares
are withheld to satisfy tax withholding obligations.
(d) Transferability.
An Option shall not be transferable except by will or by the laws of
descent and distribution and to such further extent as permitted by the Rule as to Use of Form S-8
specified in the General Instructions of the Form S-8 Registration Statement under the Securities
Act, and shall be exercisable during the lifetime of the Participant only by the Participant.
Notwithstanding the foregoing, the Participant may, by delivering written notice to the Company, in
a form satisfactory to the Company, designate a third party who, in the event of the death of the
Participant, shall thereafter be entitled to exercise the Option.
(e) Vesting Generally.
Options shall vest as follows:
(i) Initial
Grant
. The Initial Grant shall vest in a series of forty-eight (48) successive
equal monthly installments during the Participants Continuous
Service over the four (4)-year
period measured from the date of grant.
(ii) Annual Grant
. The Annual Grant shall vest in a series of twelve (12) successive equal
monthly installments during the Participants Continuous Service over the one (1)-year period
measured from the date of grant;
provided, however
that if the date of the next Annual Meeting
following the date of grant occurs prior to such one (1)-year period, any unvested portion of the
Annual Grant shall become fully vested and exercisable immediately prior to the date of such Annual
Meeting.
(iii) Discretionary Grant.
At the time of grant of an Option pursuant to Section 5(d), the
Board may impose such restrictions or conditions to the vesting of the Options as it, in its sole
discretion, deems appropriate.
(f) Termination of Continuous Service.
In the event that a Participants Continuous Service
terminates (other than upon the Participants death or Disability), the Participant may exercise
his or her Option but only within such period of time ending on the earlier of (i) the date six (6)
months following the termination of the Participants Continuous Service (or such longer or shorter
period specified in the applicable Option Agreement, which period shall not be less than 30 days),
or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after
termination of Continuous Service, the Participant does not exercise his or her Option within the
time specified herein or in the Option Agreement (as applicable), the Option shall terminate.
(g) Extension of Termination Date.
In the event that the exercise of an Option following the
termination of the Participants Continuous Service (other than upon the Participants death or
Disability) would be prohibited at any time solely because the issuance of shares of Common Stock
would violate the registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of a total period of six (6) months (that need not
be consecutive) after the termination of the Participants Continuous
5
Service during which the exercise of the Option would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option as set forth in the applicable
Option Agreement. In addition, unless otherwise provided in a Participants Option Agreement, if
the sale of any Common Stock received upon exercise of an Option following the termination of the
Participants Continuous Service would violate the Companys insider trading policy, then the
Option shall terminate on the earlier of (i) the expiration of a period equal to the applicable
post-termination exercise period after the termination of the Participants Continuous Service
during which the exercise of the Option would not be in violation of the Companys insider trading
policy, or (ii) the expiration of the term of the Option as set forth in the applicable Option
Agreement.
(h) Disability of Participant.
In the event that a Participants Continuous Service
terminates as a result of the Participants Disability, the Participant may exercise his or her
Option (to the extent that the Participant was entitled to exercise such Option as of the date of
termination of Continuous Service), but only within such period of time ending on the earlier of
(i) the date twelve (12) months following such termination of Continuous Service or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If, after termination
of Continuous Service, the Participant does not exercise his or her Option within the time
specified herein or in the Option Agreement (as applicable), the Option shall terminate.
(i) Death of Participant.
In the event that (i) a Participants Continuous Service terminates
as a result of the Participants death, or (ii) the Participant dies within the six (6) month
period after the termination of the Participants Continuous Service for a reason other than death,
then the Option may be exercised (to the extent the Participant was entitled to exercise such
Option as of the date of death) by the Participants estate, by a person who acquired the right to
exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon
the Participants death, but only within the period ending on the earlier of (i) the date
eighteen (18) months following the date of death, or (ii) the expiration of the term of such Option
as set forth in the Option Agreement. If, after the Participants death, the Option is not
exercised within the time specified herein, the Option shall terminate.
7.
Provisions of Restricted Stock Unit Awards.
Each Restricted Stock Unit Award Agreement shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. The terms and conditions of Restricted Stock
Unit Award Agreements may change from time to time, and the terms and conditions of separate
Restricted Stock Unit Award Agreements need not be identical;
provided, however
, that each
Restricted Stock Unit Award Agreement shall conform to (through incorporation of the provisions
hereof by reference in the Agreement or otherwise) the substance of each of the following
provisions:
(i) Consideration.
At the time of grant of a Restricted Stock Unit Award, the Board will
determine the consideration, if any, to be paid by the Participant upon delivery of each share of
Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by
the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid
in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and
permissible under applicable law.
6
(ii) Vesting.
At the time of the grant of a Restricted Stock Unit Award, the Board may impose
such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its
sole discretion, deems appropriate.
