exv10w5






Exhibit 10.5




QuinStreet, Inc.




2010 Equity Incentive Plan




Adopted by the Board of Directors: November 17, 2009

Approved by the Stockholders:                     , 2010




1. General.




     (a) Successor to and Continuation of Prior Plan. The Plan is intended as the successor to and
continuation of the QuinStreet, Inc. 2008 Equity Incentive Plan (the “Prior Plan”). Following the
Effective Date, no additional stock awards shall be granted under the Prior Plan. Any shares
remaining available for future issuance of stock awards under the Prior Plan as of the Effective
Date (the “Prior Plan’s Available Reserve”) shall become available for issuance pursuant to Stock
Awards granted hereunder. From and after the Effective Date, all outstanding stock awards granted
under the Prior Plan shall remain subject to the terms of the Prior Plan; provided, however, any
shares underlying outstanding stock awards granted under the Prior Plan that expire or terminate
for any reason prior to exercise or settlement or are forfeited because of the failure to meet a
contingency or condition required to vest such shares (the “Returning Shares”) shall become
available for issuance pursuant to Awards granted hereunder. All Awards granted on or after the
Effective Date of this Plan shall be subject to the terms of this Plan.



     (b) Eligible Award Recipients. The persons eligible to receive Awards are Employees,
Directors and Consultants.



     (c) Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights (iv) Restricted
Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance
Cash Awards, and (viii) Other Stock Awards.



     (d) Purpose. The Company, by means of the Plan, seeks to secure and retain the services of
the group of persons eligible to receive Awards as set forth in Section 1(b), to provide incentives
for such persons to exert maximum efforts for the success of the Company and any Affiliate and to
provide a means by which such eligible recipients may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Awards.



2. Administration.




     (a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c).



     (b) Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:



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          (i) To determine from time to time (A) which of the persons eligible under the Plan shall be
granted Awards; (B) when and how each Award shall be granted; (C) what type or combination of types
of Award shall be granted; (D) the provisions of each Award granted (which need not be identical),
including the time or times when a person shall be permitted to receive cash or Common Stock
pursuant to a Stock Award; (E) the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person; and (F) the Fair Market Value applicable to a Stock
Award.




          (ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement or in
the written terms of a Performance Cash Award, in a manner and to the extent it shall deem
necessary or expedient to make the Plan or Award fully effective.




          (iii) To settle all controversies regarding the Plan and Awards granted under it.




          (iv) To accelerate the time at which an Award may first be exercised or the time during which
an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions
in the Award stating the time at which it may first be exercised or the time during which it will
vest.




          (v) To suspend or terminate the Plan at any time. Suspension or termination of the Plan shall
not impair rights and obligations under any Award granted while the Plan is in effect except with
the written consent of the affected Participant.




          (vi) To amend the Plan in any respect the Board deems necessary or advisable, including,
without limitation, by adopting amendments relating to Incentive Stock Options and certain
nonqualified deferred compensation under Section 409A of the Code and/or to bring the Plan or
Awards granted under the Plan into compliance therewith, subject to the limitations, if any, of
applicable law. However, except as provided in Section 9(a) relating to Capitalization Adjustments,
to the extent required by applicable law or listing requirements, stockholder approval shall be
required for any amendment of the Plan that either (A) materially increases the number of shares of
Common Stock available for issuance under the Plan, (B) materially expands the class of individuals
eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to
Participants under the Plan or materially reduces the price at which shares of Common Stock may be
issued or purchased under the Plan, (D) materially extends the term of the Plan, or (E) expands the
types of Awards available for issuance under the Plan. Except as provided above, rights under any
Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (1) the Company requests the consent of the affected Participant, and (2) such Participant
consents in writing.




          (vii) To submit any amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of (A) Section 162(m) of the Code
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to Covered Employees, (B) Section 422 of the Code regarding “incentive stock
options” or (C) Rule 16b-3.




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          (viii) To approve forms of Award Agreements for use under the Plan and to amend the terms of
any one or more Awards, including, but not limited to, amendments to provide terms more favorable
to the Participant than previously provided in the Award Agreement, subject to any specified limits
in the Plan that are not subject to Board discretion; provided however, that except with respect to
amendments that disqualify or impair the status of an Incentive Stock Option, a Participant’s
rights under any Award shall not be impaired by any such amendment unless (A) the Company requests
the consent of the affected Participant, and (B) such Participant consents in writing.
Notwithstanding the foregoing, subject to the limitations of applicable law, if any, the Board may
amend the terms of any one or more Awards without the affected Participant’s consent if necessary
to maintain the qualified status of the Award as an Incentive Stock Option or to bring the Award
into compliance with Section 409A of the Code.




          (ix) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company and that are not in conflict with the
provisions of the Plan or Awards.




          (x) To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Directors or Consultants who are foreign nationals or
employed outside the United States.




          (xi) To effect, at any time and from time to time, with the consent of any adversely affected
Participant, (A) the reduction of the exercise price (or strike price) of any outstanding Option or
SAR under the Plan; (B) the cancellation of any outstanding Option or SAR under the Plan and the
grant in substitution therefor of (1) a new Option or SAR under the Plan or another equity plan of
the Company covering the same or a different number of shares of Common Stock, (2) a Restricted
Stock Award, (3) a Restricted Stock Unit Award, (4) an Other Stock Award, (5) cash and/or (6) other
valuable consideration (as determined by the Board, in its sole discretion); or (C) any other
action that is treated as a repricing under generally accepted accounting principles.




