Document:

Employment Agreement by and between the Registrant and Ian Morris

 Exhibit 10.3 
  
 EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (this “Agreement”), dated as of May 13, 2004, between House Values, Inc., a Washington
corporation (“Employer”), and Ian Morris (“Executive”), an individual resident of the State of Washington, is effective as of the date first written above. 
  
 W I T N E S S E T H: 
  
 WHEREAS, Employer desires to continue the employment of Executive upon the
terms and conditions set forth herein; 
  
 WHEREAS, Executive and
Employer have entered into previous employment agreements that they wish to modify and supercede with the terms set forth in this Agreement; and 
  
 WHEREAS, Executive is willing to continue to provide services to Employer upon the terms and conditions set forth herein. 
  
 A G R E E M E N
T S: 
  
 NOW, THEREFORE, for and in consideration of
the foregoing premises and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Employer and Executive hereby agree to enter into an employment relationship in accordance with the terms and
conditions set forth below: 
  

	1.	EMPLOYMENT AND BOARD SEAT 

  

	 	1.1	Employment 

  
 Employer will continue to employ Executive and Executive will continue to accept employment by Employer as its Chief Executive Officer. Executive will
perform the duties of Chief Executive Officer and such other duties as may be assigned from time to time by the Board of Directors of Employer (“Board”), which relate to the business of Employer and are consistent with Executive’s
position. The parties agree that Executive’s performance, compensation and benefits will be subject to an annual review by the Board (or the Compensation Committee thereof) each January, beginning in January 2005. 
  

					
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	 	1.2	Board Seal 

  
 Effective as of the first meeting date following the effective date of this Agreement, Executive shall serve as a member of the Board of Employer and
shall be subject to all rules, bylaws and policies (including any and all rules relating to the appointment of Board members of Board committees and the election and removal of Board members). 
  

	2.	ATTENTION AND EFFORT 

  
 Executive will devote his/her full-time efforts to Employer’s business and will serve its interests in good faith to the best of his/her ability
during the term of this Agreement. Executive is not limited from participating in certain activities of a de minimus nature such as boards of directors of other non-competitive companies, public writing and speaking and serving non-profit agencies;
provided that Executive provides Employer with prior notice of such activities and that such activities receive the written approval of Employer. Employer may only withhold its consent to any business activity by Executive that Employer determines
would directly interfere, impair or hinder in any way Executive’s ability to perform or otherwise satisfy Executive’s responsibilities and duties from time to time in effect. 
  

	3.	COMPENSATION 

  
 Employer agrees to pay or cause to be paid to Executive, and Executive agrees to accept in exchange for the services rendered hereunder by him, the
following compensation: 
  

	 	3.1	Base Salary 

  
 Commencing the date hereof, Executive’s compensation shall consist of an annual base salary (the “Base Salary”) of $210,000, before all
customary payroll deductions. The Base Salary shall be paid in twenty four semi-monthly installments in accordance with Employer’s ordinary payroll policies and procedures with respect to its management employees. 
  

	 	3.2	Bonus 

  
 Executive shall be
eligible for annual bonuses pursuant to a management bonus plan to be determined by the Board of Directors with an annual target award for Executive of at least 30% of the then Base Salary, but no more than 75% of such Base Salary, with the exact
award to be determined at the sole discretion of the Board. 
  

					
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	 	3.3	Benefits 

  
 Executive shall be entitled to participate at Employer’s expense in such benefit programs as Employer provides from time to time to its executive
management team (and, if not so provided to the executive management team, Executive shall be entitled to basic health and dental insurance for Executive and his family at Employer’s expense, four weeks of paid vacation time, and a monthly
automobile allowance of $750), which participation shall be subject to and in accordance with the terms of such benefit programs. 
  

	 	3.4	Business Expenses 

  
 Employer agrees that Executive shall be entitled to reimbursement by Employer for all reasonable expenses that Executive may incur in the performance of
his duties and obligations under this Agreement, consistent with Employer’s policies for documentation, reimbursement and payment. 
  