(iii) Payment
. A Restricted Stock Unit Award may be settled by the delivery of shares of
Common Stock, their cash equivalent, any combination thereof or in any other form of consideration,
as determined by the Board and contained in the Restricted Stock Unit Award Agreement.
(iv) Additional Restrictions.
At the time of the grant of a Restricted Stock Unit Award, the
Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery
of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award
to a time after the vesting of such Restricted Stock Unit Award.
(v) Dividend Equivalents.
Dividend equivalents may be credited in respect of shares of Common
Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend
equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock
Unit Award in such manner as determined by the Board. Any additional shares covered by the
Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all
of the same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which
they relate.
(vi) Termination of Participants Continuous Service.
Except as otherwise provided in the
applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award
that has not vested will be forfeited upon the Participants termination of Continuous Service.
8.
Covenants of the Company.
(a) Availability of Shares.
During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock reasonably required to satisfy such
Stock Awards.
(b) Securities Law Compliance.
The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however
, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained. A Participant shall not be eligible for the grant of a Stock
Award or the subsequent issuance of Common Stock pursuant to the Stock Award if such grant or
issuance would be in violation of any applicable securities law.
7
(c) No Obligation to Notify or Minimize Taxes.
The Company shall have no duty or obligation
to any Participant to advise such holder as to the time or manner of exercising such Stock Award.
Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder
of a pending termination or expiration of a Stock Award or a possible period in which the Stock
Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences
of a Stock Award to the holder of such Stock Award.
9.
Miscellaneous.
(a) Use of Proceeds from Sales of Common Stock.
Proceeds from the sale of shares of Common
Stock pursuant to Stock Awards shall constitute general funds of the Company.
(b) Stockholder Rights.
No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until (i) such Participant has satisfied all requirements for exercise of the Stock
Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to
such Stock Award has been entered into the books and records of the Company.
(c) No Service Rights.
Nothing in the Plan, any instrument executed, or Stock Award granted
pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an
Affiliate as a Non-Employee Director or shall affect the right of the Company or an Affiliate to
terminate the service of a Director pursuant to the Bylaws of the Company or an Affliate, and any
applicable provisions of the corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.
(d) Investment Assurances.
The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participants knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award, if applicable; and (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the
Participants own account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (A) the issuance of the shares upon the exercise or
acquisition of Common Stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (B) as to any particular requirement,
a determination is made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon advice of counsel
to the Company, place legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the Common Stock.
(e) Withholding Obligations.
The Participant may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of Common Stock under a Stock
8
Award by any of the following means (in addition to the Companys right to withhold from any
compensation paid to the Participant by the Company) or by a combination of such means: (i)
tendering a cash payment; (ii) authorizing the Company to withhold shares from the shares of Common
Stock issued or otherwise issuable to the Participant as a result of the exercise or acquisition of
Common Stock under the Stock Award;
provided, however
, that no shares of Common Stock are withheld
with a value exceeding the minimum amount of tax required to be withheld by law (or such lower
amount as may be necessary to avoid classification of the Stock Award as a liability for financial
accounting purposes); (iii) authorizing the Company to withhold payment from any amounts otherwise
payable to the Participant; or (iv) by such other method as may be set forth in the Stock Award
Agreement.
(f) Electronic Delivery
. Any reference herein to a written agreement or document shall
include any agreement or document delivered electronically or posted on the Companys intranet.
10.
Adjustments upon Changes in Common Stock; Other Corporate Events.
(a) Capitalization Adjustments
. In the event of a Capitalization Adjustment, the Board shall
appropriately and proportionately adjust: (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 3(a), (ii) the class(es) and number of securities for which
the nondiscretionary grants of Stock Awards are made pursuant to Section 5, and (iv) the class(es)
and number of securities and price per share of stock subject to outstanding Stock Awards. The
Board shall make such adjustments, and its determination shall be final, binding and conclusive.
(b) Dissolution or Liquidation
. In the event of a dissolution or liquidation of the Company,
all outstanding Stock Awards shall terminate immediately prior to the completion of such
dissolution or liquidation.
(c) Corporate Transaction.