     (c) Delegation to Committee.



          (i) General. The Board may delegate some or all of the administration of the Plan to a
Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers theretofore possessed by
the Board that have been delegated to the Committee, including the power to delegate to a
subcommittee of the Committee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the
Plan, as may be adopted from time to time by the Board. The Board may retain the authority to
concurrently administer the Plan with the Committee and may, at any time, revest in the Board some
or all of the powers previously delegated.




          (ii) Section 162(m) and Rule 16b-3 Compliance. The Committee may consist solely of two or
more Outside Directors, in accordance with Section 162(m) of the Code, or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3.




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     (d) Effect of Board’s Decision. All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.



3. Shares Subject to the Plan.




     (a) Share Reserve. Subject to Section 9(a) relating to Capitalization Adjustments, the
aggregate number of shares of Common Stock of the Company that may be issued pursuant to Stock
Awards after the Effective Date shall not exceed          
             shares, which number is the sum of
(i) the number of shares subject to the Prior Plan’s Available Reserve plus (ii) the Returning
Shares, if any, as such shares become available from time to time. In addition, the number of
shares of Common Stock available for issuance under the Plan shall automatically increase on July
1st of each year for a period of nine years commencing on July 1, 2010 and ending on (and
including) July 1, 2019, in an amount equal to five percent (5%) of the total number of shares of
Common Stock outstanding on June 30th of the preceding fiscal year. Notwithstanding the foregoing,
the Board may act prior to the first day of any fiscal year, to provide that there shall be no
increase in the share reserve for such fiscal year or that the increase in the share reserve for
such fiscal year shall be a lesser number of shares of Common Stock than would otherwise occur
pursuant to the preceding sentence. For clarity, the limitation in this Section 3(a) is a
limitation in the number of shares of Common Stock that may be issued pursuant to the Plan.
Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in
Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted by, as
applicable, NASDAQ Marketplace Rule 4350(i)(1)(A)(iii), NYSE Listed Company Manual Section 303A.08,
AMEX Company Guide Section 711 or other applicable stock exchange rules, and such issuance shall
not reduce the number of shares available for issuance under the Plan. Furthermore, if a Stock
Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered
by such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives
cash rather than stock), such expiration, termination or settlement shall not reduce (or otherwise
offset) the number of shares Common Stock that may be available for issuance under the Plan.



     (b) Reversion of Shares to the Share Reserve. If any shares of common stock issued pursuant
to a Stock Award are forfeited back to the Company because of the failure to meet a contingency or
condition required to vest such shares in the Participant, then the shares that are forfeited shall
revert to and again become available for issuance under the Plan. Any shares reacquired, withheld,
or not issued by the Company pursuant to Section 8(g) or as consideration for the exercise of an
Option shall again become available for issuance under the Plan. For the avoidance of doubt, if an
appreciation distribution in respect of a Stock Appreciation Right is paid in shares of Common
Stock, the number of shares subject to the Stock Award that are not delivered to the Participant
shall remain available for subsequent issuance under the Plan.



     (c) Incentive Stock Option Limit. Notwithstanding anything to the contrary in this Section 3
and, subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the
aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of
Incentive Stock Options shall be
          
           shares of Common Stock.



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     (d) Source of Shares. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the Company on the open market
or otherwise.



4. Eligibility.




     (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such
terms are defined in Sections 424(e) and (f) of the Code). Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants; provided, however, Nonstatutory
Stock Options and SARs may not be granted to Employees, Directors and Consultants who are providing
Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405, unless
the stock underlying such Stock Awards is treated as “service recipient stock” under Section 409A
of the Code because the Stock Awards are granted pursuant to a corporate transaction (such as a
spin off transaction) or unless such Stock Awards comply with the distribution requirements of
Section 409A of the Code.



     (b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive
Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value on the date of grant and the Option is not exercisable after the expiration
of five (5) years from the date of grant.



5. Provisions Relating to Options and Stock Appreciation Rights.




     Each Option or SAR shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options
or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates shall be issued for shares of Common Stock purchased on exercise of
each type of Option. If an Option is not specifically designated as an Incentive Stock Option, then
the Option shall be a Nonstatutory Stock Option. The provisions of separate Options or SARs need
not be identical; provided, however, that each Option Agreement or Stock Appreciation Right
Agreement shall conform to (through incorporation of provisions hereof by reference in the
applicable Award Agreement or otherwise) the substance of each of the following provisions:



     (a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no
Option or SAR shall be exercisable after the expiration of ten (10) years from the date of its
grant or such shorter period specified in the Award Agreement.



     (b) Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent
Stockholders, the exercise price (or strike price) of each Option or SAR shall be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option or SAR on
the date the Option or SAR is granted. Notwithstanding the foregoing, an Option or SAR may be
granted with an exercise price (or strike price) lower than one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Option or SAR if such Option or SAR is granted
pursuant to an assumption of or substitution for another option or stock appreciation right
pursuant to a Corporate Transaction and in a manner consistent with the



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provisions of Sections 409A and, if applicable, 424(a) of the Code. Each SAR will be
denominated in shares of Common Stock equivalents.