	 	3.5	Life Insurance 

  
 Executive will be provided with Employer-paid life insurance which will provide death benefits in the event of his death in an amount of at least
$2,500,000 payable to the beneficiary of beneficiaries named by Executive. 
  

	 	3.6	Withholding 

  
 Employer shall be responsible for withholding from Executive’s compensation FICA, FUTA and other payroll and income taxes, as required by law and
such other amounts as may be directed by Executive. 
  

	4.	TERMINATION 

  
 The employment of Executive pursuant to this Agreement may be terminated as follows, but in any case, the provisions of this Agreement which are intended
to survive termination shall so survive the termination of this Agreement and the termination of Executive’s employment hereunder. 
  

	 	4.1.	By Employer 

  
 With or without Cause (as defined below), Employer may terminate the employment of Executive at any time during the term of employment upon giving Notice
of Termination (as defined below). 
  

					
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	 	4.2.	By Executive 

  
 Executive may terminate his/her employment at any time, for any reason, upon giving Notice of Termination. 
  

	 	4.3.	Automatic Termination 

  
 This Agreement and Executive’s employment hereunder shall terminate automatically upon the death or total disability of Executive. The term
“total disability” as used herein shall mean Executive’s inability to perform the duties set forth in Section 1 hereof for a period or periods aggregating one hundred eighty (180) consecutive days in any twelve-month
period as a result of physical or mental illness, loss of legal capacity or any other cause beyond Executive’s control as determined by a physician mutually selected by Executive and Employer, unless Executive is granted a leave of absence by
the Board of Directors of Employer. Executive and Employer hereby acknowledge that Executive’s ability to perform the duties specified in paragraph 1 hereof is of the essence of this Agreement. Termination hereunder shall be deemed to be
effective (a) at the end of the calendar month in which Executive’s death occurs or (b) immediately upon a determination by the Board of Directors of Employer of Executive’s total disability, as defined herein. 
  

	 	4.4.	Notice 

  
 The term “Notice of Termination” shall mean at least 30 days’ written notice of termination of Executive’s employment, during
which period Executive’s employment and performance of services will continue; provided, however, that Employer may, upon notice to Executive and without reducing Executive’s Base Salary and employee benefits during such
period, excuse Executive from any or all of his/her duties during such period. The effective date of the termination of Executive’s employment hereunder shall be the date on which such 30-day period expires. 
  

	5.	TERMINATION OF EMPLOYMENT 

  
 In the event of termination of the employment of Executive, all compensation and benefits set forth in this Agreement shall terminate except as
specifically provided in this Section 5. 
  

	 	5.1.	Termination by Employer 

  
 If (a) Employer terminates Executive’s employment without Cause (as defined below), or (b) Executive resigns for Good Reason (as defined below), then
Executive shall be entitled to receive the following termination payments and benefits: 
  
 (i) Executive shall be entitled to twelve months Base Salary, paid at the same interval as payments of Base Salary were made to Executive immediately prior to termination. 
  

					
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 (ii) Executive shall be entitled to any unpaid Base Salary which has accrued for services already
performed as of the date termination of Executive’s employment becomes effective. 
  
 (iii) Executive shall be entitled to a severance bonus equal to 100% of the most recent annual bonus paid to Executive. This severance bonus shall be paid in twenty four equal semi-monthly installments beginning at
the end of the month during which Executive’s employment is terminated. 
  
 (iv) Employer shall pay any COBRA premiums otherwise due from Executive, for himself and his eligible dependents, with respect to COBRA coverage offered by Employer and timely elected by Executive under
Employer’s basic health insurance program as a result of Executive’s termination of employment with Employer, such payment to continue until the termination or expiration of COBRA coverage in accordance with the terms of such program.