In the event of a Corporate Transaction, then, notwithstanding any
other provision of the Plan, the Board shall take one or more of the following actions with respect
to Stock Awards, contingent upon the closing or completion of the Corporate Transaction:
(i)
arrange for the surviving corporation or acquiring corporation (or the surviving or
acquiring corporations parent company) to assume or continue the Stock Award or to substitute a
similar stock sward for the Stock Award (including, but not limited to, an award to acquire the
same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);
(ii)
arrange for the assignment of any reacquisition or repurchase rights held by the Company
in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or
acquiring corporation (or the surviving or acquiring corporations parent company);
(iii)
accelerate the vesting of the Stock Award (and, if applicable, the time at which the
Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction
as the Board shall determine (or, if the Board shall not determine such a date, to the
9
date that is five (5) days prior to the effective date of the Corporate Transaction), with
such Stock Award terminating if not exercised (if applicable) at or prior to the effective time of
the Corporate Transaction;
(iv)
arrange for the lapse of any reacquisition or repurchase rights held by the Company with
respect to the Stock Award;
(v)
cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not
exercised prior to the effective time of the Corporate Transaction, in exchange for such cash
consideration, if any, as the Board, in its sole discretion, may consider appropriate; and
(vi)
make a payment, in such form as may be determined by the Board equal to the excess, if
any, of (A) the value of the property the Participant would have received upon the exercise of the
Stock Award, over (B) any exercise price payable by such holder in connection with such exercise.
The Board need not take the same action or actions with respect to all Stock Awards or portions
thereof or with respect to all Participants.
(d) Change in Control.
A Stock Award may be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement
for such Stock Award or as may be provided in any other written agreement between the Company or
any Affiliate and the Participant, but in the absence of such provision, no such acceleration shall
occur.
11.
Amendment of the Plan and Stock Awards.
(a) Amendment of Plan
. Subject to the limitations, if any, of applicable law, the Board, at
any time and from time to time, may amend the Plan. However, except as provided in Section 10(a)
relating to Capitalization Adjustments, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary to satisfy applicable
law.
(b) Stockholder Approval
. The Board, in its sole discretion, may submit any other amendment
to the Plan for stockholder approval.
(c) No Impairment of Rights
. Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent
of the affected Participant, and (ii) such Participant consents in writing.
(d) Amendment of Stock Awards
. The Board, at any time and from time to time, may amend the
terms of any one or more Stock Awards;
provided, however,
that the rights under any Stock Award
shall not be impaired by any such amendment unless (i) the Company requests the consent of the
Participant, and (ii) the Participant consents in writing.
10
12.
Termination or Suspension of the Plan
(a) Plan Term
. The Board may suspend or terminate the Plan at any time. No Stock Awards may
be granted under the Plan while the Plan is suspended or after it is terminated.
(b) No Impairment of Rights
. Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the Participant.
13.
Effective Date of Plan.
The Plan shall become effective on the IPO Date, but no Stock Award shall be exercised unless
and until the Plan has been approved by the stockholders of the Company, which approval shall be
within twelve (12) months before or after the date the Plan is adopted by the Board.
14.
Choice of Law.
The law of the state of California shall govern all questions concerning the construction, validity
and interpretation of this Plan, without regard to that states conflict of laws rules.
15.
Definitions.
As used in the Plan, the following definitions shall apply to the
capitalized terms indicated below:
(a)
Affiliate
means, at the time of determination, any parent or subsidiary of the
Company as such terms are defined in Rule 405 of the Securities Act. The Board shall have the
authority to determine the time or times at which parent or subsidiary status is determined
within the foregoing definition.
(b)
Annual Grant
means an Option granted annually to all Non-Employee Directors who meet the
specified criteria pursuant to Section 5(b).
(c)
Annual Meeting
means the first annual meeting of the stockholders of the Company held
each fiscal year at which the Directors are selected.
(d)
Board
means the Board of Directors of the Company.
(e)
Capitalization Adjustment
means any change that is made in, or other events that occur
with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the
Effective Date without the receipt of consideration by the Company through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than
cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or any similar equity restructuring transaction,
as that term is used in Statement of Financial Accounting Standards No. 123 (revised).
Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall
not be treated as a Capitalization Adjustment.
(f)
Change in Control
means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
11
(i)
any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Companys
then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company directly from the Company, (B) on account of the
acquisition of securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person that acquires the Companys securities in a transaction or series of related
transactions the primary purpose of which is to obtain financing for the Company through the
issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange
Act Person (the
Subject Person
) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting securities by the
Company reducing the number of shares outstanding, provided that if a Change in Control would occur
(but for the operation of this sentence) as a result of the acquisition of voting securities by the
Company, and after such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not occurred, increases
the percentage of the then outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control shall be deemed to occur;
(ii)
there is consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly
or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%)
of the combined outstanding voting power of the surviving Entity in such merger, consolidation or
similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power
of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions as their Ownership of the outstanding voting securities
of the Company immediately prior to such transaction;
(iii)
the stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company
shall otherwise occur, except for a liquidation into a parent corporation;
(iv)
there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are Owned by stockholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of the Company
immediately prior to such sale, lease, license or other disposition; or
(v)
individuals who, on the date the Plan is adopted by the Board, are members of the Board
(the
Incumbent Board
) cease for any reason to constitute at least a majority of the members of
the Board;
provided, however
, that if the appointment or election (or nomination for election) of
any new Board member was approved or recommended by a majority
12
vote of the members of the Incumbent Board then still in office, such new member shall, for
purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in
Control shall not include a sale of assets, merger or other transaction effected exclusively for
the purpose of changing the domicile of the Company, and (B) the definition of Change in Control
(or any analogous term) in an individual written agreement between the Company or any Affiliate and
the Participant shall supersede the foregoing definition with respect to Stock Awards subject to
such agreement;
provided, however
, that if no definition of Change in Control or any analogous term
is set forth in such an individual written agreement, the foregoing definition shall apply.
