Exhibit 10.6


 


Notice of Stock Option Award Granted Under the 

TREE.COM, INC.


2008 STOCK AND ANNUAL INCENTIVE
PLAN


 


	
  Award
  Recipient:

  	
   

  	
  [Last Name, First Name]

  
	
   

  	
   

  	
   

  
	
  2008 Stock Option Award:

  	
   

  	
  Stock options to acquire             
  shares of Tree.com common stock at an exercise price of $per share (“Stock Options”) under
  the Tree.com, Inc. 2008 Stock and Annual Incentive Plan (the “2008
  Plan”). Capitalized terms used (but not defined) in this Award Notice shall
  have the meanings set forth in the 2008 Plan.

  
	
   

  	
   

  	
   

  
	
  Award Date

  	
   

  	
  [                    ]

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  Subject to your continued employment with Tree.com or its
  Subsidiaries, your Stock Options shall, subject to the provisions of the 2008
  Plan, vest and no longer be subject to any restriction as follows: [                ]

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  Once
  vested, your Stock Options will expire upon the earlier of (i) the expiration
  of the 90-day period following your Termination of Employment for any reason
  other than death, Disability or Retirement, (ii) the expiration of the
  one-year period following your Termination of Employment due to death,
  Disability or Retirement or (iii) 10 years from your Award Date (the
  “Expiration Date”), except as otherwise provided in the 2008 Plan or the
  attached Terms and Conditions.

   

  If
  you do not exercise your vested Stock Options before the Expiration Date,
  your Stock Options will be forfeited and canceled in their entirety.

  
	
   

  	
   

  	
   

  
	
  Impact of a Termination of Employment:

  	
   

  	
  Except as otherwise provided in the 2008 Plan, all of your unvested
  Stock Options will be forfeited and canceled in their entirety upon a
  Termination of Employment by Tree.com.

  
	
   

  	
   

  	
   

  
	
  Terms and Conditions:

  	
   

  	
  Your Stock Options are subject to the Terms and Conditions attached
  hereto and to the 2008 Plan, which are posted on www.benefitaccess.com and
  incorporated herein by reference. Copies of these documents are also
  available upon request from your Human Resources Department.

   

  Without a complete review of these documents, you will not have a
  full understanding of all the material terms of your Stock Options.

  



 


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Terms and Conditions for Stock
Option Awards


 


Overview


 


These Terms and Conditions apply to the option granted
to you by Tree.com, Inc. (“Tree.com” or the “Company”) pursuant to Section 5 of
the Tree.com, Inc. 2008 Stock and Annual Incentive Plan (the “Plan”) of the
right and option (the “Stock Options”) to purchase the number of shares of
common stock of the Company, par value $0.01 per share (the “Common Stock”),
set forth in your award notice (the “Award Notice”) at the exercise price per
share set forth in the Award Notice.  The
Stock Option shall be a Nonqualified Stock Option.  Unless earlier terminated pursuant to the
terms of your Award Notice, these Terms and Conditions or the Plan, the Stock
Options shall expire within ten years of your Award Date.


 


ALL CAPITALIZED TERMS USED
HEREIN, TO THE EXTENT NOT DEFINED, SHALL HAVE THE MEANINGS SET FORTH IN THE
PLAN.


 


Continuous
Service


 


In order for your Stock Options
to vest, you must be continuously employed by Tree.com or any of its
Subsidiaries or Affiliates during the Restriction Period (as defined
below).  Nothing in your Award Notice,
these Terms and Conditions or the Plan shall confer upon you any right to
continue in the employ or service of Tree.com or any of its Subsidiaries or
Affiliates or interfere in any way with their rights to terminate your
employment or service at any time.


 


Vesting


 


Subject
to the Award Notice, these Terms and Conditions and the Plan, your Stock
Options shall vest and become exercisable (such period prior to vesting is the “Restriction
Period”) as follows:


 


	
  Vesting Date

  	
   

  	
  Percentage of the Stock Option

  Award Vesting

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


Method of
Exercise of the Stock Options and Payment of the Exercise Price


 


The portion of your Stock Options that are vested
shall be exercisable by delivery to the Company or the agent selected by
Tree.com to administer the Plan (the “Agent”) of a written (including by way of
electronic means) notice stating the number of whole shares to be purchased
pursuant to these Terms and Conditions and accompanied by payment of the full
purchase price of the shares of Common Stock to be purchased.  Your Stock Options may not be exercised at
any one time as to fewer than 100 shares (or such number of shares as to which
the Stock Options are then exercisable if less than 100).  Fractional share interests shall be
disregarded except they may be accumulated.


 


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The exercise price of the Stock Options shall be paid:
(i) in cash or by certified check or bank draft payable to the order of
the Company; (ii) by exchange of shares of unrestricted Common Stock of the
Company already owned by you and having an aggregate Fair Market Value equal to
the aggregate purchase price (which amount shall be equal to the product of the
exercise price multiplied by the number of shares of Common Stock in respect of
which the Stock Options are being exercised); provided, that you represent and
warrant to the Company that you hold the shares of Common Stock free and clear
of liens and encumbrances; (iii) by delivering, along with a properly executed
exercise notice to the Company, a copy of irrevocable instructions to a broker
to deliver promptly to the Company the aggregate exercise price and the amount
of any applicable federal, state, local or foreign withholding taxes required
to be withheld by the Company; provided, however, that such exercise must be
implemented solely under a program or arrangement established and approved by
the Company with a brokerage firm selected by the Company; or (iv) by any other
procedure approved by the Committee, or by a combination of the foregoing.