  
 (v) Simultaneous with the termination of Executive’s
employment, on the date of termination, (a) in the event Executive resigns for Good Reason, then all unvested outstanding options to purchase shares of common stock of HouseValues that were granted to Executive on or prior to the date hereof (the
“Stock Options”) shall become 100% vested and immediately exercisable, and (b) in the event Employer terminates Executive’s employment without Cause, then all unvested options that would have been exercisable on the fourth quarterly
vesting following Executive’s termination shall be deemed vested and exercisable as of the date of Executive’s termination. Any shares of common stock issued upon exercise of the Stock Options shall remain subject to the terms of the Stock
Option Letter Agreement(s) evidencing such Stock Options (the “Option Letter Agreement(s)”), as modified herein and any applicable Notice of Exercise and Stock Purchase Agreements. 
  
 (vi) Employer agrees that it shall not exercise the Repurchase Rights set
forth in Section 13.1 of Employer’s 1999 Stock Incentive Plan, as amended (the “Option Plan”) or any other repurchase rights it may have. 
  
 (vii) Notwithstanding anything to the contrary in the Option Letter Agreement(s) or the Option Plan, the vested portion of the Stock Options (including
portions vested pursuant to subsection (v) above) shall remain exercisable through the 

  

					
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applicable Expiration Date (as such term is defined in the Option Letter Agreement(s)) of such Stock Options. 
  

	 	5.2.	Termination for Cause 

  
 If Executive is terminated by Employer for Cause, Executive shall not be entitled to receive any payments or rights hereunder, other than those set forth
in clause (ii) of Section 5.1 hereof. In addition, notwithstanding anything to the contrary in the Option Letter Agreement(s) or the Option Plan, the vested portion of the Stock Options shall not be forfeited upon termination for Cause, but shall
remain exercisable in accordance with their terms. 
  

	 	5.3.	Termination by Executive 

  
 In the case of the termination of Executive’s employment by Executive, other than for Good Reason, Executive shall not be entitled to receive any
payments or rights hereunder, other than those set forth in clause (ii) of Section 5.1 hereof. 
  

	 	5.4.	Automatic Termination 

  
 In the case of Automatic Termination as set forth in Section 4.3, Executive shall not be entitled to receive any payments or rights hereunder, other than
those set forth in clauses (ii), (iv), (vi) and (vii); provided, however, that at the sole discretion of the Board, either the Executive’s estate or the Executive may receive a pro rata portion of the entire annual target award under
Employer’s management compensation plan (based upon Executive’s then annual Base Salary), payable when bonuses are made to other management employees of Employer hereof. 
  

	 	5.5.	Cause 

  
 Wherever reference is made in this Agreement to termination being with or without Cause, “Cause” shall be limited to the occurrence of
one or more of the following events: 
  

	 	(a)	willful misconduct, insubordination, or dishonesty in the performance of Executive’s duties or other knowing and material violation of Employer’s policies and procedures
in effect from time to time which results in a material adverse effect on Employer; 

  

	 	(b)	 the continued failure of Executive to satisfactorily perform his/her duties for a period of sixty consecutive days after receipt of written notice that specifically
identifies the areas in which Executive’s performance is 

  

					
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deficient and Executive fails to cure such acts or omissions within thirty (30) days after receipt of the written notice; 

  

	 	(c)	conviction of Executive of a felony involving an act of dishonesty, moral turpitude, deceit or fraud, or the commission of acts that could reasonably be expected to result in such a
conviction; 

  

	 	(d)	current use by the Executive of illegal substances that results in a criminal conviction and materially impairs Employer’s business, goodwill or reputation; or

  

	 	(e)	any material violation by Executive of Executive’s Noncompetition Agreement with Employer that results in a material adverse effect on Employer. 

  

	 	5.6.	Good Reason 

  
 For the purposes of this Agreement, “Good Reason” shall mean that Executive, without his/her consent, has either:

  
 (a) incurred a material reduction in his or
her title, status, authority or responsibility at Employer; or 
  
 (b) incurred a reduction in Executive’s Base Salary from Employer; 
  
 (c) suffered a material breach of this Agreement by Employer which Employer does not cure within 20 days following written notice from
Executive; 
  
 (d) a relocation of Executives
office location more than 40 miles from the current location, or 
  
 (e) been removed as a member of the Board other than by a vote of the shareholders or because his employment has been terminated for Cause as described in this Agreement. 
  