In the event that a Change in Control affects any Stock Award that is deferred, then Change
in Control shall conform to the definition of Change of Control under Section 409A of the Code, as
amended, and the Treasury Department or Internal Revenue Service Regulations or Guidance issued
thereunder.
(g)
Code
means the Internal Revenue Code of 1986, as amended, including any applicable
regulations and guidance thereunder.
(h)
Committee
means a committee of one or more Directors to whom authority has been delegated
by the Board in accordance with Section 2(c).
(i)
Common Stock
means the common stock of the Company.
(j)
Company
means QuinStreet, Inc., a Delaware corporation.
(k)
Consultant
means any person, including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is compensated for such services, or
(ii) serving as a member of the board of directors of an Affiliate and is compensated for such
services. However, service solely as a Director, or payment of a fee for such service, shall not
cause a Director to be considered a Consultant for purposes of the Plan. Notwithstanding the
foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration
Statement under the Securities Act is available to register either the offer or the sale of the
Companys securities to such person.
(l)
Continuous Service
means that the Participants service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or an Affiliate as
an Employee, Consultant or Director or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the Participants service
with the Company or an Affiliate, shall not terminate a Participants Continuous Service;
provided,
however,
if the Entity for which a Participant is rendering services ceases to qualify as an
Affiliate, as determined by the Board, in its sole discretion, such Participants Continuous
Service shall be considered to have terminated on the date such Entity ceases to qualify as an
Affiliate. To the extent permitted by law, the Board, in that partys sole discretion, may
determine whether Continuous Service shall be considered interrupted in the case of (i) any leave
13
of absence approved by the Board, including sick leave, military leave or any other personal
leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding
the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in
a Stock Award only to such extent as may be provided in the Companys leave of absence policy, in
the written terms of any leave of absence agreement or policy applicable to the Participant, or as
otherwise required by law.
(m)
Corporate Transaction
means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
(i)
the consummation of a sale or other disposition of all or substantially all, as determined
by the Board, in its sole discretion, of the consolidated assets of the Company and its
Subsidiaries;
(ii)
the consummation of a sale or other disposition of at least ninety percent (90%) of the
outstanding securities of the Company;
(iii)
the consummation of a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or
(iv)
the consummation of a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of
the merger, consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise.
(n)
Director
means a member of the Board.
(o)
Disability
means, with respect to a Participant, the inability of such Participant to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months, as provided in Sections
22(e)(3) and 409A(a)(2)(c)(i) of the Code.
(p)
Effective Date
means the effective date of this Plan document, as set forth in Section
13.
(q)
Employee
means any person employed by the Company or an Affiliate. However, service
solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an Employee for purposes of the Plan.
(r)
Entity
means a corporation, partnership, limited liability company or other entity.
(s)
Exchange Act
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
14
(t)
Exchange Act Person
means any natural person, Entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that Exchange Act Person shall not include
(i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or
any Subsidiary of the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter
temporarily holding securities pursuant to a registered public offering of such securities, (iv) an
Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or
group (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the
Effective Date, is the Owner, directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Companys then outstanding
securities.
(u)
Fair Market Value
means, as of any date, the value of the Common Stock determined as
follows:
(i)
If the Common Stock is listed on any established stock exchange or traded on any
established market, the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the date of determination, as reported in a
source the Board deems reliable.
(ii)
Unless otherwise provided by the Board, if there is no closing sales price for the Common
Stock on the date of determination, then the Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation exists.
(iii)
In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of
the Code.
(v)
Initial Grant
means an Option granted to a Non-Employee Director who meets the specified
criteria pursuant to Section 5(a).
(w)
IPO Date
means the date of the underwriting agreement between the Company and the
underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the
Common Stock is priced for the initial public offering.
(x)
Non-Employee Director
means a Director who is not an Employee.
(y)
Nonstatutory Stock Option
means an Option not intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(z)
Officer
means a person who is an officer of the Company within the meaning of Section 16
of the Exchange Act.
(aa)
Option
means a Nonstatutory Stock Option to purchase shares of Common Stock granted
pursuant to Section 6 of the Plan.
15
(bb)
Option Agreement
means a written agreement between the Company and a Participant
evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.
