exv10w1



 






Exhibit 10.1




LOOPNET, INC.




2001 Stock Option Plan




          Section 1.
Description of Plan. This is the 2001 Stock Option Plan (the “Plan”)
of LoopNet, Inc., a California corporation (the “Company”). Under the Plan employees, directors,
consultants and advisors of the Company or any of its subsidiaries, to be selected as below set
forth, may be granted options (“Options”) to purchase shares of the Common Stock of the Company
(“Common Stock”). For purposes of the Plan, the term “subsidiary” means any corporation 50% or
more of the voting stock of which is owned by the Company or by a subsidiary (as so defined) of
the Company. It is intended that the Options under the Plan will either qualify for treatment as
incentive stock options under Section 422 (as from time to time amended or superceded) of the
Internal Revenue Code of 1986, as amended (the “Code”), and be designated Incentive Stock Options,
or not qualify for such treatment and be designated Nonqualified Stock Options.




          Section 2. Purpose of the Plan. The purpose of the Plan and of granting options to
employees, directors, consultants and advisors is to further the growth, development and financial
success of the Company and its subsidiaries by providing additional incentives to such persons by
assisting them to acquire shares of Common Stock and to benefit directly from the Company’s
growth, development and financial success.




          Section 3. Eligibility. The persons who shall be eligible to receive grants of
Options under the Plan shall be all employees, directors, consultants and advisors of the Company
or any of its subsidiaries. A person who holds an Option is herein referred to as a “Participant.”
More than one Option may be granted to any one Participant. Notwithstanding the foregoing, no
Option may be granted to any person who then owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of a subsidiary unless (a) the
Option Price (as hereinafter defined) is at least 110% of the fair market value of the Common
Stock on the date of grant, and (b) in the case of an Incentive Stock Option, the termination date
of such Option is not later than five (5) years after the date such Option is granted. For
purposes of the preceding sentence, a person’s stock ownership will be determined using the
constructive ownership rules contained in Code Section 424(d), as from time to time amended or
superceded.




          Only employees of the Company or a subsidiary may be granted Incentive Stock Options under the
Plan. The exercise of an Incentive Stock Option will not qualify for favorable income tax treatment
unless the Participant remains an employee of the Company or a subsidiary at all times during the
period beginning on the date of the grant of the Incentive Stock Option and ending on the date
three (3) months before the date of the exercise of the Incentive Stock Option. For this purpose, a
Participant who is on a leave of absence that exceeds 90 days will be considered to have terminated
his or her employment on the ninety-first day of the leave of absence, unless the Participant’s
rights to reemployment are guaranteed by statute or contract. However, a Participant will not be
considered to have incurred a termination of employment because of a transfer of employment between
the Company and a subsidiary (or vice versa).




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          The aggregate fair market value (determined as of the time an Option is granted) of the
Common Stock for which any Participant may be granted Incentive Stock Options first exercisable in
any calendar year under this Plan and any other incentive stock option plans (which qualify under
Section 422 of the Code) of the Company or any subsidiary shall not exceed $100,000.




          Section 4.
Administration. The Plan shall be administered by the Board of Directors
of the Company (the “Board”). The Board is authorized and empowered to administer the Plan, and
subject to the Plan, (a) to select the Participants, to specify the number of shares of Common
Stock with respect to which Options are granted to each such Participant, to specify the Option
Price (as hereinafter defined) and the terms of Options, and in general to grant Options; (b) to
determine, subject to the limits of Section 3 hereof, whether Options will be Incentive
Stock Options or Nonqualified Stock Options; (c) to determine the dates upon which Options shall
be granted and to provide for the terms and conditions of the Options in a manner consistent with
the Plan, which terms and conditions need not be identical as to the various Options granted; (d)
to interpret the Plan; (e) to prescribe, amend and rescind rules relating to the Plan; and (f) to
determine the rights and obligations of Participants under the Plan. The interpretation and
construction by the Board of any provision of the Plan or of any Option granted thereunder shall
be final. No member of the Board shall be liable for any action or determination made in good
faith with respect to the Plan or any Option granted under it.




          Notwithstanding the foregoing, the Board may from time to time determine that the Plan shall
be administered (in whole or in part, or with respect to one or more designated groups or classes
of Participants) by a committee consisting of members of the Board. All references herein to the
“Board” shall, with respect to any Plan matters so administered by a committee of the Board, be
deemed to be references to such committee as so constituted.




          Section 5.
Shares Subject to the Plan. The number of shares of Common Stock which may
be purchased pursuant to the exercise of Options granted under the Plan shall not exceed 3,250,000
shares, subject to adjustment as provided in Section 11 to reflect all stock splits, stock
dividends or similar capital changes. Upon the expiration or termination for any reason of an
outstanding Option which shall not have been exercised in full, any shares of Common Stock then
remaining unissued which shall have been reserved for issuance upon such exercise shall again
become available for the granting of additional Options under the Plan. The maximum number of
shares of Common Stock issuable upon exercise of Options that may be granted to any Participant
shall be 3,250,000. For purposes of the preceding sentence and to the extent required by Section
162(m) of the Code (as from time to time amended or superseded), the repricing of an Option shall
be treated as the grant of a new option and the cancellation of the repriced Option, and an Option
shall be deemed continued to be outstanding despite any cancellation, including any cancellation
in connection with any such repricing.