 


Termination of Employment


 


The treatment of your
Stock Options upon the termination of your employment is set forth in your
Award Notice, the remainder of this “Termination of Employment” section and the
Plan.  For the avoidance of doubt,
transfers of employment among the Company and its Subsidiaries and Affiliates,
without any break in service, is not a Termination of Employment.  Except as set forth below, upon a Termination
of Employment, all vested Stock Options may be exercised prior to the first to
occur of (a) the 90th day after such Termination of Employment or (b)
expiration of the option grant.


 


If your employment is
terminated by Tree.com or any of its Subsidiaries or Affiliates for Cause, or
if following any Termination of Employment between you and Tree.com or any of
its Subsidiaries or Affiliates for any reason Tree.com determines that during
the two (2) years prior to such Termination of Employment there was an event or
circumstance that would have been grounds for termination for Cause, all of
your Stock Options (whether or not vested) shall be forfeited and canceled in
their entirety upon such termination.  In
the event you exercised your Stock Options upon your Termination of Employment
for Cause or after an event that would be grounds for a Termination of Employment
for Cause, the Company shall be entitled to recover from you at any time within
two (2) years after such exercise, and you shall pay over to the Company, any
gain realized as a result of the exercise. This remedy shall be without
prejudice to, or waiver of, any other remedies Tree.com or its Subsidiaries or
Affiliates may have in such event.


 


In the event of a Termination of Employment due to
your death (or, in the event of your death following a Termination of
Employment while the Stock Options remain exercisable) that portion of the Stock
Options, if any, which is exercisable at the time of death may be exercised by
your estate or by a person who acquired the right to exercise such Stock
Options by bequest or inheritance or otherwise by reason of your death at any
time prior to the first to occur of (a) one (1) year after the date of death or
(b) expiration of the option grant.  In
the event of a Termination of Employment due to your Disability or Retirement,
that portion of the Stock Option, if any, which is exercisable at the time of
such Termination of Employment for Disability or Retirement may be exercised by
you or your guardian or legal representative at any time prior to the first to
occur of (a) one (1) year after such Termination of Employment or (b) expiration
of the option grant.


 


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Taxes
and Withholding


 


No later than the date of exercise of the Stock
Options granted hereunder (or such earlier date as of which an amount in
respect of the Stock Options first becomes includible in your gross income for
federal, state, local or foreign income or employment or other tax purposes),
you shall pay to the Company or make arrangements satisfactory to the Committee
regarding payment of any federal, state, local or foreign taxes of any kind required
by law to be withheld upon the exercise of your Stock Options and the Company
shall, to the extent permitted or required by law, have the right to deduct
from any payment of any kind otherwise due to you (either directly or
indirectly through its agent), federal, state, local and foreign taxes of any
kind required by law to be withheld upon the exercise of your Stock
Options.  Notwithstanding the foregoing,
the Company shall be entitled to hold the shares issuable to you upon exercise
of your Stock Options until the Company or the Agent has received from you (i) a
duly executed Form W-9 or W-8, as applicable and (ii) payment for any federal,
state, local or foreign taxes of any kind required by law to be withheld with
respect to such Stock Options.


 


Adjustment in the Event of Change in Stock; Change
in Control


 


Adjustment
in the Event of Change in Stock.  In
the event of (i) a stock dividend, stock split, reverse stock split, share
combination, or recapitalization or similar event affecting the capital
structure of Tree.com (each, a “Share Change”), or (ii) a merger,
consolidation, acquisition of property or shares, separation, spin-off,
reorganization, significant non-recurring cash dividend, stock rights offering,
liquidation, Disaffiliation, or similar event affecting Tree.com or any of its
Subsidiaries (each, a “Corporate Transaction”), the Committee or the Board
shall make such substitutions or adjustments as it, in its good faith and sole
discretion, deems appropriate and equitable to the number and kind of shares of
Common Stock subject to your Stock Options and/or the exercise price per
share.  The determination of the
Committee regarding any such adjustment will be final and conclusive and need
not be the same for all Stock Option award recipients.


 


Change in Control.  In the event you cease to be employed by
either Tree.com or any of its Subsidiaries or Affiliates within the two (2) year
period following a Change in Control of Tree.com (and not any of its
Subsidiaries or Affiliates) as a result of (i) a termination by Tree.com or any
of its Subsidiaries or Affiliates without Cause, (ii) your death or Disability
or (iii) a resignation by you for Good Reason (as defined in Section 10 of the
Plan), then upon the occurrence of such Termination of Employment, 100% of your
unvested Stock Options shall automatically vest.  In addition,  following  a Termination of Employment under these circumstances, your
Stock Options will expire upon the later of (i) the last date on which your
Stock Options would be exercisable in the absence of a Change in Control and (ii)
the earlier of (A) the first anniversary of the Change in Control and (B) expiration
of the option grant.  The Disaffiliation
of the Subsidiary or Affiliate of Tree.com by which you are employed or for
which you are performing services at the time of such sale or other disposition
by Tree.com shall be considered a Termination of Employment (not a Change in
Control) and shall be governed by the applicable provisions of the Plan and the
provision set forth under the caption “Termination of Employment” above;
provided that the Committee or the Board may deem it appropriate to make an
equitable adjustment to your Stock Options.