(cc)
Own,
Owned,
Owner,
Ownership
A person or Entity shall be deemed to Own, to
have Owned, to be the Owner of, or to have acquired Ownership of securities if such person or
Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities.
(dd)
Participant
means a Non-Employee Director to whom a Stock Award is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Stock Award.
(ee)
Plan
means this QuinStreet, Inc. 2010 Non-Employee Directors Stock Award Plan.
(ff)
Restricted Stock Unit Award
means a right to receive shares of Common Stock which is
granted pursuant to the terms and conditions of Section 7.
(gg)
Restricted Stock Unit Award Agreement
means a written agreement between the Company and
a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock
Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and
conditions of the Plan.
(hh)
Rule 16b-3
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.
(ii)
Securities Act
means the Securities Act of 1933, as amended.
(jj)
Stock Award
means the right to receive Common Stock granted under the Plan, pursuant to
a Nonstatutory Stock Option or a Restricted Stock Unit Award.
(kk)
Stock Award Agreement
means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan.
(ll)
Subsidiary
means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company,
and (ii) any partnership, limited liability company or other entity in which the Company has a
direct or indirect interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%).
16
Exhibit 99.13
QuinStreet, Inc.
Stock Option Grant Notice
Initial Grant
(2010 Non-Employee Directors Stock Award Plan)
QuinStreet, Inc. (the
Company
), pursuant to its 2010 Non-Employee Directors Stock Award Plan
(the
Plan
), hereby grants to Optionholder an option to purchase the number of shares of the
Companys Common Stock set forth below. This option is subject to all of the terms and conditions
as set forth herein and in the Option Agreement, the Plan, and the Notice of Exercise, all of which
are attached hereto and incorporated herein in their entirety.
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Optionholder:
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Date of Grant:
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Vesting Commencement Date:
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Number of Shares Subject to Option:
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Exercise Price (Per Share):
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Total Exercise Price:
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Expiration Date:
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Type of Grant:
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Nonstatutory Stock Option
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Exercise Schedule
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Same as Vesting Schedule
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Vesting Schedule
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1/36
th
of the shares vest each month following the Date of Grant, subject to accelerated vesting under
specified circumstances as provided in the Option Agreement and Plan.
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Payment:
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By one or a combination of the following items (described in the Option Agreement):
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þ
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By cash or check
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þ
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By bank draft or money order payable to the Company
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Pursuant to a Regulation T Program if the Shares are publicly traded
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þ
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By delivery of already-owned shares if the Shares are publicly traded
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þ
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Subject to the Companys consent at the time of exercise, by a net
exercise arrangement
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Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the
Option Agreement, and the Plan set forth the entire understanding between Optionholder and the
Company regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder by the Company, and (ii) the following agreements only:
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Option Agreement, 2010 Non-Employee Directors Stock Award Plan and Notice
of Exercise
Attachment I
Option Agreement
QuinStreet, Inc.
2010 Non-Employee Directors Stock Award Plan
Option Agreement
(Nonstatutory Stock Option)
Pursuant to your Stock Option Grant Notice (
Grant Notice
) and this Option Agreement,
QuinStreet, Inc. (the
Company
) has granted you an option under its 2010 Non-Employee Directors
Stock Award Plan (the
Plan
) to purchase the number of shares of the Companys Common Stock
indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms
not explicitly defined in this Option Agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1.
Vesting.
Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service. In addition, if the Company is subject to a Change in Control before your
Continuous Service terminates, then all of the unvested shares subject to this option shall become
fully vested and exercisable immediately prior to the effective date of such Change in Control.
2.
Number of Shares and Exercise Price.
The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.
3.
Method of Payment.
Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any one or more of the following manners
unless otherwise provided in your Grant
Notice
:
(a)
Provided that at the time of exercise the Common Stock is publicly traded and to the
extent permitted by law, pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of
cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded, by delivery to
the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. Delivery for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
(c)
Subject to the consent of the Company at the time of exercise
, by a net exercise
arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued
upon exercise of your option by the largest whole number of shares with a Fair Market Value that
does not exceed the aggregate exercise price; provided, however, that the Company shall accept a
cash or other payment from you to the extent of any remaining balance of the aggregate exercise
price not satisfied by such reduction in the number of whole shares to be issued; provided further,
however, that shares of Common Stock will no longer be outstanding under your option and will not
be exercisable thereafter to the extent that (1) shares are used to pay the exercise price pursuant
to the net exercise, (2) shares are delivered to you as a result of such exercise, and (3) shares
are withheld to satisfy tax withholding obligations.
4.
Whole Shares.
You may exercise your option only for whole shares of Common Stock.
5.
Securities Law Compliance.
Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
6.
Term.
