Exhibit 10.1

Certificate of Stock Option Grant

[Name of Executive]
[Address of Executive]

Employee ID:
Option Number:
Option Date:
Applicable Option Plan:
Shares:
Price:
Option Type:

Shares in each period will become fully vested on the date shown, subject to the
attached Addendum 1 the terms and conditions of which are incorporated herein by
this reference.

Shares     Vest Type     Full Vest     Expiration

By your signature and the Company’s signature below, you (“Executive”) and the
Company agree that these options are granted under and governed by the terms and
conditions of this Certificate of Stock Option Grant and the Company’s Stock
Option Plan, as it may be amended from time to time, pursuant to which such
options were granted (the “Plan”). A copy of the Plan as is located on the
Company Intranet at http://intranet.homestore.com and is identified by the
Applicable Option Plan number set forth above. A copy of the plan is also
available by request from the Company.

             

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[Signature of Homestore Representative] Homestore, Inc.
  Date        
 
           

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[Executive’s Signature]
      Date    

 

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Addendum 1 to
Certificate of Stock Option Grant

1. Termination Upon Change of Control. In the event of Executive’s Termination
Upon a Change of Control, provided that Executive complies with Section 4 below
and provides the transition services that the Company may request as described
in Section 5 below, immediately prior to the effective date of the Change of
Control, 100% of all outstanding stock options granted hereunder (the
“Outstanding Options”), shall vest. In addition, the Outstanding Options shall
be exercisable by Executive for a period of one year following the end of such
transition period (if any) or one year following termination if the Company
requests no transition period.

2. Termination in Absence of Change of Control. In the event of Executive’s
Termination in Absence of a Change of Control, provided that Executive complies
with Section 4 below and performs the transition services that the Company may
request as described in Section 5 below, 100% of all Outstanding Options shall
vest. In addition, the Outstanding Options shall be exercisable by Executive for
a period of one year following the end of such transition period (if any) or one
year following termination if the Company requests no transition period.

3. Definitions. Capitalized terms used in this Addendum shall have the meanings
set forth in this Section 3.

     3.1 “Cause” means (a) your willful and continued failure to perform
substantially your duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness, and specifically
excluding any failure by you, after reasonable efforts, to meet performance
expectations), for thirty (30) days after a written demand for substantial
performance is delivered to you by the ___[Chief Executive Officer or Chairman
of the Board of Director] of Homestore which specifically identifies the manner
in which the ___ [Chief Executive Officer or Chairman of the Board of Directors]
believes that you have not substantially performed your duties, or (b) the
willful engaging by you in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company. For purposes of this
provision, no act or failure to act, on the part of you, shall be considered
“willful” unless it is done, or omitted to be done, by you in bad faith without
reasonable belief that your action or omission was in the best interests of the
Company.

     3.2 “Change of Control” means (a) any “person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), other than a trustee or other fiduciary holding securities of
the Company under an employee benefit plan of the Company, becomes the
“beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of (A) the outstanding shares of common stock of the Company or (B) the
combined voting power of the Company’s then-outstanding securities; (b) the
Company is party to a merger or consolidation, or series of related
transactions, which results in the voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
another entity) at least fifty (50%) percent of the combined voting power of the
voting securities of the Company or such surviving or other entity outstanding
immediately after such merger or consolidation; (c) the sale or disposition of
all or substantially all of the Company’s assets (or consummation of any
transaction, or series of related transactions, having similar effect), unless
at least fifty (50%) percent of the combined voting power of the voting
securities of the entity acquiring those assets is held by persons who held the
voting securities of the Company immediate prior to such transaction or series
of transactions; (d) there occurs a change in the composition of the Board of
Directors of the Company within a two-year period, as a result of which fewer
than a majority of the directors are Incumbent Directors; (e) the dissolution or
liquidation of the Company, unless after such liquidation or dissolution all or
substantially all of the assets of the Company are held in an entity at least
fifty (50%) percent of the combined voting power of the voting securities of
which is held by persons who held the voting securities of the Company
immediately prior to such liquidation or dissolution; or (f) any transaction or
series of related transactions that has the substantial effect of any one or
more of the foregoing.