          Section 6.
Option Price. The purchase price per share (the “Option Price”) of the
shares of Common Stock underlying each Option shall be determined by the Board in each case and (a)
in the case of Nonqualified Stock Options, shall be not less than 85% of the fair market value of
such shares on the grant date, and (b) in the case of Incentive Stock Options, shall be not less
than the fair market value of such shares on the grant date. Such fair market value shall be
determined by the Board. The Option Price shall be subject to the requirement set forth in
Section 3 of the Plan, if applicable, with respect to certain Participants. In the event
that the Company acquires another





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entity, the Board may authorize the issuance of Options (“Substitute Options”) to the individuals
performing services for the acquired entity in substitution of stock options previously granted to
those individuals in connection with their performance of services for such entity upon such terms
and conditions as the Board shall determine, taking into account the conditions of Code Section
424(a), as from time to time amended or superceded, in the case of a Substitute Option that is
intended to be an Incentive Stock Option.




          Section 7.
Vesting of Options. Subject to all other provisions of the Plan, each
Option shall become exercisable (“vest”) for the full number of shares of Common Stock subject
thereto, or any part thereof, as to one-fourth (1/4) of the full number of shares subject thereto
one year after the date of grant and thereafter as to the balance in thirty-six (36) equal
cumulative monthly installments following such first anniversary date (provided the Participant is
continuously employed by the Company through and including the time of each vesting), or in such
other installments and at such other intervals as the Board may in any specific case or cases
otherwise specifically determine in granting such Option, including credit for employment with any
predecessor entity of the Company up to a maximum of two (2) years service; provided, however,
that each Option shall provide that it shall become exercisable as to at least twenty percent
(20%) of the full number of shares subject thereto on each anniversary date of the date of grant,
and thus become fully exercisable not more than five (5) years after the date of grant.




          Notwithstanding the foregoing, if an Acquisition Termination (as defined below) occurs with
respect to a Participant, then, with respect to any portion of any Option held by such Participant
which is not then exercisable pursuant to the vesting provisions of
Section 11 of the Plan or the
provisions of any applicable Option agreement with such Participant (the “Unvested Options”), the
Option shall automatically accelerate and become exercisable as to 50% of the Unvested Options
(determined as of the time of such Acquisition Termination). An Acquisition Termination shall be
deemed to have occurred if the Company is acquired by another entity by means of any transaction or
series of related transactions (including, without limitation, any reorganization, merger or
consolidation) that results in the transfer of 50% or more of the outstanding voting power of the
Company or by means of the sale of all or substantially all of the assets of the Company, and if in
such event either (A) the Participant is not offered full-time employment with the surviving or
acquiring entity upon general terms and conditions (such as duties, responsibilities, location of
employment and compensation, including without limitation the continued vesting of the Option in
accordance with its terms) not materially less favorable to the Participant than the terms and
conditions of the Participant’s employment with the Company prior to such event, or (B) such
employment is offered to and accepted by the Participant but such employment (upon such general
terms and conditions) is terminated by such surviving or acquiring corporation within twelve (12)
months after such event other than for Cause (as hereinafter defined). For purposes of the
foregoing, “Cause” shall mean (I) any criminal act by the Participant which is punishable by
imprisonment of twelve (12) months or more, (II) any act of fraud or dishonesty committed by the
Participant in the course of his or her employment or (III) the Participant’s continued refusal to
perform the material duties of his or her employment after written notice has been provided to the
Participant.




          Section 8.
Form of Option. Each Option granted under the Plan shall be evidenced by a
written stock option executed by the Company and delivered to the Participant, which shall be
substantially in the form attached as Exhibit A-l (in the case of an Option intended to be
an Incentive Stock Option) or Exhibit A-2 (in the case of an Option intended to be a
Nonqualified Stock Option)




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hereto, or shall be in such other form as specified by the Board generally or in any specific
instance. The Company may require, as a condition to the grant of an Option, that the Participant
execute and deliver to the Company an Acknowledgment of Stock Option Grant substantially in the
form attached as Exhibit B hereto or in such other form as specified by the Board
generally or in any specific instance.




          Section 9. Exercise of Options. An Option may be exercised by the Participant only by
giving written notice to the Company specifying the number of full shares to be purchased and
accompanied by payment of the full purchase price therefor (together with such amounts in respect
of taxes as the Company may be required to collect and withhold, as provided in Section 17
of the Plan) in cash, by check or in such other form of lawful consideration (including promissory
notes or shares of Common Stock then held by the Participant) as the Board may approve from time
to time. The exercise price may be paid, at the discretion of the Board, by delivery to the
Company of documentation satisfactory to the Company to (a) effect the exercise of the Option and
(b) cause delivery to the Company by the Participant’s broker of the sale or loan proceeds of all
or a portion of the underlying Common Stock as required to pay the exercise price (and any
applicable amounts which the Company is required to collect and withhold in respect of taxes).