 


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Non-Transferability of Stock Options


 


Your Stock Options are non-transferable (including by
way of sale, assignment, exchange, encumbrance, pledge, hedge or otherwise) by
you other than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order, and your Stock Options may be exercised,
during your lifetime, only by you or by your guardian or legal representative
or any transferee described above.


 


No Rights as a Stockholder


 


Neither you nor any
transferee of your Stock Options shall have rights as a stockholder (including
the right to vote the shares underlying your Stock Options and the right to
receive dividends, except as provided above or in the Plan) with respect to any
shares covered by such Stock Options until you or your transferee (i) has given
written notice of exercise, (ii) if requested, has given the representation
described in Section 14(a) of the Plan and (iii) has paid in full for the
shares issuable upon exercise.


 


Payment of Transfer Taxes, Fees
and Other Expenses


 


The Company agrees to pay any and all original issue
taxes and stock transfer taxes that may be imposed on the issuance of shares
acquired pursuant to exercise of your Stock Options, together with any and all
other fees and expenses necessarily incurred by the Company in connection
therewith.  Notwithstanding the
foregoing, you shall be solely responsible for any other taxes (including,
without limitation, federal, state, local or foreign income, social security,
estate or excise taxes) that may be payable as a result of your participation
in the Plan or as a result of the exercise of your Stock Options and/or the
sale, disposition or transfer of any shares of Common Stock acquired upon the
exercise of your Stock Options.


 


Other Restrictions


 


The exercise of your Stock Options shall be subject to
the requirement that, if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of Common Stock subject or
related thereto upon any securities exchange or under any state or federal law,
or (ii) the consent or approval of any government regulatory body is necessary
or desirable as a condition of, or in connection with, such exercise or the
delivery or purchase of shares pursuant thereto, then in any such event, the
exercise shall not be effective unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.


 


Conflicts
and Interpretation


 


In the event of any
conflict between these Terms and Conditions and the Plan, the Plan shall
control; provided, that an action or provision that is permissive under the
terms of the Plan, and required under these Terms and Conditions, shall not be
deemed a conflict and these Terms and Conditions shall control. In the event of
any ambiguity in these Terms and Conditions, or any matters as to which these
Terms and Conditions are silent, the Plan shall govern including, without
limitation, the provisions thereof pursuant to which the Committee has the
power, among others, to (i) interpret the Plan, (ii) prescribe, amend and
rescind rules and regulations relating to the Plan and (iii) make all other
determinations deemed necessary or advisable for the administration of the
Plan.  In the event of any conflict
between your Award Notice (or any other information posted on Tree’s intranet
or given to you directly or indirectly through the Agent (including information
posted on www.benefitaccess.com)) and Tree’s books
and records, or (ii)


 


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ambiguity in the
Award Notice (or any other information given to you directly or indirectly
through the Agent (including information posted on www.benefitaccess.com)),
Tree’s books and records shall control.


 


Amendment


 


Tree.com may modify,
amend or waive the terms of your Stock Options, prospectively or retroactively,
but no such modification, amendment or waiver shall materially impair your
rights without your consent, except as required by applicable law, NASDAQ or
stock exchange rules, tax rules or accounting rules.  The waiver by either party of compliance with
any provision of these Terms and Conditions shall not operate or be construed
as a waiver of any other provision hereof.


 


Data Protection


 


The
acceptance of your Stock Options constitutes your authorization of the
release from time to time to Tree.com or any of its Subsidiaries or Affiliates
and to the Agent (together, the “Relevant Companies”) of any and all personal
or professional data that is necessary or desirable for the administration of
your Stock Options and/or the Plan (the “Relevant Information”).  Without limiting the above, this
authorization permits your employing company to collect, process, register and
transfer to the Relevant Companies all Relevant Information (including any
professional and personal data that may be useful or necessary for the purposes
of the administration of your Stock Options and/or the Plan and/or to implement
or structure any further grants of equity awards (if any)).  The acceptance of your Stock Options also
constitutes your authorization of the transfer of the Relevant Information to
any jurisdiction in which Tree.com, your employing company or the Agent
considers appropriate.  You shall have
access to, and the right to change, the Relevant Information, which will only
be used in accordance with applicable law.


 


Notification of Changes


 


Any changes to these
Terms and Conditions shall either be posted on Tree’s intranet and www.benefitaccess.com
or communicated (either directly by Tree.com or indirectly
through any of its Subsidiaries, Affiliates or the Agent) to you electronically
via e-mail (or otherwise in writing) promptly after such change becomes
effective.


 


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