     (c) Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the
exercise of an Option shall be paid, to the extent permitted by applicable law and as determined by
the Board in its sole discretion, by any combination of the methods of payment set forth below.
The Board shall have the authority to grant Options that do not permit all of the following methods
of payment (or otherwise restrict the ability to use certain methods) and to grant Options that
require the consent of the Company to utilize a particular method of payment. The permitted
methods of payment are as follows:



          (i) by cash, check, bank draft or money order payable to the Company;




          (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of the stock subject to the Option, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;




          (iii) by delivery to the Company (either by actual delivery or attestation) of shares of
Common Stock;




          (iv) if the option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to
which the Company will reduce the number of shares of Common Stock issuable upon exercise by the
largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise
price; provided, however, that the Company shall accept a cash or other payment from the
Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by
such reduction in the number of whole shares to be issued; provided, further, that shares of Common
Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent
that (A) shares issuable upon exercise are reduced to pay the exercise price pursuant to the “net
exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares
are withheld to satisfy tax withholding obligations; or




          (v) in any other form of legal consideration that may be acceptable to the Board.




     (d) Exercise and Payment of a SAR. To exercise any outstanding Stock Appreciation Right, the
Participant must provide written notice of exercise to the Company in compliance with the
provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. The
appreciation distribution payable on the exercise of a Stock Appreciation Right will be not greater
than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the
exercise of the Stock Appreciation Right) of a number of shares of Common Stock equal to the number
of Common Stock equivalents in which the Participant is vested under such Stock Appreciation Right,
and with respect to which the Participant is exercising the Stock Appreciation Right on such date,
over (B) the strike price that will be determined by the Board at the time of grant of the Stock
Appreciation Right. The appreciation distribution in respect to a Stock Appreciation Right may be
paid in Common Stock, in cash, in any combination of the two or in any other form of consideration,
as



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determined by the Board and contained in the Stock Appreciation Right Agreement evidencing
such Stock Appreciation Right.



     (e) Transferability of Options and SARs. The Board may, in its sole discretion, impose such
limitations on the transferability of Options and SARs as the Board shall determine. In the
absence of such a determination by the Board to the contrary, the following restrictions on the
transferability of Options and SARs shall apply:



          (i) Restrictions on Transfer. An Option or SAR shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant; provided, however, that the Board may, in its sole discretion,
permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and
securities laws upon the Participant’s request. Except as explicitly provided herein, neither an
Option nor a SAR may be transferred for consideration.




          (ii) Domestic Relations Orders. Notwithstanding the foregoing, an Option or SAR may be
transferred pursuant to a domestic relations order; provided, however, that if an Option is an
Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of
such transfer.




          (iii) Beneficiary Designation. Notwithstanding the foregoing, the Participant may, by
delivering written notice to the Company, in a form provided by or otherwise satisfactory to the
Company and any broker designated by the Company to effect Option exercises, designate a third
party who, in the event of the death of the Participant, shall thereafter be entitled to exercise
the Option or SAR and receive the Common Stock or other consideration resulting from such exercise.
In the absence of such a designation, the executor or administrator of the Participant’s estate
shall be entitled to exercise the Option or SAR and receive the Common Stock or other consideration
resulting from such exercise.




     (f) Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR
may vest and therefore become exercisable in periodic installments that may or may not be equal.
The Option or SAR may be subject to such other terms and conditions on the time or times when it
may or may not be exercised (which may be based on the satisfaction of Performance Goals or other
criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs
may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions
governing the minimum number of shares of Common Stock as to which an Option or SAR may be
exercised.



     (g) Termination of Continuous Service. Except as otherwise provided in the applicable Award
Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous
Service terminates (other than for Cause or upon the Participant’s death or Disability), the
Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled
to exercise such Award as of the date of termination of Continuous Service) but only within such
period of time ending on the earlier of (i) the date three (3) months following the termination of
the Participant’s Continuous Service (or such longer or shorter period specified in the applicable
Award Agreement), or (ii) the expiration of the term of the Option or SAR as set forth in the Award
Agreement. If, after termination of Continuous Service,



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the Participant does not exercise his or her Option or SAR within the time specified herein or
in the Award Agreement (as applicable), the Option or SAR shall terminate.



     (h) Extension of Termination Date. If the exercise of an Option or SAR following the
termination of the Participant’s Continuous Service (other than for Cause or upon the Participant’s
death or Disability) would be prohibited at any time solely because the issuance of shares of
Common Stock would violate the registration requirements under the Securities Act, then the Option
or SAR shall terminate on the earlier of (i) the expiration of a total period of three (3) months
(that need not be consecutive) after the termination of the Participant’s Continuous Service during
which the exercise of the Option or SAR would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option or SAR as set forth in the
applicable Award Agreement. In addition, unless otherwise provided in a Participant’s Award
Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the
termination of the Participant’s Continuous Service (other than for Cause) would violate the
Company’s insider trading policy, then the Option or SAR shall terminate on the earlier of (i) the
expiration of a period equal to the applicable post-termination exercise period after the
termination of the Participant’s Continuous Service during which the exercise of the Option or SAR
would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the
term of the Option or SAR as set forth in the applicable Award Agreement.



     (i) Disability of Participant. Except as otherwise provided in the applicable Award Agreement
or other agreement between the Participant and the Company, if a Participant’s Continuous Service
terminates as a result of the Participant’s Disability, the Participant may exercise his or her
Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of
the date of termination of Continuous Service), but only within such period of time ending on the
earlier of (i) the date twelve (12) months following such termination of Continuous Service (or
such longer or shorter period specified in the Award Agreement), or (ii) the expiration of the term
of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous
Service, the Participant does not exercise his or her Option or SAR within the time specified
herein or in the Award Agreement (as applicable), the Option or SAR (as applicable) shall
terminate.