          The Company’s obligation to issue shares of Common Stock upon the exercise of an Option is
expressly conditioned upon the making of such representations, agreements and related undertakings
by the Participant (or his or her legal representative, heir or legatee, as the case may be) in
order to comply with the requirements of any exemption from any securities law registration or
other qualification of such shares which the Company in its sole discretion shall deem necessary or
advisable or to confirm any agreements, undertakings or restrictions applicable to the Participant
with respect to the shares of Common Stock issuable upon the exercise of an Option as provided in
the Plan. Such required representations and undertakings may include representations and agreements
that such Participant (or his or her legal representative, heir or legatee): (a) is purchasing such
shares for investment and not with any present intention of selling or otherwise disposing thereof;
(b) acknowledges and agrees to all restrictions and other conditions applicable to such shares of
Common Stock pursuant to the Plan, including but not limited to the lock-up provisions of
Section 21 of the Plan and the right of first refusal provisions of Section 22 of
the Plan; and (c) agrees to have placed upon the face and/or reverse of any certificates evidencing
such shares a legend setting forth (i) any representations, agreements and undertakings which such
Participant has given to the Company or are provided in the Plan or a reference thereto, including
but not limited to the lock-up provisions of Section 21 of the Plan and the right of first refusal
provisions of Section 22 of the Plan and (ii) that, prior to effecting any sale or other
disposition of any such shares, and in addition to any additional requirements applicable to any
sale or disposition of such shares of Common Stock pursuant to the Plan, the Participant must
furnish to the Company an opinion of counsel, satisfactory to the Company and its counsel, to the
effect that such sale or disposition will not violate the applicable requirements of state and
federal laws and regulatory agencies. Without limiting the foregoing, the Company may require, as a
condition to any exercise of an Option, that the Participant execute and deliver to the Company a
Notice of Option Exercise substantially in the form of
Exhibit C hereto or in such other form as
specified by the Board generally or in any specific instance.




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          Section 10. Nontransferability. No Option shall be assignable or transferable except
by will or by the laws of descent and distribution. During the lifetime of a Participant, any
Option granted to him or her shall be exercisable only by him or her. After the death of a
Participant, the Option granted to him or her may be exercised, prior to its termination as
provided by Section 13(b), only by his or her legal representative, his or her legatee or
a person who acquired the right to exercise the Option by reason of the death of the Participant.




          Section 11. Recapitalization, Reorganization, Merger or Consolidation. If the
outstanding shares of Common Stock of the Company are increased, decreased or exchanged for
different securities through reorganization, merger, consolidation, combination, recapitalization,
reclassification, stock split, reverse stock split, stock dividend or like capital adjustment, a
proportionate adjustment shall be made (a) in the aggregate number of shares of Common Stock which
may be purchased pursuant to the exercise of Options under the Plan, as provided in Section 5, and (b) in the number, price, and kind of shares subject to any outstanding Option granted
under the Plan.




          Upon the record or effective date applicable to the right to receive cash, securities or
other property following the sale of all or substantially all of the assets of the Company (and
pursuant to a liquidating distribution and dissolution of the Company in connection therewith) or
with respect to any reorganization, merger or consolidation in which the Company does not survive,
the Plan and each outstanding Option shall automatically terminate, except solely as provided in
the next sentence. Notwithstanding the preceding sentence, each Option which has not been assumed
or an equivalent option substituted therefor, as provided in the next sentence, by a corporation
acquiring all or substantially all of the assets of the Company (in connection with which there is
a liquidating distribution and dissolution of the Company) or by a surviving corporation in the
case of a reorganization, merger or consolidation, shall automatically accelerate and become
exercisable in whole or in part without regard to the installment
provisions of Section 7 of the
Plan or any option agreement (except as provided below in this
Section 11) until one (1)
business day before the record or effective date applicable to such right to receive cash,
securities or other property, unless the acquiring or surviving corporation, in its sole
and absolute discretion, assumes all Options or issues in respect of all Options substitute
options to purchase shares of the acquiring or surviving corporation, which assumed or substitute
options contain such terms and provisions as substantially preserve the rights and benefits of the
assumed or substituted Options, and in such event the assumed or substituted Options shall
not automatically accelerate or become exercisable pursuant to the preceding sentence;
provided, however, that the accelerated vesting provisions of Section 7 shall
apply in the case of any Acquisition (as defined in
Section 7).




          In any case in which an Option automatically accelerates and becomes exercisable without
regard to its installment provisions pursuant to the preceding paragraph, the Participant holding
the applicable Option shall be given written notice thereof by the Company at least ten (10) days
prior to such record or effective date, which notice shall advise such Participant of the proposed
event and the rights of the Participant pursuant to this paragraph. If such notice is not given,
the Company or, if applicable, any such acquiring or surviving corporation, shall make such
arrangements as are equitable under the circumstances to avoid or reverse any economic detriment
suffered by such Participant as the result of any failure to give such notice, but in no event
shall any failure to give such notice affect the validity or effectiveness of any such sale,
reorganization, merger or consolidation.





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          The Board may, in any specific case or cases, specifically provide, in an option agreement or
otherwise, for the treatment of an Option in a manner different than that set forth above upon the
occurrence of any such sale, reorganization, merger or consolidation, but in the absence thereof
the above provisions of this Section 11 shall govern the Option.




