Document:

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                                                                   EXHIBIT 10.2

                             [HOMESTORE LETTERHEAD]

October 7, 2002

Mr. Allan Dalton
Franklin Lakes, NJ  07417

Dear Allan:

On behalf of Homestore, Inc., it is with great pleasure that I extend to you our
offer of employment. The specifics of this offer are as follows:

JOB TITLE:                   President, Realtor.com

START DATE:                  October 7, 2002

ANNUAL SALARY:               $325,000

MAXIMUM BONUS (TARGET)       $325,000

MAXIMUM BONUS (ABOVE         $325,000

PLAN ACHIEVEMENT)

STOCK OPTIONS:               A stock option grant of 1,200,000 options, with
                             grant date and vesting schedules as described below

VACATION:                    Four Weeks (20 days) per anniversary year

EMPLOYMENT STATUS:           Exempt, Regular-Full Time Employee

You will be eligible for an annual bonus with a "target" bonus of 100 percent of
your annual base salary, subject to achievement of certain goals and objectives,
with the ability to earn a bonus of up to 200 percent of your annual base
salary, subject to exceeding such goals and objectives. Your "target bonus" is
defined as 100% of your annual base salary as of the date hereof, which is
$325,000.00. With respect to 2002, the amount of any bonus earned will be
prorated based on the portion of the year remaining on your start date. Your
prorated target bonus for 2002 and the first three quarters of 2003 equal to
100% of your salary will be guaranteed, payable 50% on your start date and 50%
on December 31, 2002.

As President of Realtor.com, you will have dual reporting responsibilities. You
will report to the CEO of Homestore for overall direction, strategy, performance
evaluation and administration of compensation. To ensure the Company leverages
its investments, expenses and revenue opportunities to achieve optimal corporate
performance, all profit centers at Homestore report to the COO who is
accountable to the CEO and Board of Directors of Homestore for the total Line of
Business financial performance of the Company. Since you will manage significant
profit centers for the Company, you will be accountable to the COO for purposes
of achieving the leverage goals of the Company.

Upon commencement of your employment and subject to Board of Directors approval,
you will receive a grant of 1,200,000 stock options in Homestore, Inc. The
Board, at their next scheduled meeting following your date of hire, will set the
option price at the fair market value. The options will vest according to a
schedule whereby 250,000 options vest on the date you join the Company and the
remaining 950,000 options will vest monthly at a rate of 1/48th of the shares
per month on the first day of each month beginning

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with November 1, 2002. Options expire 10 years after the grant date or one year
after termination, whichever comes earlier.

You will be reimbursed for your reasonable expenses incurred on behalf of
Homestore upon providing appropriate documentation in accordance with Homestore
policies, which expenses will include air travel and other transportation
expenses, hotel accommodations, and telecommunications expenses (including
fixed, mobile and Internet connections).

You will be reimbursed for reasonable expenses associated with your relocation
to Westlake Village. This includes taxes and tax gross-up amounts associated
with payments made to relocate you to Westlake Village. The Company is very
interested in facilitating your timely relocation and settling you and your
family in a permanent residence in Westlake Village. Accordingly, at your
request, the Company will purchase your house at its appraised value. The
company will pay for approximately $10-15,000 of fixup expenses of your New
Jersey house to eliminate certain facilities accommodating the medical needs of
your family. Also, you will be terminating a twelve month lease of approximately
$4700/month on an apartment in Boston. The Company will reimburse you for the
difference in sublease payments you arrange and your actual remaining lease
payments on the apartment.

If you accept this offer of employment, you will be scheduled for a new employee
orientation session during your first month of employment to introduce you to
Homestore employee benefits and policies.

As a regular, full-time employee, you will be eligible for the group health,
disability and life insurance and other fringe benefits that are made available
by Homestore to other similarly situated employees pursuant to the terms and
conditions set forth in the applicable benefit plans and policies. Further
details will be discussed with and provided to you on your first day of
employment.

On your first day of work, new hire documents will be completed to assure that
there is no delay in the processing of your paycheck. In accordance with federal
law, you will be required to provide documentation to Human Resources within 72
hours of your commencement of employment verifying your employment eligibility.
Additionally, you will be required to sign Homestore's Confidentiality Agreement
(a copy of which is attached to this letter).

We are very pleased to extend this offer to you. I join the rest of the
Homestore team in looking forward to working with you, and know that our success
will be even greater with you aboard.