     (j) Death of Participant. Except as otherwise provided in the applicable Award Agreement or
other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service
terminates as a result of the Participant’s death, or (ii) the Participant dies within the period
(if any) specified in the Award Agreement after the termination of the Participant’s Continuous
Service for a reason other than death, then the Option or SAR may be exercised (to the extent the
Participant was entitled to exercise such Option or SAR as of the date of death) by the
Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest
or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s
death, but only within the period ending on the earlier of (i) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the Award Agreement), or
(ii) the expiration of the term of such Option or SAR as set forth in the Award Agreement. If,
after the Participant’s death, the Option or SAR is not exercised within the time specified herein
or in the Award Agreement (as applicable), the Option or SAR shall terminate.



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     (k) Termination for Cause. Except as explicitly provided otherwise in a Participant’s Award
Agreement, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR shall
terminate upon the date of such Participant’s termination of Continuous Service, and the
Participant shall be prohibited from exercising his or her Option or SAR from and after the time of
such termination of Continuous Service.



     (l) Non-Exempt Employees. No Option or SAR granted to an Employee who is a non-exempt
employee for purposes of the Fair Labor Standards Act of 1938, as amended, shall be first
exercisable for any shares of Common Stock until at least six months following the date of grant of
the Option or SAR. Notwithstanding the foregoing, consistent with the provisions of the Worker
Economic Opportunity Act, (i) in the event of the Participant’s death or Disability, (ii) upon a
Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii)
upon a Change in Control, or (iv) upon the Participant’s retirement (as such term may be defined in
the Participant’s Award Agreement or in another applicable agreement or in accordance with the
Company’s then current employment policies and guidelines), any such vested Options and SARs may be
exercised earlier than six months following the date of grant. The foregoing provision is intended
to operate so that any income derived by a non-exempt employee in connection with the exercise or
vesting of an Option or SAR will be exempt from his or her regular rate of pay.



6. Provisions of Stock Awards other than Options and SARs.




     (a) Restricted Stock Awards. Each Restricted Stock Award Agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. To the extent
consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock may be (x)
held in book entry form subject to the Company’s instructions until any restrictions relating to
the Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate shall be
held in such form and manner as determined by the Board. The terms and conditions of Restricted
Stock Award Agreements may change from time to time, and the terms and conditions of separate
Restricted Stock Award Agreements need not be identical; provided, however, that each Restricted
Stock Award Agreement shall conform to (through incorporation of the provisions hereof by reference
in the agreement or otherwise) the substance of each of the following provisions:



          (i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash,
check, bank draft or money order payable to the Company, (B) past services to the Company or an
Affiliate, or (C) any other form of legal consideration (including future services) that may be
acceptable to the Board, in its sole discretion, and permissible under applicable law.




          (ii) Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement may
be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by
the Board.




          (iii) Termination of Participant’s Continuous Service. If a Participant’s Continuous Service
terminates, the Company may receive through a forfeiture condition or a repurchase right any or all
of the shares of Common Stock held by the Participant that have not




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vested as of the date of termination of Continuous Service under the terms of the Restricted
Stock Award Agreement.




          (iv) Transferability. Rights to acquire shares of Common Stock under the Restricted Stock
Award Agreement shall be transferable by the Participant only upon such terms and conditions as are
set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole
discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains
subject to the terms of the Restricted Stock Award Agreement.




          (v) Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on
Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the
shares subject to the Restricted Stock Award to which they relate.




     (b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem appropriate. The terms
and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical;
provided, however, that each Restricted Stock Unit Award Agreement shall conform to (through
incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of
each of the following provisions:



          (i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will
determine the consideration, if any, to be paid by the Participant upon delivery of each share of
Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by
the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid
in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and
permissible under applicable law.




          (ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose
such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its
sole discretion, deems appropriate.




          (iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of
Common Stock, their cash equivalent, any combination thereof or in any other form of consideration,
as determined by the Board and contained in the Restricted Stock Unit Award Agreement.




          (iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the
Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery
of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award
to a time after the vesting of such Restricted Stock Unit Award.




          (v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common
Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend
equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock
Unit Award in such manner as determined by the Board. Any additional shares covered by the
Restricted Stock Unit Award credited by reason of such




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dividend equivalents will be subject to all of the same terms and conditions of the underlying
Restricted Stock Unit Award Agreement to which they relate.




          (vi) Termination of Participant’s Continuous Service. Except as otherwise provided in the
applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award
that has not vested will be forfeited upon the Participant’s termination of Continuous Service.




     (c) Performance Awards.



          (i) Performance Stock Awards. A Performance Stock Award is a Stock Award that may vest or may
be exercised contingent upon the attainment during a Performance Period of certain Performance
Goals. A Performance Stock Award may, but need not, require the completion of a specified period
of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved
during the Performance Period, and the measure of whether and to what degree such Performance Goals
have been attained shall be conclusively determined by the Committee, in its sole discretion. The
Board may provide for or, subject to such terms and conditions as the Board may specify, may permit
a Participant to elect for, the payment of any Performance Stock Award to be deferred to a
specified date or event. In addition, to the extent permitted by applicable law and the applicable
Award Agreement, the Board may determine that cash may be used in payment of Performance Stock
Awards.