          To the extent that the foregoing adjustments relate to stock or securities of the Company,
such adjustments shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided above in this
Section 11, the
Participant shall have no rights by reason of any subdivision or consolidation of shares of stock
of any class or the payment of any stock dividend or any other increase or decrease in the number
of shares of stock of any class, and the number or price of shares of Common Stock subject to any
Option shall not be affected by, and no adjustment shall be made by reason of, any dissolution,
liquidation, reorganization, merger or consolidation, or any issue by the Company of shares of
stock of any class, or rights to purchase or subscribe for stock of any class, or securities
convertible into shares of stock of any class.




          The grant of an Option pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications or changes in its capital or business
structures or to merge, consolidate, dissolve, or liquidate or to sell or transfer all or any part
of its business or assets.




          Section 12.
No Rights as a Shareholder. A Participant holding an Option, or a
transferee of an Option, shall have no rights as a shareholder with respect to any shares covered
by his or her Option until the date of the issuance of a stock certificate to him or her for such
shares, and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the record date is prior
to the date such stock certificate is issued, except as expressly
provided in Section 11.









          Section 13.
Termination of Options. All Options shall terminate and expire upon
the first to occur of the following events:




               (a) the date of expiration of the term of the Option, which expiration date shall be one hundred twenty (120) months after the date the Option is granted (or shall be
such earlier date as may be required, with respect to certain Participants, pursuant to Section
3 of the Plan, or such earlier date as the Board may otherwise specifically determine in granting such
Option);



               (b) the expiration of sixty (60) days from the date of the Participant’s termination of employment, either voluntary or involuntary and either with or without cause
(other than by reason of death), except that if the Participant is disabled (within the meaning of Section 422(e)(3) of the Code, as from time to time amended or superseded) at the time of the
Participant’s termination of employment, the expiration of twelve (12) months from the date of
the Participant’s termination of employment;



               (c) the expiration of twelve (12) months from the date of the death of such Participant if his or her death occurs while he or she is employed by the Company or any of
its subsidiaries; or



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               (d) the termination of the Option pursuant to Section 11 of the Plan.



          The Board may, in any specific case or cases, specifically determine, in granting such
Option, to modify the 60-day period referred to in Section 13(b) above, provided that (i)
such period shall be at least thirty (30) days in all cases, and (ii) in the case of an Incentive
Stock Option, any Option not exercised within three (3) months after the date of termination of
employment (other than by reason of death or disability) shall automatically convert to a
Nonqualified Stock Option.




          The termination of employment of a Participant by death, disability or otherwise shall not
accelerate or otherwise affect the number of shares with respect to which an Option may be
exercised, and the Option may only be exercised with respect to that number of shares which could
have been purchased under the Option had the Option been exercised by the Participant on the date
of such termination.




          For purposes of the Plan and any Option granted under the Plan to any director, consultant or
advisor who is not an employee of the Company, references to “employment” in the case of such
director, consultant or advisor shall mean service as a director or the consulting or advisory
engagement of such person, respectively, substantially as in effect at the time of the grant of an
applicable Option, and references to any “termination of employment” or similar words shall refer
to a termination of such service as a director or such consulting or advisory engagement,
respectively, substantially as in effect at the date of the grant of an applicable Option.




          Section 14. Amendment of Plan. The Board may at any time amend the Plan.




          Section 15. Amendment of Outstanding Options. The Board may modify an outstanding
Option, including a modification to (a) change the Option Price, (b) accelerate the right to
exercise the Option, (c) extend or renew the Option, or (d) cancel the Option and issue a new
Option. However, no modification may be made to an outstanding Option that would impair the rights
of the Participant holding the Option without his or her consent.




          Section 16. Termination of Plan. The Plan shall terminate when all Options granted
under the Plan either have been fully exercised, and all shares of Common Stock which may be
purchased pursuant to the exercise of such Options have been so purchased, or have expired;
provided, however, that (a) the Plan shall in any event terminate not later than ten years from
the date of the adoption of the Plan or the date of approval of the Plan by the shareholders of
the Company pursuant to Section 19, whichever is earlier, and (b) the Board may in its
absolute discretion terminate the Plan at any time. No such termination, other than as provided
for in Section 11 hereof, shall in any way affect any Option then outstanding.




          Section 17. Withholding of Taxes. The Company shall deduct and withhold from the
wages, salary, bonus and other income paid by the Company to the Participant the requisite tax
upon the amount of taxable income, if any, recognized by the Participant in connection with the
exercise in whole or in part of any Option or the sale of Common Stock issued to the Participant
upon exercise of the Option, all as may be required from time to time under any federal or state
tax laws and regulations. This withholding of tax shall be made from the Company’s concurrent or
next payment




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of wages, salary, bonus or other income to the Participant or by payment to the Company by the
Participant of required withholding tax, as the Board may determine.




