Document:

exv10w01

 

Exhibit 10.01

PO Box 7850, MS 2550

Mountain View, CA 94039-7850

August 21, 2007

Stephen M. Bennett

			
	Re:	 	Transition Agreement (the “Transition Agreement”)

Dear Steve:

          Thank you for your history of strong leadership at Intuit Inc. (“Intuit”) and for agreeing to
provide ongoing leadership at Intuit during the coming months. Your continued support through this
transition period is important to our continued success.

          This Transition Agreement confirms the terms of your separation from the employment of Intuit
(referred to herein as your “Resignation”) in connection with changes in leadership at Intuit,
including the agreed benefits provided in exchange for your transition services and certain waivers
and releases contained herein.

	1.	 	Resignation; Transition Activities.

	 	a.	 	You and Intuit have agreed that your Resignation is effective as of January
1, 2008 (the “Resignation Date”). You will remain the President and Chief Executive
Officer of Intuit at your regular salary and benefits through the Resignation Date.
On or shortly after August 22, 2007, Intuit will announce your Resignation.
	 
	 	b.	 	You will provide full-time consulting services to Intuit from the Resignation
Date through the earliest of (i) July 31, 2008, (ii) the date upon which you commence
full-time employment with another company or (iii) the date upon which you or the
Company earlier terminate your services (the “Transition Period”). During the
Transition Period, and for so long as you continue to provide consulting services to
Intuit that are reasonably acceptable to Intuit, you will receive a monthly consulting
fee of $91,700 (the “Consulting Fee”). Upon the termination of your services during
the Transition Period, you shall no longer be entitled to receive payments of the
Consulting Fee.

	2.	 	Fiscal 2008 Target Bonus. As additional compensation for your employment through
January 1, 2008 and subject to Intuit’s achievement of performance criteria through

 

 

July 31, 2008, you will be eligible to receive a maximum target bonus for the 2008 fiscal
year of 160% of your current base salary, or $1,760,000, less applicable deductions and
withholdings (the “FY08 Target Bonus”). The amount of the FY08 Target Bonus (if any) will
be determined by the Compensation and Organizational Development Committee (the
“Compensation Committee”) of the Company’s Board of Directors (the “Board”) in its sole
discretion. The FY08 Target Bonus replaces any annual performance bonus under Intuit’s
Senior Executive Incentive Plan for fiscal year 2008 as previously set forth in your
Amended and Restated Employment Agreement with the Company, dated July 30, 2003 (the
“Employment Agreement”). Any payment of the FY08 Target Bonus approved by the Compensation
Committee shall be paid on or about August 31, 2008 and no later than March 15, 2009, in
order to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”).

	3.	 	Compensation for Board Service. During the Transition Period, you will not be
entitled to any compensation (including any cash retainer and/or annual or other equity grant)
for your Board services other than the New Option and New RSU (each as defined below), which
shall be granted to you as additional compensation for your employment through January 1, 2008
and Board services. If you remain a member of the Board following the end of the Transition
Period, you shall be eligible for the standard cash retainer and/or equity compensation
provided to the members of Intuit’s Board (other than an Initial Option Grant for non-employee
directors). Your Board position may only be terminated by Intuit according to the provisions
of the Company’s bylaws.
	 
	4.	 	Equity Awards.

	 	a.	 	As additional compensation for your employment through January 1, 2008 and
Board services, the Compensation Committee shall grant to you a stock option to
purchase 50,000 shares of Intuit’s common stock (the “New Option”) under the 2005
Equity Incentive Plan (the “2005 Plan”) on August 24, 2007. The per share purchase
price of the shares subject to the New Option will be the closing share price on
August 24, 2007. The New Option will vest in full on July 31, 2008 assuming you
remain a member of the Board through this date. Upon exercise of the New Option,
Intuit shall make appropriate deductions and withholdings with respect to such
exercise.
	 
	 	b.	 	As additional compensation for your employment through January 1, 2008 and
Board services, the Compensation Committee shall grant to you restricted stock units
to acquire 50,000 shares of Intuit’s common stock (the “New RSU”) under the 2005 Plan
on August 24, 2007. The New RSU will vest in full and be distributed to you on July
31, 2008 (less applicable deductions and withholdings) assuming you remain a member of
the Board through this date.
	 