Accompanying this letter is an Executive Retention and Severance Agreement.
Please indicate your acceptance of this offer by signing and returning the
Executive Retention and Severance Agreement and the original letter to me.

Sincerely,

/s/ W. Michael Long

W. Michael Long
Chief Executive Officer

I HAVE READ AND UNDERSTAND THE TERMS OF THIS OFFER AND CONSENT TO ALL OF THE
TERMS AND PROVISIONS CONTAINED HEREIN.

NAME /s/ Allan Dalton                          DATE October 7, 2002
     ---------------------------                    ---------------------------
         ALLAN DALTON<PAGE>

                                                                   EXHIBIT 10.3

                                  ALLAN DALTON
                            ANNUAL BONUS PLAN - 2002

You are eligible for an annual "target" bonus of 100% of salary at achievement
of plan and up to 200% of salary for over achievement of plan. Because the
credibility of the 2002 business plan is not sufficiently reliable to be used as
the primary measure for awarding bonuses, the 2002 award will be based on the
following:

Company Financial Performance - 70%

The following goals will be considered:

By December 31, 2002, have the Company positioned so that it is operating on a
positive cash flow basis. Positive cash flow means that Operating Income plus
non-cash charges (excluding any one-time expenses that the Compensation
Committee agrees to exclude from the calculation) is greater than zero. (Note:
Whether the month of December meets this test will not be the only criteria.
Rather, the trend at the end of the year plus the 2003 plan will evidence if
this goal has been achieved.)

Position the company by year end so that it is capable of capturing attractive
shareholder value. This will be evidenced by the attractiveness of the 03 plan.
(Note: For the past few months and for the balance of the year, in addition to
the requirement for crisis management relating to a number of issues, management
will be rationalizing each business line and assets of the company. It is
expected, therefore, that by year end, management will have positioned the
company for attractive and sustained growth. The validity and attractiveness of
the "03 plan will provide such evidence.)

Business Unit Performance and Organizational Development - 30%

It would be preferable to measure business unit performance against specific
revenue and income targets established in the AOP. However, because the
credibility of the 2002 business unit plan is not sufficiently reliable to be
used as the primary measure for awarding bonuses, and because substantial
changes to the business are anticipated, the 2002 award will be based on the
following:

The business units under your management (i.e. the Realtor business unit
including HomeFair and Imaging) achieving the revised revenue forecast presented
to the Board at the May 22, 2002 meeting (i.e. Realtor/HF/Imaging achieving
total revenue of $85,125,000).

By December 31, 2002, have business units under your management positioned so
that they are operating on a positive cash flow basis. Positive cash flow means
that Operating Income plus non-cash charges (excluding any one-time expenses
that the Compensation Committee agrees to exclude from the calculation) is
greater than zero. (Note: Whether

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the month of December meets this test will not be the only criteria. Rather, the
trend at the end of the year plus the 2003 plan will evidence if this goal has
been achieved.)

Position the business units under your control by year end so that they are
capable of capturing attractive shareholder value. This will be evidenced by the
attractiveness of the 03 plan. (Note: For the past few months and for the
balance of the year, in addition to the requirement for crisis management
relating to a number of issues, management will be rationalizing each business
line and assets of the company. It is expected, therefore, that by year end,
management will have positioned the company for attractive and sustained growth.
The validity and attractiveness of the "03 plan will provide such evidence.)

Have each business unit competitively positioned. Product launches are such that
Realtor.com continues to be considered a leader in its category.

Rationalize viability of core businesses.

Have strong next level of senior management in place with strong team attitude.

Have organizational structure in place to serve company's needs going forward.
This includes succession planning.

Complete strategic plan for each business unit.

Establish sound compensation plans for next level of management with appropriate
balance between salary, incentives and options for 2003.

Final determination of bonus award if any is subject to Compensation Committee
approval. Such approval shall be based on the Company's overall position and
performance at the time performance is reviewed by the Committee. Final approved
bonus will be paid after year end close (i.e. bonus is annual, not quarterly).

THE DETERMINATION OF YOUR TARGET 2002 BONUS HAS BEEN SUPERCEDED BY YOUR OFFER
LETTER DATED OCTOBER 7, 2002 FROM W. MICHAEL LONG WHICH GUARANTEED YOUR TARGET
2002 BONUS.

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