You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires,
subject to the provisions of Section 6(g) of the Plan, upon the earliest of the following:
(a)
six (6) months after the termination of your Continuous Service for any reason other than
Disability, death, provided
however,
that if during any part of such six (6) month period your
option is not exercisable solely because of the condition set forth in the section above relating
to Securities Law Compliance, your option shall not expire until the earlier of the Expiration
Date or until it shall have been exercisable for an aggregate period of six (6) months after the
termination of your Continuous Service;
(b)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c)
eighteen (18) months after your death if you die either during your Continuous Service or
within six (6) months after your Continuous Service terminates;
(d)
the Expiration Date indicated in your Grant Notice; or
(e)
the day before the tenth (10th) anniversary of the Date of Grant.
Notwithstanding the foregoing, if your sale, within the applicable time periods set forth in
Section 6, of the shares acquired upon exercise of your Option would subject you to suit under
Section 16(b) of the Exchange Act, your Option shall remain exercisable until the earlier of
(i) the expiration of a period of ten (10) days after the date on which a sale of the shares by you
would no longer be subject to such suit, (ii) the expiration of the one hundred and ninetieth
(190th) day after your termination of Continuous Service, or (iii) the Expiration Date indicated in
your Grant Notice.
7.
Exercise.
(a)
You may exercise the vested portion of your option during its term by delivering a Notice
of Exercise (in a form designated by the Company) together with the exercise price to the Secretary
of the Company, or to such other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may then require.
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of
your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock
acquired upon such exercise.
8.
Transferability.
Your option is not transferable, except (1) by will or by the
laws of descent and distribution, (2) with the prior written approval of the Company, by instrument
to an inter vivos or testamentary trust, in a form accepted by the Company, in which the option is
to be passed to beneficiaries upon the death of the trustor (settlor) and (3) with the prior
written approval of the Company, by gift, in a form accepted by the Company, to a permitted
transferee under Rule 701 of the Securities Act.
9.
Option not a Service Contract.
Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
10.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
(b)
The Company may, in its sole discretion, and in compliance with any applicable conditions
or restrictions of law, withhold from fully vested shares of Common Stock otherwise issuable to you
upon the exercise of your option a number of whole shares of Common Stock having a Fair Market
Value, determined by the Company as of the date of exercise, not in
excess of the minimum amount of tax required to be withheld by law (or such lower amount as
may be necessary to avoid classification of your option as a liability for financial accounting
purposes). Any adverse consequences to you arising in connection with such share withholding
procedure shall be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock unless such obligations are satisfied.
11.
Parachute Payments.
(a)
If any payment or benefit you 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, 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 your 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: reduction of cash payments; cancellation of accelerated vesting of Stock Awards; reduction
of employee benefits. In the event that acceleration of vesting of Stock Award compensation is to
be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of
grant of your Stock Awards (
i.e.
, earliest granted Stock Award cancelled last).
(b)
The accounting firm engaged by the Company for general audit purposes as of the day prior
to the effective date of the Change in Control shall perform the foregoing calculations. If the
accounting firm so engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall bear all expenses
with respect to the determinations by such accounting firm required to be made hereunder.
(c)
The accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to you and the Company within
fifteen (15) calendar days after the date on which your right to a Payment is triggered (if
requested at that time by you or the Company) or such other time as requested by you 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 you and the
Company with an opinion reasonably acceptable to you 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 you and the Company.
12.
Tax Consequences
. You hereby agree that the Company does not have a duty to
design or administer the Plan or its other compensation programs in a manner that minimizes your
tax liabilities. You shall not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your
other compensation. In particular, you acknowledge that this option is exempt from Section 409A of
the Code only if the exercise price per share specified in the Grant Notice is at least equal to
the fair market value per share of the Common Stock on the Date of Grant and there is no other
impermissible deferral of compensation associated with the option.
13.
Notices.
Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
14.
Governing Plan Document.
Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
Attachment II
2010 Non-Employee Directors Stock Award Plan
Attachment III
Notice of Exercise
NOTICE OF EXERCISE
QUINSTREET, INC.
2010 NON-EMPLOYEE DIRECTORS STOCK AWARD PLAN
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QuinStreet, Inc.
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[
]
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[
]
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Date of Exercise:
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Shares to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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$
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Regulation T Program (cashless exercise)
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$
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Value of shares of
QuinStreet, Inc. common
stock delivered herewith
1
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$
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Value of shares of
QuinStreet, Inc. common
stock pursuant to net exercise
2
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$
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1
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Shares must meet the public trading requirements set
forth in the option. Shares must be valued on the date of exercise in
accordance with the terms of the 2010 Non-Employee Directors Stock Award Plan
and the option being exercised, must have been owned for the minimum period
required in the option agreement, and must be owned free and clear of any
liens, claims, encumbrances or security interests. Certificates must be
endorsed or accompanied by an executed assignment separate from certificate.