          Section 18.
Compliance with ISO and California Securities Requirements. The Company
intends that the Plan (a) comply with the requirements of the Code and all applicable governmental
rules, regulations and interpretations thereunder as from time to time in effect for treatment as
incentive stock options (the “ISO Requirements”) with respect solely to Options designated as
Incentive Stock Options, (b) comply with the requirements of Section 25102(o), as from time to
time amended or superseded, of the California Corporate Securities Law of 1968, as amended, and
all applicable governmental rules, regulations and interpretations with respect thereto from time
to time in effect for the exemption of all Options granted under the Plan (and all Common Stock
issuable upon exercise of such Options) from the qualification requirements of Section 25110 of
such law (the “California Securities Requirements”), and (c) subject to the foregoing clauses (a)
and (b), grant maximum authority and discretion in all respects to the Board in administering the
Plan. Accordingly, the provisions of the Plan shall, with respect to Incentive Stock Options as to
the ISO Requirements and with respect to all Options as to the California Securities Requirements,
be interpreted and construed in such manner as shall ensure compliance with the ISO Requirements
and the California Securities Requirements, respectively, but otherwise grant maximum authority
and discretion in all respects to the Board in administering the Plan.




          Section
19. Information to Participants and Purchasers. The Company annually shall
provide to each Participant financial statements, to the extent required by the California
Securities Requirements, which have been approved by the Board. Such financial statements also
shall be provided to each individual who was a Participant in the Plan, has acquired shares of
Common Stock pursuant to the Plan and still owns such shares, to the extent required by the
California Securities Requirements. By accepting the grant of an Option, the Participant agrees
not to disclose any information contained in such financial statements, not to duplicate or
transmit such information to any other person, and not to use such information for any purpose
adverse to the Company.









          Section 20.
Shareholder Approval Requirement. This Plan and the grant of Options
hereunder is subject to approval by the shareholders of the Company to the extent required by the
ISO Requirements and the California Securities Requirements. Any Option exercised before
shareholder approval is obtained shall be rescinded if shareholder approval is not obtained within
twelve (12) months after the adoption of this Plan, as and to the extent required by the California
Securities Requirements. Shareholder approval of any amendments to the Plan, including any
amendments increasing the number of shares of Common Stock which may be purchased pursuant to the
exercise of Options granted under the Plan, shall be required only to the extent determined
necessary by the Company in order to comply with any applicable requirements of law, including to
the extent necessary to establish any exemptions from registration or qualification requirements of
applicable federal or state securities law or to comply with the listing or similar requirements of
any stock exchange, quotation system or similar self-regulatory organization.




          Section 21.
Common Stock “Lock-up” Agreement. The Participant agrees that, in
connection with any underwritten offering of Common Stock of the Company pursuant to a
registration statement under the Securities Act of 1933, as amended, whether for the account of
the Company or any holders of securities of the Company, if the underwriters managing the offering
so request, the Participant shall not sell, make any short sale of, loan, grant any option for the
purchase





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of, or otherwise dispose of any of the shares of Common Stock issued or issuable upon the exercise
of an Option (the “Shares”), other than such of the Shares as may be permitted to be included in
the registration, without the prior written consent of such underwriters, for such period of time
(not to exceed one hundred eighty (180) days) from the effective date of such registration
statement as may be requested by such underwriters. Any transferee of the Shares shall take such
Shares subject to the provisions of this Section 21, and the Company may, as a condition
to registering any transfer of the Shares, require the written confirmation of such transferee
that such Shares are taken subject to the provisions of this Section 21 (provided,
however, that such shares shall remain subject to the provisions of this Section 21
without regard to whether or not such written confirmation is requested or obtained).




          Section 22. Right of First Refusal. By accepting the grant of an Option under the
Plan and exercising such Option, the Participant agrees that the shares of Common Stock issuable
upon exercise of the Option (the “Shares”) shall be subject to a right of first refusal of the
Company and its assignees, as follows:




          (a) Before any Shares may be sold or transferred (including any transfer by operation of
law), such Shares shall first be offered to the Company as follows:




               (i) The Participant shall deliver a notice (the “Notice”) to the Company stating (A) his or
her bona fide intention to sell or transfer such Shares, (B) the number of such Shares to be sold
or transferred, (C) the price for which he or she proposes to sell or transfer such Shares (such
price shall be deemed to be the fair value of such Shares as determined pursuant to paragraph
(b)(iii) hereof in the case of a transfer not involving a sale) and the terms of payment of that
price and other terms and conditions of sale, and (D) the name of the proposed purchaser or
transferee.



               (ii) Within thirty (30) days after receipt of the Notice, the Company may elect to purchase
any or all of the Shares to which the Notice refers, at the price per share and upon the terms and
conditions specified in the Notice in the case of a sale and at the fair market value of such
Shares determined pursuant to paragraph (b)(iii) hereof in the case of a transfer not involving a
sale. If the Company elects not to purchase all such Shares, the Company may assign its right to
purchase the remaining Shares. An election to purchase shall be made by written notice to the
Participant, specifying the number of shares to be purchased.



               (iii) The fair value of the Shares shall be as determined in good faith by the Company’s
Board of Directors in accordance with applicable guidelines or requirements of the California
Securities Requirements and otherwise based upon the best available information.



               (iv) if all of the Shares to which the Notice refers are not elected to be purchased, pursuant
to paragraph (b)(ii) hereof, the Participant may sell or transfer the remaining shares to any
purchaser or transferee named in the Notice at, in the case of a sale, the price specified in the
Notice or at a higher price, provided that such sale or transfer is consummated within 180 days
following receipt of the Notice by the Company and provided, further, that any such sale is in
accordance with all the terms and conditions specified in the Notice and upon the terms and
conditions hereof.