     3.3 “Company” means Homestore, Inc., any successor thereto and, following a
Change of Control, any successor or owner of substantially all the business
and/or assets of Homestore, Inc.

     3.4 “Diminution of Responsibilities” means the occurrence of any of the
following conditions, without Executive’s consent and which condition is not
cured by the Company within ten (10) days after notice by Executive specifying
the condition: (a) a reduction by the Company of Executive’s duties,
responsibilities, authority or reporting relationship such that Executive no
longer serves in a substantive, senior executive role for the Company comparable
in stature to Executive’s current role, or no longer reports to the ___[Chief
Executive Officer or Board of Directors] of the Company; (b) a reduction in
Executive’s base salary or the percentage of his base salary on which his target
bonus is based, provided that a reduction in base salary that is the result of a
general reduction in salary in an amount similar to reductions for other
similarly situated Company executives shall not constitute a “Diminution of
Responsibilities”; (c) a material reduction in benefits (other than future
option grants), provided that a reduction in benefits that is the result of a
general reduction in benefits in an amount similar to reductions for other
similarly situated Company

 

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employees shall not constitute a “Diminution of Responsibilities”; (d) the
Company’s requiring Executive to be based at any office or location more than 50
miles from the Company’s headquarters in Westlake Village, California; or (e) a
material breach by the Company of the terms of this Addendum or the terms of any
employment agreement or retention and severance agreement with the Executive.

     3.5 “Disability” means the inability to engage in the performance of
Executive’s duties by reason of a physical or mental impairment which
constitutes a permanent and total disability in the opinion of a qualified
physician.

     3.6 “Incumbent Director” means a director who either (1) is a director of
the Company as of the date of the grant of the options set forth herein, or
(2) is elected, or nominated for election, to the Board of Directors of the
Company with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination, but (3) was not elected or
nominated in connection with an actual or threatened proxy contest relating to
the election of directors to the Company.

     3.7 “Termination in Absence of Change of Control” means: a) any termination
of employment of Executive by the Company without Cause (i) that occurs prior to
the date that the Company first publicly announces it has entered into a
definitive agreement or that the Company’s board of directors has endorsed a
tender offer for the Company’s stock that in either case if consummated would
result in a Change of Control (even though consummation is subject to approval
or requisite tender by the Company’s stockholders and other conditions and
contingencies), (ii) that occurs after the Company announces that any definitive
agreement or tender offer referred to in clause (i) has been terminated and
before it announces it has entered into another such definitive agreement or the
board has endorsed another tender offer, or (iii) that occurs more than twelve
(12) months following the consummation of any transaction or series of related
transactions that result in a Change of Control; or (b) any resignation by
Executive based on a Diminution of Responsibilities that occurs within
one-hundred and twenty (120) days following the occurrence of one of the
conditions that constitutes a Diminution of Responsibilities, but only where
such Diminution of Responsibilities occurs: (i) prior to the date that the
Company first publicly announces it has entered into a definitive agreement or
that the Company’s board of directors has endorsed a tender offer for the
Company’s stock that if consummated would result in a Change of Control (even
though consummation is subject to approval or requisite tender by the Company’s
stockholders and other conditions and contingencies), (ii) after the Company
announces that any definitive agreement or tender offer referred to in clause
(i) has been terminated and before it announces it has entered into another such
definitive agreement or the board has endorsed another tender offer, or (iii)
more than twelve (12) months following the consummation of any transaction or
series of related transactions that result in a Change of Control.
Notwithstanding anything to the contrary herein, the term “Termination in
Absence of Change of Control” shall not include termination of the employment of
Executive (1) by the Company for Cause; (2) as a result of the voluntary
termination of employment by Executive for reasons other than a Diminution of
Responsibilities; or (3) that is a “Termination Upon a Change of Control.”