	6.	Confidentiality Agreement 

  
 Executive is subject to, and this Employment Agreement is conditioned on agreement to, the terms of the Confidential Information, Inventions,
Nonsolicitation and Noncompetition Agreement (the “Confidentiality Agreement”) entered into by Executive and the terms of the Confidentiality Agreement shall survive the termination of Executive’s employment with Employer. 

 

					
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	7.	REPRESENTATIONS AND WARRANTIES 

  
 In order to induce Employer to enter into this Agreement, Executive represents and warrants to Employer that neither the execution nor the performance of
this Agreement by Executive will violate or conflict in any way with any other agreement by which Executive may be bound, or with any other duties imposed upon Executive by corporate or other statutory or common law. 
  

	8.	FORM OF NOTICE 

  
 All notices given hereunder shall be given in writing, shall specifically refer to this Agreement and shall be personally delivered or sent by telecopy or
other electronic facsimile transmission or by registered or certified mail, return receipt requested, at the address set forth below or at such other address as may hereafter be designated by notice given in compliance with the terms hereof:

  

			
	If to Executive:	  	 13528 137th Place NE
 Kirkland, WA
98034

		
	If to Employer:	  	 House Values, Inc.
 Suite 202
 15 Lake Bellevue Drive
 Bellevue, WA 98005
 Attention: General Counsel

		
	Copy to:	  	 Perkins Coie LLP
 1201 Third Street, Suite
4800
 Seattle, WA 98101
 Attention: David F. McShea
 Telephone: 206-359-8000
 Facsimile: 206-359-9000

  
 If notice is mailed, such notice shall
be effective upon mailing, or if notice is personally delivered or sent by telecopy or other electronic facsimile transmission, it shall be effective upon receipt. 
  

	9.	ASSIGNMENT 

  
 This Agreement is personal to Executive and shall not be assignable by Executive. Employer may assign its rights hereunder to (a) any corporation
resulting 

  

					
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from any merger, consolidation or other reorganization to which Employer is a party or (b) any corporation, partnership, association or other person to which
Employer may transfer all or substantially all of the assets and business of Employer existing at such time. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns. 
  

	10.	WAIVERS 

  
 No delay or failure by any party hereto in exercising, protecting or enforcing any of its rights, titles, interests or remedies hereunder, and no course
of dealing or performance with respect thereto, shall constitute a waiver thereof. The express waiver by a party hereto of any right, title, interest or remedy in a particular instance or circumstance shall not constitute a waiver thereof in any
other instance or circumstance. All rights and remedies shall be cumulative and not exclusive of any other rights or remedies. 
  

	11.	ARBITRATION 

  
 Any controversies or claims arising out of or relating to this Agreement shall be fully and finally settled by arbitration in accordance with the
Employment Arbitration Rules of the American Arbitration Association then in effect (the “AAA Rules”), conducted by one arbitrator either mutually agreed upon by Employer and Executive or chosen in accordance with the AAA Rules,
except that the parties thereto shall have any right to discovery as would be permitted by the Federal Rules of Civil Procedure for a period of 90 days following the commencement of such arbitration and the arbitrator thereof shall resolve any
dispute which arises in connection with such discovery. The prevailing party shall be entitled to costs, expenses and reasonable attorneys’ fees, and judgment upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. 
  

	12.	AMENDMENTS IN WRITING 

  
 No amendment, modification, waiver, termination or discharge of any provision of this Agreement, nor consent to any departure therefrom by either party
hereto, shall in any event be effective unless the same shall be in writing, specifically identifying this Agreement and the provision intended to be amended, modified, waived, terminated or discharged and signed by Employer and Executive, and each
such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral

  

					
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agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by Employer and Executive. 
  

	13.	APPLICABLE LAW 

  
 This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the State of Washington, without regard to any rules governing conflicts of laws. 
  