	 	c.	 	Your unvested restricted stock units to acquire Intuit’s common stock set
forth on the Stock Closing Statement and Intuit Employee Stock Award Information
Memorandum delivered to you herewith (the “Equity Statement”) will continue to vest
for so long as you remain a member of the Board. Your stock options to acquire
Intuit’s common stock (other than the Nonqualified Stock Option Agreement dated
January 24, 2000) will continue to vest and shall remain

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exercisable for so long as you remain a member of the Board as set forth on the
Equity Statement. Please review the Equity Statement and your current equity award
documentation carefully as there are no extensions to the expiration date of your
current equity awards. Please contact Sharon Savatski at (650) 944–6504 if you need
more information.

	5.	 	Acknowledgment of Payment of Wages. On the Resignation Date, Intuit will deliver to
you a final paycheck that includes payment for all remaining accrued vacation, accrued salary
or fees, reimbursable expenses, and any similar payments due and owing to you from Intuit as
of the Resignation Date.
	 
	6.	 	Separation Payment; Benefits. Following the effective date (the “Release Effective
Date”) of the Release Agreement attached as Exhibit A (the “Release”), you shall be
provided all of the following benefits in exchange for your transition services, your waiver
and release of claims in favor of Intuit and its officers, directors, employees, agents,
representatives, subsidiaries, divisions, affiliated companies, successors, and assigns
(collectively, the “Company”). You have notified Intuit of your Resignation following the
Board’s designation of a new President and Chief Executive Officer of the Company, and for
purposes of your Employment Agreement, your current equity awards and your Note (as defined
below), this Resignation shall be deemed an “Involuntary Termination.”

	 	a.	 	Cash Severance. A single lump sum severance payment of $550,000.00
(equal to six months of your current annual base salary), less applicable deductions
and withholdings payable within 30 days following the Release Effective Date.
	 
	 	b.	 	Equity Acceleration. You will be entitled to full acceleration of
vesting of your restricted shares granted January 24, 2000 and pro rata acceleration
of vesting of your restricted stock units (and distribution of the vested restricted
stock units following such acceleration) as per the terms of the respective applicable
agreements as set forth on the Equity Statement.
	 
	 	c.	 	Other Benefits. You shall be provided the following benefits:

	 	(i)	 	Intuit will provide you and your spouse with access to core
medical coverage at your cost from your Resignation Date through the earlier
of (a) the date that you and your spouse become eligible for group medical
coverage by any other employer of you or your spouse; (b) each of your
respective Medicare eligibility dates; or (c) each of your respectively
attaining age 65;
	 
	 	(ii)	 	Your Amended and Restated Secured Balloon Promissory Note,
dated November 26, 2001 (the “Note”), will remain unchanged, and pursuant to
its terms, the entire principal balance of the Note and all accrued interest
(if any) shall become due and payable on December 31, 2009 (two years from the
Resignation Date). Intuit will continue to administer the Note in accordance
with the Sarbanes-Oxley Act and other applicable laws.

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	7.	 	Consideration for Release. In consideration of your signing and not revoking this
Transition Agreement and your execution and not revoking the Release following your
Resignation Date, the Company agrees to provide you with the benefits set forth in this
Transition Agreement. Because this Transition Agreement supersedes your Employment Agreement,
you understand that if you do not sign the Transition Agreement or if you revoke the signed
Transition Agreement, or revoke the Release, as described in Paragraph 18 below, the Company
has no obligation to provide you with the benefits provided for in this Transition Agreement
(regardless of whether a release of claims is required pursuant to your Employment Agreement).
	 
	8.	 	Indemnity Coverage. Intuit shall continue to indemnify you and maintain D&O coverage
in accordance with your Indemnity Agreement dated July 10, 2002, with Intuit.
	 
	9.	 	Return of Company Property. By signing below, you represent that on or before the
Resignation Date you will return all Intuit property and data of any type whatsoever that was
in your possession or control.
	 
	10.	 	Confidential Information. You hereby acknowledge that as a result of your employment
with Intuit you have had access to Intuit’s confidential information. As a condition to the
effectiveness of this Transition Agreement, you agree to execute and abide by Intuit’s
Employee Proprietary Invention and Assignment Agreement (“Confidentiality Agreement”), and you
agree you will hold all such confidential information in strictest confidence and that you may
not make any use of such confidential information. You further confirm that you have
delivered to Intuit all documents and data of any nature containing or pertaining to such
Confidential Information and that you have not taken with you any such documents or data or
any copies thereof.
	 