          (ii) Performance Cash Awards. A Performance Cash Award is a cash award that may be paid
contingent upon the attainment during a Performance Period of certain Performance Goals. A
Performance Cash Award may also require the completion of a specified period of Continuous Service.
At the time of grant of a Performance Cash Award, the length of any Performance Period, the
Performance Goals to be achieved during the Performance Period, and the measure of whether and to
what degree such Performance Goals have been attained shall be conclusively determined by the
Committee, in its sole discretion. The Board may provide for or, subject to such terms and
conditions as the Board may specify, may permit a Participant to elect for, the payment of any
Performance Cash Award to be deferred to a specified date or event. The Committee may specify the
form of payment of Performance Cash Awards, which may be cash or other property, or may provide for
a Participant to have the option for his or her Performance Cash Award, or such portion thereof as
the Board may specify, to be paid in whole or in part in cash or other property.




          (iii) Section 162(m) Compliance. Unless otherwise permitted in compliance with the
requirements of Section 162(m) of the Code with respect to an Award intended to qualify as
“performance-based compensation” thereunder, the Committee shall establish the Performance Goals
applicable to, and the formula for calculating the amount payable under, the Award no later than
the earlier of (a) the date ninety (90) days after the commencement of the applicable Performance
Period, or (b) the date on which twenty-five (25%) of the Performance Period has elapsed, and in
any event at a time when the achievement of the applicable Performance Goals remains substantially
uncertain. Prior to the payment of any compensation under an Award intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, the Committee shall certify the
extent to which any Performance Goals and any other material terms under such Award have been
satisfied (other than in cases where such relate




11









 




solely to the increase in the value of the Common Stock). Notwithstanding satisfaction of any
completion of any Performance Goals, to the extent specified at the time of grant of an Award to
“covered employees” within the meaning of Section 162(m) of the Code, the number of Shares,
Options, cash or other benefits granted, issued, retainable and/or vested under an Award on account
of satisfaction of such Performance Goals may be reduced by the Committee on the basis of such
further considerations as the Committee, in its sole discretion, shall determine.




     (d) Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options
or stock rights with an exercise price or strike price less than 100% of the Fair Market Value of
the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards
provided for under Section 5 and the preceding provisions of this Section 6. Subject to the
provisions of the Plan, the Board shall have sole and complete authority to determine the persons
to whom and the time or times at which such Other Stock Awards will be granted, the number of
shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock
Awards and all other terms and conditions of such Other Stock Awards.



7. Covenants of the Company.




     (a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock reasonably required to satisfy such
Stock Awards.



     (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained. A Participant shall not be eligible for the grant of a Stock
Award or the subsequent issuance of Common Stock pursuant to the Stock Award if such grant or
issuance would be in violation of any applicable securities law.



     (c) No Obligation to Notify or Minimize Taxes. The Company shall have no duty or obligation
to any Participant to advise such holder as to the time or manner of exercising such Stock Award.
Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder
of a pending termination or expiration of a Stock Award or a possible period in which the Stock
Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences
of a Stock Award to the holder of such Stock Award.



12









 





8. Miscellaneous.




     (a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common
Stock pursuant to Stock Awards shall constitute general funds of the Company.



     (b) Corporate Action Constituting Grant of Stock Awards. Corporate action constituting a
grant by the Company of a Stock Award to any Participant shall be deemed completed as of the date
of such corporate action, unless otherwise determined by the Board, regardless of when the
instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually
received or accepted by, the Participant.



     (c) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until (i) such Participant has satisfied all requirements for exercise of the Stock
Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to
such Stock Award has been entered into the books and records of the Company.



     (d) No Employment or Other Service Rights. Nothing in the Plan, any Stock Award Agreement or
any other instrument executed thereunder or in connection with any Award granted pursuant thereto
shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Stock Award was granted or shall affect the right of the Company
or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or
without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s
agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the
Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the
state in which the Company or the Affiliate is incorporated, as the case may be.



     (e) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof that exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of
the applicable Option Agreement(s).



     (f) Investment Assurances. The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant



13









 







to such requirements, shall be inoperative if (A) the issuance of the shares upon the exercise
or acquisition of Common Stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (B) as to any particular requirement,
a determination is made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon advice of counsel
to the Company, place legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the Common Stock.



     (g) Withholding Obligations. Unless prohibited by the terms of a Stock Award Agreement, the
Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation
relating to an Award by any of the following means or by a combination of such means: (i) causing
the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares
of Common Stock issued or otherwise issuable to the Participant in connection with the Award;
provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid
classification of the Stock Award as a liability for financial accounting purposes); (iii)
withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise
payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.



     (h) Electronic Delivery. Any reference herein to a “written” agreement or document shall
include any agreement or document delivered electronically or posted on the Company’s intranet.



     (i) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion,
may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting
or settlement of all or a portion of any Award may be deferred and may establish programs and
procedures for deferral elections to be made by Participants. Deferrals by Participants will be
made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an employee or otherwise providing
services to the Company. The Board is authorized to make deferrals of Awards and determine when,
and in what annual percentages, Participants may receive payments, including lump sum payments,
following the Participant’s termination of Continuous Service, and implement such other terms and
conditions consistent with the provisions of the Plan and in accordance with applicable law.