	14.	SEVERABILITY 

  
 If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction, for any reason, then, to the full extent permitted
by law (a) all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality
or unenforceability shall not effect the validity, legality or enforceability of any other provision hereof, and (c) any court having jurisdiction thereover shall have the power to reform such provision to the extent necessary for such provision to
be enforceable under applicable law. 
  

	15.	HEADINGS 

  
 All headings used herein are for convenience only and shall not in any way affect the construction of, or be taken into consideration in interpreting,
this Agreement. 
  

	16.	COUNTERPARTS 

  
 This Agreement, and any amendment or modification entered into pursuant to Section 13 hereof, may be executed in any number of counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same instrument. 
  

	17.	ENTIRE AGREEMENT 

  
 This Agreement, on and as of the date hereof, constitutes the entire agreement between Employer and Executive with respect to the subject matter hereof
and all prior or contemporaneous oral or written communications, understandings or agreements between Employer and Executive with respect to such subject matter, including, without limitation, the Executive’s offer letter, are hereby
superseded; 

  

					
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provided, however, that thus Agreement does not modify or affect the terms of any Option Letter Agreement or the Option Plan, except as explicitly set forth
herein. 
  

	18.	CERTAIN PAYMENTS TO EXECUTIVE 

  
 Employer shall reimburse Executive, on an annual basis, in an annual amount not to exceed $10,000, for his attorney fees incurred in connection with the
negotiation and execution of this Agreement and/or in connection with estate tax and financial planning. Executive shall be entitled to receive an additional payment or payments (a “gross-up payment”) in an amount such that, after payment
by the Executive of all taxes associated with the payment of the foregoing fees by Employer (including any interest or penalties imposed with respect to such taxes), Executive will realize no additional personal income taxes as a result of such
payment of fees. 
  

					
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 IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set forth
above. 
  

			
	 IAN MORRIS

	
	 /s/ Ian Morris

  

			
	 EMPLOYER:

	
	 HOUSEVALUES, INC.

		
	By	 	 /s/ Mark Powell

	 Its
	 	 Chairman

  

					
	 EMPLOYMENT AGREEMENT
	 	 	 	 
	 	 	12Incentive Stock Option Letter Agreement

 Exhibit 10.4 
  
 HOUSEVALUES, INC. 
 1999 STOCK INCENTIVE PLAN 
 INCENTIVE STOCK OPTION LETTER AGREEMENT 
  

	TO:	Ian Morris 

  
 We are pleased to inform you that you have been selected by the Company to receive a stock option (the “Option”) to purchase shares (the “Option Shares”) of the Company’s Common Stock under
the Company’s 1999 Stock Incentive Plan, as amended (the “Plan”). 
  
 The terms of the Option are as set forth in this Agreement and in the Plan, a copy of which is attached. The Plan is incorporated by reference into this Agreement, which means that this Agreement is limited by and
subject to the express terms and provisions of the Plan. Capitalized terms that are not defined in this Agreement have the meanings given to them in the Plan. 
  

The most important terms of the Option are summarized as follows: 
  

			
	Grant Date:	  	May 13, 2004
		
	Number of Shares:	  	100,000
		
	Exercise Price:	  	$2.20 per share
		
	Expiration Date:	  	May 13, 2014
		
	Vesting Base Date:	  	May 13, 2004
		
	Type of Option:	  	Incentive Stock Option (“ISO”)

  
 Vesting and
Exercisability: The Option will vest and become exercisable according to the following schedule, and the other terms of this Agreement, subject to your continued employment or service relationship with the Company or a Related Corporation:

  

			
	 Date On and After Which
 Option is Vested and Exercisable:
	 	 Portion of Total Option
 Which Is
 Vested and Exercisable:

		
	Three months from Vesting Base Date	 	6.25%
		
	Each three-month period completed thereafter	 	An additional 6.25%
		
	Four years from Vesting Base Date	 	100%

  
 Accelerated
Vesting: 
  
 Notwithstanding the foregoing, in the event (a)
you terminate your employment for “Good Reason” (as defined in your Employment Agreement), 100% of the unvested portion of the Option will automatically become vested and exercisable immediately prior to termination, or (b) the Company
terminates your employment other than for “Cause” (as defined in your Employment Agreement), the unvested portion of the Option that would have been exercisable 

  

 
as of the fourth quarterly vesting following termination will automatically become vested and exercisable immediately prior to termination. 
  