	11.	 	Non-Disparagement. You agree that you shall not make, participate in the making of,
or encourage any current or former Company employees or any other person to make, any
statements, written or oral, which, disparage, or defame the goodwill or reputation of the
Company or its products, services, agents, representatives, directors, officers, shareholders,
attorneys, employees, vendors, affiliates, successors or assigns, or any person acting by,
through, under or in concert with any of them. The Company agrees that it will ensure that
individuals holding the positions of chairman of the board, chairman of the executive
committee, chief executive officer, chief financial officer, senior vice president of human
resources and general counsel, in each case as of the Release Effective Date, shall not make,
participate in the making of, or encourage any current or former Company employees or other
persons to make any statements, written or oral, which disparage or defame you or your
reputation or the services you have performed for the Company. Nothing in this paragraph shall
prohibit either party from providing truthful testimony in response to a subpoena or other
compulsory legal process.
	 
	12.	 	2003 RSU Election. Pursuant to your 2002 Equity Incentive Plan Stock Bonus Agreement
(Restricted Stock Units), dated July 30, 2003 (the “2003 RSU”), you are entitled to make a
one-time irrevocable election to have Intuit issue fifty-percent of the shares that are vested
as of July 31, 2007 at an earlier date than the scheduled issuance date set forth in the
section entitled “Issuance of Shares Under this Award” of the 2003 RSU. You are hereby making
such 2003 RSU election, and the execution of this

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Transition Agreement by Intuit shall be deemed Intuit’s approval and acceptance of this
2003 RSU election by the Compensation Committee, resulting in 340,000 shares of Intuit
common stock being issued to you on January 2, 2008 (the first trading day of 2008)
pursuant to the terms and restrictions of the 2003 RSU. You acknowledge and agree that
Intuit shall deduct, from the number of shares to be issued to you, a number of shares
having a value equal to the amount of taxes Intuit is required to withhold and remit on
your behalf to the applicable tax authorities.

	13.	 	Legal and Equitable Remedies. Each party shall have the right to enforce this
Transition Agreement and any of its provisions by injunction, specific performance or other
equitable relief without prejudice to any other rights or remedies the other party may have at
law or in equity for breach of this Transition Agreement. No payments due you hereunder shall
be subject to mitigation or offset.
	 
	14.	 	Arbitration of Disputes. Except for claims for injunctive relief arising out of a
breach of the Confidentiality Agreement (as defined in Section 10), you and the Company agree
to submit to mandatory binding arbitration any future disputes between you and the Company,
including any claim arising out of or relating to this Transition Agreement. By signing
below, you and the Company waive any rights you and the Company may have to trial by jury of
any such claims. You agree that the American Arbitration Association will administer any such
arbitration(s) under its National Rules for the Resolution of Employment Disputes, with
administrative and arbitrator’s fees to be borne by the Company. The arbitrator shall issue a
written arbitration decision stating his or her essential findings and conclusions upon which
the award is based. A party’s right to review of the decision is limited to the grounds
provided under applicable law. The parties agree that the arbitration award shall be
enforceable in any court having jurisdiction to enforce this Transition Agreement. This
Transition Agreement does not extend or waive any statutes of limitations or other provisions
of law that specify the time within which a claim must be brought. Notwithstanding the
foregoing, each party retains the right to seek preliminary injunctive relief in a court of
competent jurisdiction to preserve the status quo or prevent irreparable injury before a
matter can be heard in arbitration.
	 
	15.	 	Attorneys’ Fees. If any legal action arises or is brought to enforce the terms of
this Transition Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys’ fees, costs and expenses from the other party, in addition to any other relief to
which such prevailing party may be entitled, except where the law provides otherwise. The
costs and expenses that may be recovered exclude arbitration fees pursuant to Section 14
above.
	 
	16.	 	No Admission of Liability. This Transition Agreement is not and will not be construed
or contended to be an admission or evidence of any wrongdoing or liability on your part or the
part of the Company, its representatives, attorneys, agents, partners, officers, shareholders,
directors, employees, subsidiaries, affiliates, divisions, successors or assigns. This
Transition Agreement will be afforded the maximum protection allowable under California
Evidence Code Section 1152 and/or any other state or Federal provisions of similar effect.