     (j) Compliance with Section 409A. To the extent that the Board determines that any Award
granted hereunder is subject to Section 409A of the Code, the Award Agreement evidencing such Award
shall incorporate the terms and conditions necessary to avoid the consequences specified in Section
409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A of the Code. Notwithstanding anything to the contrary
in this Plan (and unless the Award Agreement specifically provides otherwise), if the Shares are
publicly traded and a Participant holding an Award that constitutes “deferred compensation” under
Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no
distribution or payment of any amount shall be made upon a “separation from service” before a date
that is six (6) months following the



14









 







date of such Participant’s “separation from service” (as defined in Section 409A of the Code
without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s
death.



9. Adjustments upon Changes in Common Stock; Other Corporate Events.




     (a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board shall
appropriately and proportionately adjust: (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities
that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c) and
(iii) the class(es) and number of securities and price per share of stock subject to outstanding
Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding
and conclusive.



     (b) Dissolution or Liquidation. Except as otherwise provided in the Stock Award Agreement, in
the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than
Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a
forfeiture condition or the Company’s right of repurchase) shall terminate immediately prior to the
completion of such dissolution or liquidation, and the shares of Common Stock subject to the
Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired
by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous
Service, provided, however, that the Board may, in its sole discretion, cause some or all Stock
Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to
the extent such Stock Awards have not previously expired or terminated) before the dissolution or
liquidation is completed but contingent on its completion.



     (c) Corporate Transaction. The following provisions shall apply to Stock Awards in the event
of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award
or any other written agreement between the Company or any Affiliate and the holder of the Stock
Award or unless otherwise expressly provided by the Board at the time of grant of a Stock Award.
In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the
Board shall take one or more of the following actions with respect to Stock Awards, contingent upon
the closing or completion of the Corporate Transaction:



          (i) arrange for the surviving corporation or acquiring corporation (or the surviving or
acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a
similar stock award for the Stock Award (including, but not limited to, an award to acquire the
same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);




          (ii) arrange for the assignment of any reacquisition or repurchase rights held by the Company
in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or
acquiring corporation (or the surviving or acquiring corporation’s parent company);




15









 








          (iii) accelerate the vesting of the Stock Award (and, if applicable, the time at which the
Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction
as the Board shall determine (or, if the Board shall not determine such a date, to the date that is
five (5) days prior to the effective date of the Corporate Transaction), with such Stock Award
terminating if not exercised (if applicable) at or prior to the effective time of the Corporate
Transaction;




          (iv) arrange for the lapse of any reacquisition or repurchase rights held by the Company with
respect to the Stock Award;




          (v) cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not
exercised prior to the effective time of the Corporate Transaction, in exchange for such cash
consideration, if any, as the Board, in its sole discretion, may consider appropriate; and




          (vi) make a payment, in such form as may be determined by the Board equal to the excess, if
any, of (A) the value of the property the Participant would have received upon the exercise of the
Stock Award, over (B) any exercise price payable by such holder in connection with such exercise.



The Board need not take the same action or actions with respect to all Stock Awards or portions
thereof or with respect to all Participants.




     (d) Change in Control. A Stock Award may be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement
for such Stock Award or as may be provided in any other written agreement between the Company or
any Affiliate and the Participant, but in the absence of such provision, no such acceleration shall
occur.



10. Termination or Suspension of the Plan.




     (a) Plan Term. The Board may suspend or terminate the Plan at any time; provided, however
that Incentive Stock Options may no longer be granted under the Plan after the day before the tenth
(10th) anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the
date the Plan is approved by the stockholders of the Company. No Awards may be granted under the
Plan while the Plan is suspended or after it is terminated.



     (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Award granted while the Plan is in effect except with the written consent
of the affected Participant.



11. Effective Date of Plan.




     This Plan shall become effective on the Effective Date, but no Award shall be exercised (or in
the case of a Restricted Stock Award, Restricted Stock Unit Award, or Other Stock Award shall be
granted) unless and until the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve months before or after the date the Plan is adopted by the Board.



16









 





12. Choice of Law.



The law of the state of California shall govern all questions concerning the construction, validity
and interpretation of this Plan, without regard to that state’s conflict of laws rules.



13. Definitions. As used in the Plan, the following definitions shall apply to the
capitalized terms indicated below:




     (a) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the
Company as such terms are defined in Rule 405 of the Securities Act. The Board shall have the
authority to determine the time or times at which “parent” or “subsidiary” status is determined
within the foregoing definition.



     (b) “Award” means a Stock Award or a Performance Cash Award.



     (c) “Award Agreement” means a written agreement between the Company and a Participant
evidencing the terms and conditions of an Award.



     (d) “Board” means the Board of Directors of the Company.



     (e) “Capitalization Adjustment” means any change that is made in, or other events that occur
with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the
Effective Date without the receipt of consideration by the Company through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than
cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or any similar equity restructuring transaction,
as that term is used in Statement of Financial Accounting Standards No. 123 (revised).
Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall
not be treated as a Capitalization Adjustment.



     (f) “Cause” shall have the meaning ascribed to such term in any written agreement between the
Participant and the Company defining such term and, in the absence of such agreement, such term
shall mean with respect to a Participant, the occurrence of any of the following events, if such
event results in a demonstrably harmful impact on the Company’s business or reputation, or that of
any of its Subsidiaries: (i) such Participant’s commission of any felony or any crime involving
fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii)
such Participant’s attempted commission of, or participation in, a fraud or act of dishonesty
against the Company; (iii) such Participant’s intentional, material violation of any contract or
agreement between the Participant and the Company or of any statutory duty owed to the Company;
(iv) such Participant’s unauthorized use or disclosure of the Company’s confidential information or
trade secrets; or (v) such Participant’s gross misconduct. The determination that a termination of
the Participant’s Continuous Service is either for Cause or without Cause shall be made by the
Company in its sole discretion. Any determination by the Company that the Continuous Service of a
Participant was terminated by reason of dismissal without Cause for the purposes of outstanding
Awards held by such Participant shall have no effect upon any determination of the rights or
obligations of the Company or such Participant for any other purpose.