 Notwithstanding the foregoing, upon a Corporate Transaction (as defined in
the Plan) (other than a Related Party Transaction), 50% of the unvested portion of the Option will automatically become vested and exercisable and the remaining unvested portion of the Option will vest in equal quarterly increments over the shorter
of (i) two years immediately following such Corporate Transaction, or (ii) the amount of time remaining under the Option’s original vesting schedule. This provision is in addition to, and not in lieu of, any other rights provided in Section 12
of the Plan concerning the effect of a Corporate Transaction on outstanding Options. 
  
 Termination of Option: The unvested portion of the Option will terminate automatically and without further notice immediately upon termination (voluntary or involuntary) of your employment or service
relationship with the Company or a Related Corporation. The vested portion of the Option will terminate automatically and without further notice on the earliest of the following dates: 
  
 (a) in the case of termination of your employment or service relationship
with the Company or a Related Corporation for any reason other than “Cause” (as defined in your Employment Agreement), on the Expiration Date, and: 
  
 (b) in the case of termination of your employment or service relationship with the Company or a Related Corporation by reason of “Cause” (as
defined in your Employment Agreement), three months after such termination; and 
  
 (c) the Expiration Date. 
  
 The Option must be
exercised within three months after termination of employment for reasons other than death or Disability and one year after termination of employment due to Disability to qualify for the beneficial tax treatment afforded ISOs. 
  
 It is your responsibility to be aware of the date your Option terminates.

  
 ISO Qualification: The Option is intended to
qualify as an ISO under federal income tax law, but the Company does not represent or guarantee that the Option qualifies as such. 
  
 If the aggregate Grant Date fair market value of the shares with respect to which the Option first becomes exercisable during any calendar year (under the
Option and all other ISOs you hold) exceeds $100,000, the excess portion will be treated as a nonqualified stock option, unless the Internal Revenue Service changes the rules and regulations governing the $100,000 limit for ISOs. A portion of the
Option may be treated as a nonqualified stock option if certain events cause exercisability of the Option to accelerate. 
  
 Notice of Disqualifying Disposition: To obtain certain tax benefits afforded to ISOs you must hold the shares issued upon the exercise of the
Option for two years after the Grant Date and one year from the date of exercise. You may be subject to the alternative minimum tax at the time of exercise. You should obtain tax advice when exercising the Option and prior 

  

 -2- 

 
to the disposition of the Option Shares. By accepting the Option, you agree to promptly notify the Company if you dispose of any of the Option Shares within
one year from the date you exercise all or part of the Option or within two years from the Grant Date. 
  
 Method of Exercise: You may exercise the Option by giving written notice to the Company, in form and substance satisfactory to the Company, which
will state the election to exercise the Option and the number of shares of Common Stock for which you are exercising the Option. The written notice must be accompanied by full payment of the exercise price for the number of shares of Common Stock
you are purchasing. 
  
 Form of Payment: You may pay the
Option exercise price, in whole or in part, in cash, by check or, unless the Plan Administrator determines otherwise, by (a) tendering (either actually or by attestation) mature shares of Common Stock (generally, shares you have held for a period of
at least six months) having a fair market value on the day prior to the date of exercise equal to the exercise price (you should consult your tax advisor before exercising the Option with stock you received upon the exercise of an incentive stock
option); (b) if and so long as the Common Stock is registered under the Securities Exchange Act of 1934, as amended, delivery of a properly executed exercise notice together with irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds necessary to pay the exercise price all in accordance with the regulations of the Federal Reserve Board; or (c) such other consideration as the Plan Administrator may permit. 
  