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               (v) The provisions of paragraphs (b)(i) through (b)(iv) shall not apply to a transfer of any
Shares by the Participant, either during his or her lifetime or on death by will or intestacy, to
his or her ancestors, descendants, or spouse, or any custodian or trustee for the account of the
Participant or the Participant’s ancestors, descendants, or spouse; provided, in each such case
the transferee shall receive and hold such Shares subject to the provisions of this Section
22 and there shall be no further transfer of such shares except in accordance herewith.



               (vi) Notwithstanding the above, neither the Company nor any other person shall have any right
under this Section 22 at any time after the Company becomes subject to the reporting
requirements of Section 12(g) or 15(d) of the Securities Exchange Act of 1934.



               
(vii) No Shares may be sold or transferred without full compliance with this Section
22, and any sale or transfer that is not in compliance with this Section 22 shall be
void.



          (b) All certificates representing the Shares shall have endorsed thereon substantially the following legend:





“The shares represented by this certificate are subject to a right
of first refusal option in favor of the issuer or its assignee as
set forth in the stock option plan of the issuer pursuant to which
such shares were issued, a copy of which is available at the
principal office of the issuer.”



          (c) The Company shall not be required (i) to transfer on its books any Shares which shall have been
sold or transferred in violation of any of the provisions set forth
in this Section 22, or (ii) to treat as the owner of such Shares, or to accord the right to vote as such
owner or to pay dividends to, any transferee to whom such Shares shall have been so transferred.




          23. Restricted Stock Grants. As an alternative or in addition to granting Options
under the Plan, the Board may instead offer to one or more Participants the right to purchase
shares of Common Stock subject to the condition and agreement of the Participant that the Company
shall have a repurchase option exercisable upon the voluntary or involuntary termination of the
Participant’s service with the Company for any reason (including death or disability), or upon such
additional or different events as the Board may determine. Such Common Stock is referred to as
“Restricted Stock.” Unless the Board otherwise determines, the purchase price for Restricted Stock
repurchased by the Company shall be the original price paid by the Participant. The repurchase
option of the Company shall lapse at the same rate as which shares subject to Options may become
exercisable (“vest”) under the Plan, in each case as the Board determines, subject to any
applicable requirements of the Plan with respect to the vesting rate of Options. Additionally, the
Board may permit the full exercise of an Option even though the Option is not yet exercisable in
full in accordance with its vesting schedule, subject to the condition and agreement of the
Optionee that the Company shall have the right to repurchase the Common Stock issued upon exercise
of the Option, at the same option exercise price per share being paid pursuant to the exercise, at
any time when the exercise rights of the Optionee under the Option would have terminated in
accordance with the original terms of the Option and the Plan; provided, however, that in such case
the repurchase right of the Company shall only apply to that portion of the Shares which the
Participant would not have had the right to acquire by exercise, pursuant to the original terms and
vesting schedule of the




Page 10 of 11









 




Option, immediately prior to such termination. Shares issued upon Option exercise pursuant to the
preceding sentence shall similarly be referred to as “Restricted Stock.” All shares of Restricted
Stock shall be issued pursuant to a form of agreement established by the Board which sets forth the
provisions of this paragraph in greater detail and provides for an escrow of the Restricted Stock
to support the repurchase right of the Company. Shares issued as Restricted Stock pursuant to this
paragraph shall be deemed shares issued pursuant to, and subject to the applicable provisions of,
the Plan.




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Exhibit A-1




LOOPNET, INC.




INCENTIVE STOCK OPTION




Optionee:





No. of Shares:





Option Price:





Vesting Commencement Date:                                        , 20__




	 	 	 
	Vesting of Option:

	 	One-fourth (1/4) on the first
anniversary of the Vesting
Commencement Date, and as to the
balance in 36 equal monthly
installments following such first
anniversary date, subject to
continuous employment (See Sections
3(b) and 4 below and see the Plan).
	 
	 	 
	Termination of Option:

	 	60 days after termination of
employment or ten years after Vesting
Commencement Date, whichever occurs
first. Special rules apply to death or
disability and in certain other
circumstances. (See Section 2 below
and see the Plan).






Reference Date of this Option:                                        , 20__




Execution of this Option on behalf of LOOPNET, INC.:



By:                                         



Title:                                        




          THIS OPTION is granted by LoopNet, Inc., a California corporation (the “Company”), to
the Optionee indicated at the top of this page (the “Optionee”). Under the 2001 Stock Option
Plan (the “Plan”), the Board of Directors or a duly authorized committee thereof has authorized
the grant to the Optionee of an incentive stock option to purchase shares of the Common Stock
of the Company under the terms and conditions of this Option. This Option is intended to be,
and is designated as, an Incentive Stock Option under the Plan. This Option consists of seven
numbered paragraphs, and has been executed by the Company at the top of this page.





Page 1 of 4









 








Exhibit A-1




          1.
Option; Number of Shares; Price.




          The Company grants to the Optionee the right (“Option”) to purchase all or any portion of the
number of shares of the Common Stock of the Company indicated at the top of this page (“Stock”) at
the purchase price per share indicated at the top of this page (the “Option Price”). This Option
is subject to the terms and conditions stated herein and in the Plan, including but not limited to
the provisions of the Plan under which this Option shall be subject to modification if and when
certain events occur.