17









 





     (g) “Change in Control” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:



          (i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Company’s
then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company directly from the Company, (B) on account of the
acquisition of securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person that acquires the Company’s securities in a transaction or series of related
transactions the primary purpose of which is to obtain financing for the Company through the
issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange
Act Person (the “Subject Person“) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting securities by the
Company reducing the number of shares outstanding, provided that if a Change in Control would occur
(but for the operation of this sentence) as a result of the acquisition of voting securities by the
Company, and after such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not occurred, increases
the percentage of the then outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control shall be deemed to occur;




          (ii) there is consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly
or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%)
of the combined outstanding voting power of the surviving Entity in such merger, consolidation or
similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power
of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions as their Ownership of the outstanding voting securities
of the Company immediately prior to such transaction;




          (iii) the stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company
shall otherwise occur, except for a liquidation into a parent corporation;




          (iv) there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are Owned by stockholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of the Company
immediately prior to such sale, lease, license or other disposition; or




          (v) individuals who, on the date the Plan is adopted by the Board, are members of the Board
(the “Incumbent Board”) cease for any reason to constitute at least a




18









 




majority of the members of the Board; provided, however, that if the appointment or election
(or nomination for election) of any new Board member was approved or recommended by a majority vote
of the members of the Incumbent Board then still in office, such new member shall, for purposes of
this Plan, be considered as a member of the Incumbent Board.




     Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in
Control shall not include a sale of assets, merger or other transaction effected exclusively for
the purpose of changing the domicile of the Company, and (B) the definition of Change in Control
(or any analogous term) in an individual written agreement between the Company or any Affiliate and
the Participant shall supersede the foregoing definition with respect to Awards subject to such
agreement; provided, however, that if no definition of Change in Control or any analogous term is
set forth in such an individual written agreement, the foregoing definition shall apply.



     (h) “Code” means the Internal Revenue Code of 1986, as amended, including any applicable
regulations and guidance thereunder.



     (i) “Committee” means a committee of one or more Directors to whom authority has been
delegated by the Board in accordance with Section 2(c).



     (j) “Common Stock” means the common stock of the Company.



     (k) “Company” means QuinStreet, Inc., a Delaware corporation.



     (l) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is compensated for such services, or
(ii) serving as a member of the board of directors of an Affiliate and is compensated for such
services. However, service solely as a Director, or payment of a fee for such service, shall not
cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the
foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration
Statement under the Securities Act is available to register either the offer or the sale of the
Company’s securities to such person.



     (m) “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or an Affiliate as
an Employee, Consultant or Director or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the Participant’s service
with the Company or an Affiliate, shall not terminate a Participant’s Continuous Service; provided,
however, if the Entity for which a Participant is rendering services ceases to qualify as an
Affiliate, as determined by the Board, in its sole discretion, such Participant’s Continuous
Service shall be considered to have terminated on the date such Entity ceases to qualify as an
Affiliate. To the extent permitted by law, the Board or the chief executive officer of the
Company, in that party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of (i) any leave of absence approved by the Board or Chief
Executive Officer, including sick leave, military leave or any other personal leave, or
(ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the



19









 







foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting
in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy,
in the written terms of any leave of absence agreement or policy applicable to the Participant, or
as otherwise required by law.



     (n) “Corporate Transaction” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:



          (i) the consummation of a sale or other disposition of all or substantially all, as determined
by the Board, in its sole discretion, of the consolidated assets of the Company and its
Subsidiaries;




          (ii) the consummation of a sale or other disposition of at least ninety percent (90%) of the
outstanding securities of the Company;




          (iii) the consummation of a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or




          (iv) the consummation of a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of
the merger, consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise.




     (o) “Covered Employee” shall have the meaning provided in Section 162(m)(3) of the Code.



     (p) “Director” means a member of the Board.



     (q) “Disability” means, with respect to a Participant, the inability of such Participant to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months, as provided in Sections
22(e)(3) and 409A(a)(2)(c)(i) of the Code, and shall be determined by the Board on the basis of
such medical evidence as the Board deems warranted under the circumstances.



     (r) “Effective Date” means the effective date of this Plan document, which is the date of the
underwriting agreement between the Company and the underwriter(s) managing the initial public
offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public
offering.



     (s) “Employee” means any person employed by the Company or an Affiliate. However, service
solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an “Employee” for purposes of the Plan.



     (t) “Entity” means a corporation, partnership, limited liability company or other entity.



20









 





     (u) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.



     (v) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include
(i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or
any Subsidiary of the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter
temporarily holding securities pursuant to a registered public offering of such securities, (iv) an
Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or
“group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the
Effective Date, is the Owner, directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s then outstanding
securities.



     (w) “Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:



          (i) If the Common Stock is listed on any established stock exchange or traded on any
established market, the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the date of determination, as reported in a
source the Board deems reliable.




          (ii) Unless otherwise provided by the Board, if there is no closing sales price for the Common
Stock on the date of determination, then the Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation exists.