     3.8 “Termination Upon Change of Control” means:

            (a) any termination of the employment of Executive by the Company
without Cause during the period commencing on or after the date that the Company
first publicly announces that it has signed a definitive agreement or that the
Company’s board of directors has endorsed a tender offer for the Company’s stock
that in either case when consummated would result in a Change of Control (even
though consummation is subject to approval or requisite tender by the Company’s
stockholders and other conditions and contingencies) and ending at the earlier
of the date on which the Company publicly announces that such definitive
agreement or tender offer has been terminated without a Change of Control or on
the date which is twelve (12) months following the consummation of any
transaction or series of transactions that results in a Change of Control; or
(b) any resignation by Executive based on a Diminution of Responsibilities where
(i) such Diminution of Responsibilities occurs during the period commencing on
or after the date that the Company first publicly announces that it has signed a
definitive agreement that when consummated would result in a Change of Control
(even though consummation is subject to approval or requisite tender by the
Company’s stockholders and other conditions and contingencies) and ending on the
date which is twelve (12) months following the consummation of the transaction
or series of transactions that results in the Change of Control, and (ii) such
resignation occurs within one-hundred and twenty (120) days following such
Diminution of Responsibilities. Notwithstanding anything to the contrary herein,
the term “Termination Upon Change of Control” shall not include any termination
of the employment of Executive (1) by the Company for Cause; (2) as a result of
the voluntary termination of employment by Executive for reasons other than a
Diminution of Responsibilities; or (3) that is a “Termination in Absence of
Change of Control.”

event longer than 180 days following the effective date of such termination. If
Executive agrees to 4. Release of Claims. The Company may condition the
accelerated vesting of stock awards in this Addendum upon the delivery by
Executive of a signed mutual release of known and unknown claims related to
Executive’s employment in a form satisfactory to the Company.

5. Transition Period. In the event of Executive’s Termination Upon a Change of
Control or Termination in Absence of a Change of Control, the Company shall have
the right exercisable by notice to Executive given at any time prior to ten
(10) days after the effective

 

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date of such termination to request that Executive remain employed by the
Company for such period following such termination as the Company may elect, but
in no such transition period (by giving notice to the Company within five
(5) days after the Company’s notice to Executive), then during such period
Executive shall remain a full time employee of the Company at the rate of
compensation and with the same benefits as in effect on the date of his
termination, shall perform such duties consistent with his prior
responsibilities as the Company shall reasonably request, including services
designed to transition his duties and responsibilities to one or more
replacements, and at the conclusion of the transition period shall receive the
benefits provided in Section 1 or 2 above as the case may be. If the Company
requests a transition period as provided above and Executive does not agree to
it, Executive shall not receive the benefits of the provisions of this Addendum.
The Company need not request a transition period, in which case Executive shall
receive the benefit of Section 1 or Section 2, as the case may be, on the date
of actual termination. The Company shall have the right at any time to terminate
Executive during the transition period, in which case Executive shall be
entitled to the benefits of Section 1 or Section 2, as the case may be.
Executive shall have the right to terminate his employment at any time during
the transition period, but if Executive shall fail or refuse to complete the
transition period, other than as a result of death or Disability, then Executive
shall not be entitled to the benefit of Section 1 or Section 2. In the case of
Executive’s death or Disability during the transition period, he shall be deemed
to have completed the transition period service for the full period requested.

6. Arbitration. Any claim, dispute or controversy arising out of this Addendum,
the interpretation, validity or enforceability of this Addendum or the alleged
breach thereof shall be submitted by the parties to binding arbitration by the
American Arbitration Association. The site of the arbitration proceeding shall
be in Los Angeles County, California, or another location mutually agreed to by
the parties.

7. Miscellaneous.

          7.1 Successors of the Company. The Company will require any successor
or assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, expressly, absolutely and unconditionally to assume and agree to
perform this Addendum in the same manner and to the same extent that the Company
would be required to perform it if no such succession or assignment had taken
place. In the event of a Change in Control in which the options granted by the
Company to Executive cannot be assumed by the successor or assign, Company shall
give Executive reasonable advanced notice of such Change in Control, all options
granted by the Company to Executive shall vest and become exercisable prior to
such Change in Control, and Company shall allow Executive a reasonable
opportunity to exercise such options prior to such Change in Control.

          7.2 Modification of Addendum. This Addendum may be modified, amended
or superceded only by a written agreement signed by Executive and the Chief
Executive Officer or an authorized member of the Board of Directors of the
Company.

          7.3 Governing Law. This Addendum shall be interpreted in accordance
with and governed by the laws of the State of California .