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2
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QuinStreet, Inc. must have established net exercise
procedures at the time of exercise in order to utilize this payment method and
must expressly consent to your use of net exercise at the time of exercise.
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the QuinStreet, Inc. 2010 Non-Employee Directors Stock Award Plan and (ii) to
provide for the payment by me to you (in the manner designated by you) of your withholding
obligation, if any, relating to the exercise of this option.
Exhibit 99.14
QuinStreet, Inc.
Stock Option Grant Notice
Annual Grant
(2010 Non-Employee Directors Stock Award Plan)
QuinStreet, Inc. (the
Company
), pursuant to its 2010 Non-Employee Directors Stock Award Plan
(the
Plan
), hereby grants to Optionholder an option to purchase the number of shares of the
Companys Common Stock set forth below. This option is subject to all of the terms and conditions
as set forth herein and in the Option Agreement, the Plan, and the Notice of Exercise, all of which
are attached hereto and incorporated herein in their entirety.
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Optionholder:
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Date of Grant:
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Vesting Commencement Date:
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Number of Shares Subject to Option:
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Exercise Price (Per Share):
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Total Exercise Price:
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Expiration Date:
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Type of Grant:
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Nonstatutory Stock Option
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Exercise Schedule
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Same as Vesting Schedule
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Vesting Schedule
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1/12
th
of the shares vest at the end of each month following the Date of Grant, subject to accelerated
vesting under specified circumstances as provided in the Option Agreement and Plan.
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Payment:
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By one or a combination of the following items (described in the Option Agreement):
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þ
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By cash or check
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þ
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By bank draft or money order payable to the Company
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þ
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Pursuant to a Regulation T Program if the Shares are publicly traded
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By delivery of already-owned shares if the Shares are publicly traded
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Subject to the Companys consent at the time of exercise, by a net exercise arrangement
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Additional Terms/Acknowledgements:
The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the
Option Agreement, and the Plan set forth the entire understanding between Optionholder and the
Company regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder by the Company, and (ii) the following agreements only:
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QuinStreet, Inc.
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Optionholder:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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Attachments
: Option Agreement, 2010 Non-Employee Directors Stock Award Plan and Notice
of Exercise
Attachment I
Option Agreement
QuinStreet, Inc.
2010 Non-Employee Directors Stock Award Plan
Option Agreement
(Nonstatutory Stock Option)
Pursuant to your Stock Option Grant Notice (
Grant Notice
) and this Option Agreement,
QuinStreet, Inc. (the
Company
) has granted you an option under its 2010 Non-Employee Directors
Stock Award Plan (the
Plan
) to purchase the number of shares of the Companys Common Stock
indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms
not explicitly defined in this Option Agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1.
Vesting.
Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service. In addition, if the Company is subject to a Change in Control before your
Continuous Service terminates, then all of the unvested shares subject to this option shall become
fully vested and exercisable immediately prior to the effective date of such Change in Control.
2.
Number of Shares and Exercise Price.
The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.
3.
Method of Payment.
Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any one or more of the following manners
unless otherwise provided in your Grant
Notice
:
(a)
Provided that at the time of exercise the Common Stock is publicly traded and to the
extent permitted by law, pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of
cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.
(b)
Provided that at the time of exercise the Common Stock is publicly traded, by delivery to
the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. Delivery for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
(c)
Subject to the consent of the Company at the time of exercise
, by a net exercise
arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued
upon exercise of your option by the largest whole number of shares with a Fair Market Value that
does not exceed the aggregate exercise price; provided, however, that the Company shall accept a
cash or other payment from you to the extent of any remaining balance of the aggregate exercise
price not satisfied by such reduction in the number of whole shares to be issued; provided further,
however, that shares of Common Stock will no longer be outstanding under your option and will not
be exercisable thereafter to the extent that (1) shares are used to pay the exercise price pursuant
to the net exercise, (2) shares are delivered to you as a result of such exercise, and (3) shares
are withheld to satisfy tax withholding obligations.
4.
Whole Shares.
You may exercise your option only for whole shares of Common Stock.
5.
Securities Law Compliance.
Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
6.
Term.
You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires,
subject to the provisions of Section 6(g) of the Plan, upon the earliest of the following:
(a)
six (6) months after the termination of your Continuous Service for any reason other than
Disability, death, provided
however,
that if during any part of such six (6) month period your
option is not exercisable solely because of the condition set forth in the section above relating
to Securities Law Compliance, your option shall not expire until the earlier of the Expiration
Date or until it shall have been exercisable for an aggregate period of six (6) months after the
termination of your Continuous Service;
(b)
twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c)
eighteen (18) months after your death if you die either during your Continuous Service or
within six (6) months after your Continuous Service terminates;
(d)
the Expiration Date indicated in your Grant Notice; or
(e)
the day before the tenth (10th) anniversary of the Date of Grant.