          (iii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of
the Code.




     (x) “Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is
intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of
the Code.



     (y) “Non-Employee Director” means a Director who either (i) is not a current employee or
officer of the Company or an Affiliate, does not receive compensation, either directly or
indirectly, from the Company or an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities
Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure
would be required under Item 404(a) of Regulation S-K, and is not engaged in a business
relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or
(ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.



21









 





     (z) “Nonstatutory Stock Option” means any option granted pursuant to Section 5 of the Plan
that does not qualify as an Incentive Stock Option.



     (aa) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act.



     (bb) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase
shares of Common Stock granted pursuant to the Plan.



     (cc) “Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to
the terms and conditions of the Plan.



     (dd) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.



     (ee) “Other Stock Award” means an award based in whole or in part by reference to the Common
Stock which is granted pursuant to the terms and conditions of Section 6(d).



     (ff) “Other Stock Award Agreement” means a written agreement between the Company and a holder
of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each
Other Stock Award Agreement shall be subject to the terms and conditions of the Plan.



     (gg) “Outside Director” means a Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” who receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or
an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated
corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is
otherwise considered an “outside director” for purposes of Section 162(m) of the Code.



     (hh) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to “Own,” to
have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or
Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities.



     (ii) “Participant” means a person to whom an Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.



     (jj) “Performance Cash Award” means an award of cash granted pursuant to the terms and
conditions of Section 6(c)(ii).



     (kk) “Performance Criteria” means the one or more criteria that the Board shall select for
purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria
that shall be used to establish such Performance Goals may be based on any one of, or



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combination of, the following as determined by the Board: (i) earnings (including earnings per
share and net earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings
before interest, taxes, depreciation and amortization; (iv) total stockholder return; (v) return on
equity or average stockholder’s equity; (vi) return on assets, investment, or capital employed;
(vii) stock price; (viii) margin (including gross margin); (ix) income (before or after taxes); (x)
operating income; (xi) operating income after taxes; (xii) pre-tax profit; (xiii) operating cash
flow; (xiv) sales or revenue targets; (xv) increases in revenue or product revenue; (xvi) expenses
and cost reduction goals; (xvii) improvement in or attainment of working capital levels;
(xiii) economic value added (or an equivalent metric); (xix) market share; (xx) cash flow; (xxi)
cash flow per share; (xxii) share price performance; (xxiii) debt reduction; (xxiv) implementation
or completion of projects or processes; (xxv) customer satisfaction; (xxvi) stockholders’ equity;
(xxvii) capital expenditures; (xxiii) debt levels; (xxix) operating profit or net operating profit;
(xxx) workforce diversity; (xxxi) growth of net income or operating income; (xxxii) billings; and
(xxxiii) to the extent that an Award is not intended to comply with Section 162(m) of the Code,
other measures of performance selected by the Board.



     (ll) “Performance Goals” means, for a Performance Period, the one or more goals established by
the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be
based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates,
or business segments, and in either absolute terms or relative to the performance of one or more
comparable companies or the performance of one or more relevant indices. Unless specified
otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such
other document setting forth the Performance Goals at the time the Performance Goals are
established, the Board shall appropriately make adjustments in the method of calculating the
attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring
and/or other nonrecurring charges; (2) to exclude exchange rate effects, as applicable, for
non-U.S. dollar denominated Performance Goals; (3) to exclude the effects of changes to generally
accepted accounting principles; (4) to exclude the effects of any statutory adjustments to
corporate tax rates; and (5) to exclude the effects of any “extraordinary items” as determined
under generally accepted accounting principles. In addition, the Board retains the discretion to
reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals
and to define the manner of calculating the Performance Criteria it selects to use for such
Performance Period. Partial achievement of the specified criteria may result in the payment or
vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the
written terms of a Performance Cash Award.



     (mm) “Performance Period” means the period of time selected by the Board over which the
attainment of one or more Performance Goals will be measured for the purpose of determining a
Participant’s right to and the payment of a Stock Award or a Performance Cash Award. Performance
Periods may be of varying and overlapping duration, at the sole discretion of the Board.



     (nn) “Performance Stock Award” means a Stock Award granted under the terms and conditions of
Section 6(c)(i).



     (oo) “Plan” means this QuinStreet, Inc. 2010 Equity Incentive Plan.



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     (pp) “Restricted Stock Award” means an award of shares of Common Stock which is granted
pursuant to the terms and conditions of Section 6(a).



     (qq) “Restricted Stock Award Agreement” means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award
grant. Each Restricted Stock Award Agreement shall be subject to the terms and conditions of the
Plan.



     (rr) “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is
granted pursuant to the terms and conditions of Section 6(b).



     (ss) “Restricted Stock Unit Award Agreement” means a written agreement between the Company and
a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock
Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and
conditions of the Plan.



     (tt) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.



     (uu) “Securities Act” means the Securities Act of 1933, as amended.



     (vv) “Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common
Stock that is granted pursuant to the terms and conditions of Section 5.



     (ww) “Stock Appreciation Right Agreement” means a written agreement between the Company and a
holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation
Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions
of the Plan.



     (xx) “Stock Award” means any right to receive Common Stock granted under the Plan, including
an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted
Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock Award.



     (yy) “Stock Award Agreement” means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan.



     (zz) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company,
and (ii) any partnership, limited liability company or other entity in which the Company has a
direct or indirect interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%).



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     (aaa) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Affiliate.




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