exv10w4






Exhibit 10.4




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 Company’s 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:




	 	 	 	 	 
	Type of Grant:

	 	o Incentive Stock Option1
	 	o Nonstatutory Stock Option
	 
	 	 	 	 
	Exercise Schedule:

	 	o Same as Vesting Schedule
	 	o Early Exercise Permitted






	 	 	 
	Vesting Schedule:

	 	1/4th  of the shares vest one year after the Vesting Commencement Date.
	 

	 	1/36th 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).
	 
	Payment:

	 	By one or a combination of the following items (described in the Stock Option Agreement):
	 
	

	 	o By cash or check
	

	 	o Pursuant to a Regulation T Program if the Shares are publicly traded
	

	 	o 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:




	 	 	 
	Other Agreements:

	 	 


	 	 	 





	 	 	 	 	 
	QuinStreet, Inc.	 	 Optionholder:

 
	 
	By:   
	 	 
	                         Signature	 	                         Signature
	 
	Title:   
	 	Date:   

	 
	Date: 
	 	 	 	 
	 


Attachments: Stock Option Agreement, 2008 Equity Incentive Plan and Notice of Exercise






 




			
	1	 	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.




 









 










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 Company’s 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 Company’s form of Early Exercise Stock Purchase Agreement;




          (c) you shall enter into the Company’s 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 Company’s 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 Company’s
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 Stock’s
“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 Company’s 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 Company’s 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 Company’s 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 Company’s
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 Company’s bylaws on the Date of Grant, then the
right of first refusal described in the Company’s bylaws on the Date of Grant shall apply. The
Company’s 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 Company’s 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)




	 	 	 	 
	QuinStreet, Inc.
	 	 	 
	1051 East Hillsdale Blvd. 
	 	 	 
	Foster City, CA 94404

	 	Date of Exercise: 	 






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.



	 	 	 	 	 
	Type of option (check one):

	 	Incentive o
	 	Nonstatutory o
	 
	 	 	 	 
	Stock option dated:

	 	 

	 	 
	 
	 	 	 	 
	Number of shares as
to which option is
exercised:

	 	 

	 	 
	 
	 	 	 	 
	Certificates to be
issued in name of:

	 	 

	 	 
	 
	 	 	 	 
	Total exercise price:

	 	$ 

	 	 
	 
	 	 	 	 
	Cash payment delivered 

herewith:

	 	$ 

	 	 
	 
	 	 	 	 
	Value of                      shares of
QuinStreet, Inc. common
stock delivered herewith2:

	 	$ 

	 	 






     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.





 




			
	2	 	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.




 









 










     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 Company’s 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,