 Withholding Taxes: As a condition to the exercise of the Option, you
must make such arrangements as the Company may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with such exercise. The Company has the right to retain without notice sufficient
shares of stock to satisfy the withholding obligation. Unless the Plan Administrator determines otherwise, you may satisfy the withholding obligation by electing to have the Company withhold from the shares to be issued upon exercise that number of
shares having a fair market value equal to the amount required to be withheld (up to the minimum required federal tax withholding rate). 
  
 Limited Transferability: During your lifetime only you can exercise the Option. The Option is not transferable except by will or by the applicable
laws of descent and distribution, except that nonqualified stock options may be transferred to the extent permitted by the Plan Administrator. The Plan provides for exercise of the Option by a designated beneficiary or the personal representative of
your estate. 
  
 Further Restrictions: Section 13 of the
Plan provides additional restrictions and grants additional rights to the Company until such time as the Company may effect a registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act. The Plan grants the Company a right of
repurchase such that any shares purchased under the Plan may be repurchased by the Company in the Company’s sole discretion upon termination of your employment or service relationship with the Company The Company hereby retains the foregoing
repurchase right in the event your employment relationship with the Company is terminated for “Cause” (as defined in your Employment Agreement), but agrees not to exercise such right in all other circumstances. Further, any proposed sale
of shares issued to you upon 

  

 -3- 

 
the exercise of the Option is subject to the Company’s right of first refusal. Upon exercise, the Plan Administrator may require you to sign a Stock
Purchase Agreement that sets out these restrictions in more detail. You may request a copy of this agreement prior to exercise of the Option. 
  
 Registration: Your particular attention is directed to Section 16.3 of the Plan, which describes certain important conditions relating to federal
and state securities laws that must be satisfied before the Option can be exercised and before the Company can issue any shares to you. By accepting the Option, you hereby acknowledge that you have read and understand Section 16.3 of the Plan.

  
 Binding Effect: This Agreement will inure to the
benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns. 
  
 Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation: By entering into this Agreement and accepting
the grant of the Option evidenced hereby, you acknowledge: (a) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (b) that the grant of the Option is a onetime benefit which does not create any
contractual or other right to receive future grants of options, or benefits in lieu of options; (c) that all determinations with respect to any such future grants, including, but not limited to, the times when options will be granted, the number of
shares subject to each option, the option price, and the time or times when each option will be exercisable, will be at the sole discretion of the Company; (d) that your participation in the Plan is voluntary; (e) that the value of the Option is an
extraordinary item of compensation which is outside the scope of your employment contract, if any; (f) that the Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (g) that the vesting of the Option ceases upon termination of employment or service relationship with the Company for any reason except as may otherwise be
explicitly provided in the Plan or this Agreement or otherwise permitted by the Plan Administrator; (h) that the future value of the underlying Option Shares is unknown and cannot be predicted with certainty; and (i) that if the underlying Option
Shares do not increase in value, the Option will have no value. 
  

 -4- 

 Acceptance and Acknowledgement. Please execute the following Acceptance and Acknowledgment and
return it to the undersigned. By signing the following, you understand that as of the Grant Date, this Agreement and the Plan set forth the entire understanding between you and the Company regarding the Option and supersede all prior oral and
written agreements on the subject. 
  

	
	 Very truly yours,

	
	 HouseValues, Inc.

	
	 /s/ Mark Powell

	 By Mark Powell

	 Its Chairman of the Board

  

 -5- 

 ACCEPTANCE AND ACKNOWLEDGMENT 
  
 I, a resident of the State of Washington, accept the Option described in this Agreement and in the Plan, and acknowledge
receipt of a copy of this Agreement and a copy of the Plan. I have read and understand the Plan. 
  

					
			
	 Dated: 6/21/04
	 	 	 	/s/ Ian Morris
	 	 	 	 	Ian Morris
			
	  	 	 	 	 Address 

	 Taxpayer I.D. Number
	 	 	 	 

  

 -6-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]