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	17.	 	Review of Transition Agreement; Release. You may take up to twenty-one (21) days
from the date you receive this Transition Agreement, to consider whether to accept these
terms. By signing below, you affirm that you were advised to consult with an attorney before
signing this Transition Agreement and were given ample opportunity to do so. You understand
that this Transition Agreement will not become effective until you return the original
properly signed Transition Agreement to Intuit, Attention: Sherry Whiteley, 2700 Coast Avenue,
Mountain View, CA 94043, and after expiration of the revocation period without revocation by
you.
	 
	18.	 	Revocation of Agreement; Release. You acknowledge and understand that you may revoke
this Transition Agreement, or the Release set forth in Exhibit A, by faxing a written
notice of revocation to Sherry Whiteley at 650-944-5225 any time up to seven (7) days after
you sign the applicable document. After the revocation period has passed, however, you may no
longer revoke the applicable agreement.
	 
	19.	 	Subsidiaries. This Transition Agreement is binding on Intuit and all of its
subsidiaries, and all of their successors and assigns.
	 
	20.	 	Entire Agreement. This Transition Agreement together with the Confidentiality
Agreement (as defined in Section 10) is the entire agreement between you and Intuit with
respect to the subject matter herein and supersedes all prior negotiations and agreements,
whether written or oral, relating to this subject matter. You acknowledge and agree that you
are not entitled to any other payments or benefits from Intuit, included but not limited to
any further payments or benefits pursuant to the provisions of your Employment Agreement or
your current equity agreements, other than those expressly set forth in this Transition
Agreement. You acknowledge that neither Intuit, nor its agents or attorneys, made any promise
or representation, express or implied, written or oral, not contained in this Transition
Agreement to induce you to execute this Transition Agreement. You acknowledge that you have
signed this Transition Agreement voluntarily and without coercion, relying only on such
promises, representations and warranties as are contained in this document and understand that
you do not waive any right or claim that may arise after the date this Transition Agreement
becomes effective.
	 
	21.	 	Modification. By signing below, you acknowledge your understanding that this
Transition Agreement may not be altered, amended, modified, or otherwise changed in any
respect except by another written agreement that specifically refers to this Transition
Agreement, executed by your and Intuit’s authorized representatives.
	 
	22.	 	Governing Law. This Transition Agreement is governed by, and is to be interpreted
according to, the laws of the State of California.
	 
	23.	 	Savings and Severability Clause. Should any court, arbitrator or government agency
of competent jurisdiction declare or determine any of the provisions of this Transition
Agreement to be illegal, invalid or unenforceable, the remaining parts, terms or provisions
shall not be affected thereby and shall remain legal, valid and enforceable. Further, it is
the intention of the parties to this Transition Agreement that, if a court, arbitrator or
agency concludes that any claim under the Release may not be released as a matter of law, the
General Release in the Release and the Waiver Of Unknown Claims in

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the Release shall otherwise remain effective as to any and all other claims. For purposes
of interpretation of this Transition Agreement, each party shall be deemed a drafter of the
Transition Agreement.

	24.	 	Withholding Taxes; 409A. All payments made under this Agreement shall be subject to
reduction to reflect all federal, state, local and other taxes required to be withheld by
applicable law. To the extent (i) any payments to which you become entitled under this
Agreement, or any agreement or plan referenced herein, in connection with your termination of
employment with the Company constitute deferred compensation subject to Section 409A of the
Code, and (ii) you are deemed at the time of such termination of employment to be a
“specified” employee under Section 409A of the Code, then such payment or payment shall not be
made or commence until the earliest of (i) the expiration of the six (6)-month period
measured from the date of your “separation from service” (as such term is at the time defined
in Treasury Regulations under Section 409A of the Code) with the Company; (ii) the date you
become “disabled” (as defined in Section 409A of the Code); or (iii) the date of your death
following such separation from service; provided, however, that such deferral
shall only be effected to the extent required to avoid adverse tax treatment to you, including
(without limitation) the additional twenty percent (20%) tax for which you would otherwise be
liable under Section 409A(a)(1)(B) of the Code in the absence of such deferral. Upon the
expiration of the applicable deferral period, any payments which would have otherwise been
made during that period (whether in a single sum or in installments) in the absence of this
paragraph shall be paid to you or your beneficiary in one lump sum.
	 