          2. Termination of Option.




               This Option shall expire when the first of the following occurs:



               (a) the tenth anniversary date of the Vesting Commencement Date indicated at the top of the first page of this Option;



               (b) the expiration of 60 days from the date of the Optionee’s termination of employment, either voluntary or involuntary and either with
or without cause (other than by reason of death), except that if the
Optionee is then disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code), the expiration of one year from the date of the Optionee’s termination
of employment;



               (c) the expiration of one year from the date the Optionee dies if the Optionee dies while the Optionee is employed by the Company or any of its subsidiaries; or



               (d) the termination of the Option under the Plan.



          3. Exercise and Vesting of Option.




               This Option may be exercised by the Optionee (or, after the Optionee’s death, by the
person designated in Section 5) only in accordance with the following provisions:



               (a) This Option may be exercised by the Optionee, to the extent it has become vested in
accordance with paragraph (b) below, upon delivery of the following to the Company at its
principal executive offices:



                    (i) a written notice of exercise (which the Company may require to
be in the form of Exhibit C to the Plan) which identifies this Option and states the number of
shares of Stock then being purchased;



                    (ii) a check or cash in the amount of the purchase price (or payment
of the purchase price in such other form of lawful consideration as the Company’s Board of
Directors may approve from time to time under the provisions of the Plan);




Page 2 of 4









 








Exhibit A-1




                    (iii) a letter or agreement, if requested by the Company, in such
form and substance as the Company may require, setting forth and confirming the investment intent
of the Optionee and such other agreements, undertakings, restrictions and representations as are
described in the Plan, including the “lock-up” provision in Section 21 of the Plan and the right
of first refusal provisions in Section 22 of the Plan; and



                    (iv) a check or cash, if requested by the Company either before or
after the Company’s receipt of the notice of exercise, in the amount of any taxes (other than
stock issue or transfer taxes) which the Company is obligated to collect or withhold by reason of
the exercise of this Option.



               (b) This Option shall become exercisable (“vest”) as to one-fourth (1/4) of the Stock on the
first anniversary date of the Vesting Commencement Date, which is indicated at the top of the
first page of this Option, and thereafter as to the balance in 36 equal monthly installments
following such first anniversary date, subject to continuous employment of the Optionee by the
Company through and including the time of each vesting.



                    The installments shall be cumulative, such that this Option may be
exercised as to any or all of the Stock covered by an installment at any time or times after that
installment becomes exercisable and until this Option expires or terminates.



          4. Vesting Ceases Upon Termination of Employment.




               The termination of the employment of the Optionee by death, disability or otherwise shall not
accelerate or otherwise affect the number of shares with respect to which this Option may be
exercised, and this Option may only be exercised with respect to that number of shares which could
have been purchased under this Option if this Option had been exercised by the Optionee on the date
of termination.



          5. Nontransferability of Option




               The rights of the Optionee under this Option may not be assigned or transferred except by
will or by the laws of descent and distribution. This Option shall be exercisable only by the
Optionee during the Optionee’s lifetime. Any attempt to assign this Option in contravention of
this Option shall be void and shall have no effect. If the Optionee should die while the Optionee
is employed by the Company or a subsidiary, the Optionee’s legal representative, the Optionee’s
legatee, or the person who acquired the right to exercise this Option by reason of the death of
the Optionee (this group shall be collectively known as “successors”) succeeds to the Optionee’s
rights under this Option. After the death of the Optionee, only the Optionee’s successors may
exercise this Option.




Page 3 of 4









 








Exhibit A-1




          6. No Rights as a Shareholder.




               The Optionee shall have no rights as a shareholder of any shares of Stock covered by this
Option until the date of issuance of a stock certificate to the Optionee. Except as may be
provided under the Plan, the Company will make no adjustment for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions or other rights for
which the record date is prior to the date the stock certificate is issued.



          7. This Option Subject to Plan.




               This Option is granted under the provisions of the Plan and shall be interpreted in a manner
consistent with it. Any provision in this Option inconsistent with the Plan shall be superseded
and governed by the Plan. A copy of the Plan is available to the Optionee at the Company’s
principal executive offices upon request and without charge.



          BY ACCEPTING THIS OPTION THE OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF THIS OPTION
WILL BE EARNED ONLY BY CONTINUING EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF
BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). THE OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY’S STOCK OPTION PLAN
WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON THE OPTIONEE ANY RIGHT WITH RESPECT TO
CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE OPTIONEE’S
RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE OPTIONEE’S EMPLOYMENT AT ANY TIME, WITH OR WITHOUT
CAUSE.





Page 4 of 4









 








Exhibit B




LOOPNET, INC.




 Acknowledgment of Stock Option Grant




          I have been advised by LoopNet, Inc. (the “Company”) that I have been granted a
stock option (the “Option”), dated for reference
purposes
                    , 20___, to purchase up to                     
shares of Common Stock of the Company (the “Shares”) under the Company’s 2001
Stock Option Plan (the “Plan”). I acknowledge and agree with the Company as follows:




          (1) I have received the written Option and a copy of the Plan, and I agree to be
bound by the terms and conditions of both the Option and the Plan.