Notwithstanding the foregoing, if your sale, within the applicable time periods set forth in
Section 6, of the shares acquired upon exercise of your Option would subject you to suit under
Section 16(b) of the Exchange Act, your Option shall remain exercisable until the earlier of
(i) the expiration of a period of ten (10) days after the date on which a sale of the shares by you
would no longer be subject to such suit, (ii) the expiration of the one hundred and ninetieth
(190th) day after your termination of Continuous Service, or (iii) the Expiration Date indicated in
your Grant Notice.
7.
Exercise.
(a)
You may exercise the vested portion of your option during its term by delivering a Notice
of Exercise (in a form designated by the Company) together with the exercise price to the Secretary
of the Company, or to such other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may then require.
(b)
By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of
your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock
acquired upon such exercise.
8.
Transferability.
Your option is not transferable, except (1) by will or by the
laws of descent and distribution, (2) with the prior written approval of the Company, by instrument
to an inter vivos or testamentary trust, in a form accepted by the Company, in which the option is
to be passed to beneficiaries upon the death of the trustor (settlor) and (3) with the prior
written approval of the Company, by gift, in a form accepted by the Company, to a permitted
transferee under Rule 701 of the Securities Act.
9.
Option not a Service Contract.
Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
10.
Withholding Obligations.
(a)
At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
(b)
The Company may, in its sole discretion, and in compliance with any applicable conditions
or restrictions of law, withhold from fully vested shares of Common Stock otherwise issuable to you
upon the exercise of your option a number of whole shares of Common Stock having a Fair Market
Value, determined by the Company as of the date of exercise, not in
excess of the minimum amount of tax required to be withheld by law (or such lower amount as
may be necessary to avoid classification of your option as a liability for financial accounting
purposes). Any adverse consequences to you arising in connection with such share withholding
procedure shall be your sole responsibility.
(c)
You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock unless such obligations are satisfied.
11.
Parachute Payments.
(a)
If any payment or benefit you 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, 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 your 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: reduction of cash payments; cancellation of accelerated vesting of Stock Awards; reduction
of employee benefits. In the event that acceleration of vesting of Stock Award compensation is to
be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of
grant of your Stock Awards (
i.e.
, earliest granted Stock Award cancelled last).
(b)
The accounting firm engaged by the Company for general audit purposes as of the day prior
to the effective date of the Change in Control shall perform the foregoing calculations. If the
accounting firm so engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall bear all expenses
with respect to the determinations by such accounting firm required to be made hereunder.
(c)
The accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to you and the Company within
fifteen (15) calendar days after the date on which your right to a Payment is triggered (if
requested at that time by you or the Company) or such other time as requested by you 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 you and the
Company with an opinion reasonably acceptable to you 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 you and the Company.
12.
Tax Consequences
. You hereby agree that the Company does not have a duty to
design or administer the Plan or its other compensation programs in a manner that minimizes your
tax liabilities. You shall not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your
other compensation. In particular, you acknowledge that this option is exempt from Section 409A of
the Code only if the exercise price per share specified in the Grant Notice is at least equal to
the fair market value per share of the Common Stock on the Date of Grant and there is no other
impermissible deferral of compensation associated with the option.
13.
Notices.
Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
14.
Governing Plan Document.
Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
Attachment II
2010 Non-Employee Directors Stock Award Plan
Attachment III
Notice of Exercise
NOTICE OF EXERCISE
QUINSTREET, INC.
2010 NON-EMPLOYEE DIRECTORS STOCK AWARD PLAN
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QuinStreet, Inc.
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[
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[
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Date of Exercise:
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Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.
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Stock option dated:
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Number of shares as
to which option is
exercised:
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Shares to be
issued in name of:
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Total exercise price:
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$
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Cash payment delivered
herewith:
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$
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Regulation T Program (cashless exercise)
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$
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Value of
shares of
QuinStreet, Inc. common
stock delivered herewith
1
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$
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Value of
shares of
QuinStreet, Inc. common
stock pursuant to net exercise
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$
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1
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Shares must meet the public trading requirements set
forth in the option. Shares must be valued on the date of exercise in
accordance with the terms of the 2010 Non-Employee Directors Stock Award Plan
and the option being exercised, must have been owned for the minimum period
required in the option agreement, and must be owned free and clear of any
liens, claims, encumbrances or security interests. Certificates must be
endorsed or accompanied by an executed assignment separate from certificate.
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QuinStreet, Inc. must have established net exercise
procedures at the time of exercise in order to utilize this payment method and
must expressly consent to your use of net exercise at the time of exercise.
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the QuinStreet, Inc. 2010 Non-Employee Directors Stock Award Plan and (ii) to
provide for the payment by me to you (in the manner designated by you) of your withholding
obligation, if any, relating to the exercise of this option.