	25.	 	Effective Date. The effective date of this Transition
Agreement shall be the date that
is seven (7) days after the date this Transition Agreement was signed, without being
subsequently timely revoked, by you (the “Effective Date”).

If this Transition Agreement accurately sets forth the terms of your transition and separation from
Intuit and if you voluntarily agree to accept the terms of this Transition Agreement, please sign
below and return it to Sherry Whiteley.

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PLEASE REVIEW CAREFULLY. THIS TRANSITION AGREEMENT CONTAINS A
RELEASE OF KNOWN AND UNKNOWN CLAIMS.

Sincerely,

INTUIT INC.

	 	 	 	 	 
	/s/ William V. Campbell 

 

William V. Campbell

	 	 	 	Date: 8/21/07
	 
	 	 	 	 
	REVIEWED, UNDERSTOOD AND AGREED:	 	 
	 
	 	 	 	 
	/s/ Stephen M. Bennett 

 

Stephen M. Bennett

	 	 	 	Date: 8/21/07

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EXHIBIT A

RELEASE AGREEMENT

          As required by the Transition Agreement, dated August 21, 2007 between you and Intuit Inc.
(the “Transition Agreement”) to which this Release Agreement (the “Release Agreement”) is attached
as Exhibit A, this Release Agreement sets forth below your waiver and release of claims in
favor of Intuit Inc. and its officers, directors, employees, agents, representatives, subsidiaries,
divisions, affiliated companies, successors, and assigns (collectively, the “Company”) in exchange
for the consideration provided for under the terms of the Transition Agreement.

	1.	 	General Release and Waiver of Claims.

	 	a.	 	The payments set forth in the Transition Agreement fully satisfy any and all
accrued salary, vacation pay, bonus and commission pay, stock-based compensation,
profit sharing, termination benefits or other compensation to which you may be
entitled by virtue of your employment with the Company or your termination of
employment. You acknowledge that you have no claims and have not filed any claims
against the Company based on your employment with or the separation of your employment
with the Company.
	 
	 	b.	 	To the fullest extent permitted by law, you hereby release and forever
discharge the Company, its successors, subsidiaries and affiliates, directors,
shareholders, current and former officers, agents and employees (all of whom are
collectively referred to as “Releasees”) from any and all existing claims, demands,
causes of action, damages and liabilities, known or unknown, that you ever had, now
have or may claim to have had arising out of or relating in any way to your employment
or non-employment with the Company through the Effective Date of this Release
Agreement (as defined in Section 11), including, without limitation, claims based on
any oral, written or implied employment agreement, claims for wages, bonuses,
commissions, stock-based compensation, expense reimbursement, and any claims that the
terms of your employment with the Company, or the circumstances of your separation,
were wrongful, in breach of any obligation of the Company or in violation of any of
your rights, contractual, statutory or otherwise. Each of the Releasees is intended
to be a third party beneficiary of this General Release and Waiver of Claims.

	 	(i)	 	Release of Statutory and Common Law Claims. Such
rights include, but are not limited to, your rights under the following
federal and state statutes: the Employee Retirement Income Security Act
(ERISA) (regarding employee benefits); the Occupational Safety and Health Act
(safety matters); the Family and Medical Leave Act of 1993; the Worker
Adjustment and Retraining Act (“WARN”) (notification requirements for
employers who are curtailing or closing an operation) and common law; tort;
wrongful discharge; public policy; workers’ compensation retaliation; tortious
interference with contractual relations, misrepresentation, fraud, loss of
consortium; slander, libel, defamation,

 

 

intentional or negligent infliction of emotional distress; claims for
wages, bonuses, commissions, stock-based compensation or fringe benefits;
vacation pay; sick pay; insurance reimbursement, medical expenses, and the
like.