          (2) Without limiting the preceding paragraph, I specifically acknowledge and
agree that any and all of the Shares, if and when issued upon exercise of the Option, will be subject
to the “lock-up” provisions of Section 21 of the Plan and will be subject to the right of first refusal
provisions of Section 22 of the Plan. I understand that the “lock-up” provisions of Section 21 of the
Plan will generally prohibit any sale of the Shares by me for a period of up to one hundred eighty
(180) days following any registration of shares by the Company for a public offering, and that the
right of first refusal provisions of Section 22 of the Plan give the Company a 30-day right of first
refusal to purchase any of the Shares before I may sell or transfer them to any other party.




          (3) I acknowledge and agree that, if and when any Shares are issued upon exercise
of the Option, the Company may place legends on the certificates representing the Shares confirming
the various restrictions on transfer contained in the Plan or as required under federal and state
securities laws, including legends referring to the lock-up, purchase option and right of first refusal
provisions described in the preceding paragraph.




          (4) I understand and agree that the Company may, as a condition to any exercise
of the Option and the issuance of any certificate representing the Shares, require my written
confirmation of the above matters and such additional requirements as are described in the Plan.




	 	 	 
	Dated:                                        , 20___

	 	                                                                                                                        
	 

	 	(Signature of Optionee)







Page 1 of 1









 








Exhibit C




LOOPNET, INC.




Notice of Option Exercise




                                        , 20___




LOOPNET, INC. 

Attn: Corporate Secretary




     1. Exercise
of Option. Effective as of today, I hereby elect to purchase
______ shares of Common Stock (the “Shares”) of LoopNet, Inc. (the “Company”) under and pursuant to the
2001 Stock Option Plan (the “Plan”) and the stock option
(the “Option”), dated for reference purposes ______, 20______, previously granted to me under the Plan. The exercise price
under the Option is $______ per share and,
accordingly, I have delivered to the Company my check in the amount of $___ representing the aggregate exercise price for the Shares.



     2. Investment Representations. I am aware of the Company’s business affairs and
financial condition and I have acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Shares. I am acquiring the Shares for
investment for my own account only and not with a view to, or for
resale in connection with, any
“distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities
Act”). I acknowledge and understand that the Shares constitute “restricted securities” under the
Securities Act and have not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona fide nature of
my investment intent as expressed herein. I further understand that the Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or an exemption from
such registration is available. I further acknowledge and understand that the Company is under no
obligation to register the Shares.



     3. Further Representations. I acknowledge that I have received, read and understand
the Option and the Plan and I agree to abide by and be bound by the terms and conditions of both
the Option and the Plan. Without limiting the preceding sentence, I specifically acknowledge and
agree that all of the Shares will be subject to the “lock-up” provisions of Section 21 of the Plan
and the right of first refusal provisions of Section 22 of the Plan. I understand that the “lock-up”
provisions of Section 21 of the Plan will generally prohibit any sale of the Shares by me for a period of
up to one hundred eighty (180) days following any registration of shares by the Company for a public
offering, and that the right of first refusal provisions of Section 22 of the Plan give the Company a
30-day right of first refusal to purchase any of the Shares before I may sell or transfer them to any other party.



     4. Restrictive Legends and Stop-Transfer Orders. I understand and agree that the
Company shall cause the legends set forth below (or legends substantially equivalent thereto) to be
placed upon the certificates(s) evidencing ownership of the Shares, together with any other legends
that may be required by the Company or by state or federal securities laws:




Page 1 of 2









 









Exhibit C





THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS. THEY MAY NOT BE OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.




THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF
FIRST REFUSAL OPTION IN FAVOR OF THE ISSUER OR ITS ASSIGNEE AS SET
FORTH IN THE STOCK OPTION PLAN OF THE ISSUER PURSUANT TO WHICH SUCH
SHARES WERE ISSUED, A COPY OF WHICH IS AVAILABLE AT THE PRINCIPAL
OFFICE OF THE ISSUER.



     I further agree that, in order to ensure compliance with the restrictions and provisions
referred to above and in the Plan, the Company may issue appropriate “stop transfer” instructions
to its transfer agent, if any, and that if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records. I agree that the Company shall not be
required (a) to transfer on its books any of the Shares that have been sold or otherwise
transferred in violation of any of the provisions of the Option, the Plan or this Notice of Option
Exercise, or (b) to treat as owner of such Shares, or to accord the right to vote or pay dividends
to, any purchaser or other transferee to whom such Shares shall have been so transferred.



     5. Entire Agreement. The Option and the Plan are incorporated herein by reference.
This Notice of Option Exercise, together with the Option and the Plan, constitute the entire
agreement between the Company and me with respect to this exercise of the Option and supersede in
their entirety all prior understandings and agreements between the Company and me with respect
thereto, and may not be modified except only by a writing signed by both the Company and me.



	 	 	 
	 

	 	Respectfully Submitted,
	 

	 	 
	 

	 	 
	 

	 	(Signature of Exercising Optionee)






Page 2 of 2