	 	(ii)	 	Release of Discrimination Claims. You understand that
various federal, state and local laws prohibit age, sex, race, disability,
benefits, pension, health and other forms of discrimination, harassment and
retaliation, and that these laws can be enforced through the U.S. Equal
Employment Opportunity Commission, the National Labor Relations Board, the
Department of Labor, and similar state and local agencies and federal and
state courts. You understand that if you believe your treatment by the
Company violated any laws, you have the right to consult with these agencies
and to file a charge with them. Instead, you have decided voluntarily to
enter into this Release Agreement, release the claims and waive the right to
recover any amounts to which you may have been entitled under such laws,
including but not limited to, any claims you may have based on age or under
the Age Discrimination in Employment Act of 1967 (ADEA; 29 U.S.C. Section 621
et. seq.) (age); the Older Workers Benefit Protection Act (“OWBPA”) (age);
Title VII of the Civil Rights Act of 1964 (race, color, religion, national
origin or sex); the 1991 Civil Rights Act; the Vocational Rehabilitation Act
of 1973 (disability); The Americans with Disabilities Act of 1990
(disability); 42 U.S.C. Section 1981, 1986 and 1988 (race); the Equal Pay Act
of 1963 (prohibits pay differentials based on sex); the Immigration Reform and
Control Act of 1986; Executive Order 11246 (race, color, religion, sex or
national origin); Executive Order 11141 (age); Vietnam Era Veterans
Readjustment Assistance Act of 1974 (Vietnam era veterans and disabled
veterans); and California state statutes and local laws of similar effect.
	 
	 	(iii)	 	Releasees and you do not intend to release claims which you
may not release as a matter of law (including, but not limited to,
indemnification claims under applicable law). To the fullest extent permitted
by law, any dispute regarding the scope of this general release shall be
determined by an arbitrator under the procedures set forth below. This
Release Agreement shall not apply with respect to any claims arising under
your existing rights to indemnification and defense pursuant to (a) the
articles and bylaws of the Company for acts as a director and/or officer, (b)
any indemnification agreement with the Company as in effect immediately prior
to the date of the Transition Agreement, or (c) your rights of insurance under
any director and officer liability policy in effect covering the Company’s
directors and officers.

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	2.	 	Waiver of Unknown Claims. You expressly waive any benefits of Section 1542 of the
Civil Code of the State of California (and any other laws of similar effect), which provides:
	 
	 	 	“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

	3.	 	Covenant Not to Sue.

	 	a.	 	To the fullest extent permitted by law, you agree that you will not now or at
any time in the future pursue any charge, claim, or action of any kind, nature and
character whatsoever against any of the Releasees, or cause or knowingly permit any
such charge, claim or action to be pursued, in any federal, state or municipal court,
administrative agency, arbitral forum, or other tribunal, arising out of any of the
matters covered by paragraphs 1 and 2 above.
	 
	 	b.	 	You further agree that you will not pursue, join, participate, encourage, or
directly or indirectly assist in the pursuit of any legal claims against the
Releasees, whether the claims are brought on your own behalf or on behalf of any other
person or entity.
	 
	 	c.	 	Nothing herein prohibits you from: (1) providing truthful testimony in
response to a subpoena or other compulsory legal process, and/or (2) filing a charge
or complaint with a government agency such as the Equal Employment Opportunity
Commission, the National Labor Relations Board or applicable state anti-discrimination
agency.

	4.	 	Arbitration of Disputes. Except for claims for injunctive relief arising out of a
breach of the Confidentiality Agreement, you and the Company agree to submit to mandatory
binding arbitration any future disputes between you and the Company, including any claim
arising out of or relating to this Release Agreement. By signing below, you and the Company
waive any rights you and the Company may have to trial by jury of any such claims. You agree
that the American Arbitration Association will administer any such arbitration(s) under its
National Rules for the Resolution of Employment Disputes, with administrative and arbitrator’s
fees to be borne by the Company. The arbitrator shall issue a written arbitration decision
stating his or her essential findings and conclusions upon which the award is based. A
party’s right to review of the decision is limited to the grounds provided under applicable
law. The parties agree that the arbitration award shall be enforceable in any court having
jurisdiction to enforce this Release Agreement. This Release Agreement does not extend or
waive any statutes of limitations or other provisions of law that specify the time within
which a claim must be brought. Notwithstanding the foregoing, each party retains the right to
seek preliminary injunctive relief in a court of competent jurisdiction to preserve the status
quo or prevent irreparable injury before a matter can be heard in arbitration.

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	5.	 	Review of Release Agreement. You may take up to twenty-one (21) days from the date
you receive this Release Agreement, to consider whether to sign this Release Agreement. By
signing below, you affirm that you were advised to consult with an attorney before signing
this Release Agreement and were given ample opportunity to do so. You understand that this
Release Agreement will not become effective until you return the original of this Release
Agreement, properly signed by you, to the Company, Attention: Sherry Whiteley, 2700 Coast
Avenue, Mountain View, CA 94043, and after expiration of the revocation period without
revocation by you.
	 
	6.	 	Revocation of Release Agreement. You acknowledge and understand that you may revoke
this Release Agreement by faxing a written notice of revocation to Sherry Whiteley at
650-944-5225 any time up to seven (7) days after you sign it. After the revocation period has
passed, however, you may no longer revoke your Release Agreement.
	 
	7.	 	Entire Agreement. This Release Agreement and the Transition Agreement are the entire
agreement between you and the Company with respect to the subject matter herein and supersede
all prior negotiations and agreements, whether written or oral, relating to this subject
matter. You acknowledge that neither the Company nor its agents or attorneys, made any
promise or representation, express or implied, written or oral, not contained in this Release
Agreement to induce you to execute this Release Agreement. You acknowledge that you have
signed this Release Agreement voluntarily and without coercion, relying only on such promises,
representations and warranties as are contained in this document and understand that you do
not waive any right or claim that may arise after the date this Release Agreement becomes
effective.
	 
	8.	 	Modification. By signing below, you acknowledge your understanding that this Release
Agreement may not be altered, amended, modified, or otherwise changed in any respect except by
another written agreement that specifically refers to this Release Agreement, executed by your
and the Company’s authorized representatives.
	 
	9.	 	Governing Law. This Release Agreement is governed by, and is to be interpreted
according to, the laws of the State of California.
	 
	10.	 	Savings and Severability Clause. Should any court, arbitrator or government agency
of competent jurisdiction declare or determine any of the provisions of this Release Agreement
to be illegal, invalid or unenforceable, the remaining parts, terms or provisions shall not be
affected thereby and shall remain legal, valid and enforceable. Further, if a court,
arbitrator or agency concludes that any claim under paragraph 1 above may not be released as a
matter of law, the General Release in paragraph 1 and the Waiver Of Unknown Claims in
paragraph 2 shall otherwise remain effective as to any and all other claims.
	 
	11.	 	Effective Date. The effective date of this Release Agreement shall be the eighth day
following the date this Release Agreement was signed, without having been revoked within seven
(7) days thereafter, by you.

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Please sign this Release Agreement no earlier than your Resignation Date (as defined in the
Transition Agreement) and return it to Sherry Whiteley at the address above.

PLEASE REVIEW CAREFULLY. THIS RELEASE AGREEMENT CONTAINS A

RELEASE OF KNOWN AND UNKNOWN CLAIMS.

REVIEWED, UNDERSTOOD AND AGREED:

	 	 	 	 	 	 	 	 	 
	 

	 	                                                            

	 	 	 	Date:
	 	                                        
	 

	 	Stephen M. Bennett	 	 	 	 	 	 

DO NOT SIGN PRIOR TO THE RESIGNATION DATE

5exv4w2

 

Exhibit 4.2

LOCAL.COM CORPORATION

2007 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

I. NOTICE OF STOCK OPTION GRANT

Date: ____________

	 	 	 	 	 
	Optionee:

	 	____________
	 	 
	Address:

	 	____________	 	 
	 
	 	 	 	 
	 

	 	____________	 	 

Dear Optionee:

Pursuant to the terms and conditions of the company’s 2007 Equity Incentive Plan (the
‘Plan’), you have been granted (   ) an Incentive (   ) Non-Qualified Stock Option to
purchase ___shares (the ‘Option’) of stock as outlined below.

	 	 	 
	Granted To:
	 	 
	 
	 	 
	Grant Date:
	 	 
	 
	 	 
	Options Granted:
	 	 
	 
	 	 
	Option Price per Share: $

	 	Total Cost to Exercise: $
	 
	 	 
	Expiration Date:
	 	 
	 
	 	 
	Vesting Schedule:
	 	 

By my signature below, I hereby acknowledge receipt of this Option granted on the date shown above,
which has been issued to me under the terms and conditions of the Plan. I further acknowledge
receipt of the copy of the Plan and agree to conform to all of the terms and conditions of the
Option and the Plan.

	 	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 
	 	Date:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

 

 

     Unless otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Stock Option Agreement.

     Termination Period:

     Except as otherwise provided herein, this Option may be exercised, to the extent vested, for
three (3) months after Optionee ceases to be a “Service Provider” (as defined in the Plan), but in
no event later than the Term/Expiration Date as provided above.

          II. AGREEMENT

     1. Grant of Option. The Company hereby grants to the Optionee an Option to purchase
the Common Stock (the “Shares”) set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the “Exercise Price”). Notwithstanding anything to the contrary
anywhere else in this Option Agreement, this grant of an Option is subject to the terms,
definitions and provisions of the Local.com Corporation 2007 Equity Incentive Plan (the “Plan”)
adopted by the Company, which is incorporated herein by reference.

     If designated in the Notice of Grant as an Incentive Stock Option, this Option is intended to
qualify as an Incentive Stock Option as defined in Section 422 of the Code; provided, however, that
to the extent that the aggregate Fair Market Value of stock with respect to which Incentive Stock
Options (within the meaning of Code Section 422, but without regard to Code Section 422(d)),
including the Option, are exercisable for the first time by the Optionee during any calendar year
(under the Plan and all other incentive stock option plans of the Company or any Subsidiary)
exceeds $100,000, such options shall be treated as not qualifying under Code Section 422, but
rather shall be treated as Non-Qualified Stock Options to the extent required by Code Section 422.
The rule set forth in the preceding sentence shall be applied by taking options into account in the
order in which they were granted. For purposes of these rules, the Fair Market Value of stock
shall be determined as of the time the option with respect to such stock is granted.

     2. Exercise of Option.

          2.1 Right to Exercise. This Option is exercisable as
follows:

               a. This Option shall be exercisable cumulatively according to the vesting schedule set out in
the Notice of Grant. For purposes of this Stock Option Agreement, Shares subject to this Option
shall vest based on Optionee’s continued status as a Service Provider, unless provided for
otherwise.

               b. This Option may not be exercised for a fraction of a Share.

               c. In the event of Optionee’s death, disability or other termination of the Optionee’s status
as a Service Provider, the exercisability of the Option is governed by Section 3 below.

 

 

               d. In no event may this Option be exercised after the date of expiration of the term of this
Option as set forth in the Notice of Grant.

          2.2 Method of Exercise. 

               a. This Option shall be exercisable by written Notice (in the form attached as Exhibit
A). The Notice must state the number of Shares for which the Option is being exercised, and
such other representations and agreements with respect to such shares of Common Stock as may be
required by the Company pursuant to the provisions of the Plan. The Notice must be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary of the Company.
The Notice must be accompanied by payment of the Exercise Price, including payment of any
applicable withholding tax. This Option shall be deemed to be exercised upon receipt by the
Company of such written Notice accompanied by the Exercise Price and payment of any applicable
withholding tax.

               b. No Shares shall be issued pursuant to the exercise of an Option unless such issuance and
such exercise comply with all relevant provisions of law and the requirements of any stock exchange
upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to the Optionee on the date on which the Option is exercised
with respect to such Shares.

          2.3 Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

               a. cash;

               b. check;

               c. with the consent of the Administrator, a full recourse promissory note bearing interest (at
no less than such rate as shall then preclude the imputation of interest under the Code) and
payable upon such terms as may be prescribed by the Administrator;

               d. with the consent of the Administrator, surrender of other shares of Common Stock of the
Company which (A) in the case of shares acquired pursuant to the exercise of a Company option, have
been owned by the Optionee for more than six (6) months on the date of surrender, and (B) have a
Fair Market Value on the date of surrender equal to the Exercise Price of the Shares as to which
the Option is being exercised;

               e. with the consent of the Administrator, surrendered Shares issuable upon the exercise of the
Option having a Fair Market Value on the date of exercise equal to the aggregate Exercise Price of
the Option or exercised portion thereof;

               f. with the consent of the Administrator, property of any kind which constitutes good and
valuable consideration; or

               g. with the consent of the Administrator, delivery of a notice that the Optionee has placed a
market sell order with a broker with respect to Shares then issuable upon exercise of the Option
and that the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the aggregate Exercise Price; provided,
that payment of such proceeds is then made to the Company upon settlement of such sale.

 

 

     3. Termination of Relationship.

          3.1 Cessastion of Service. If Optionee ceases to be a Service Provider (other than
for cause or by reason of the Optionee’s death or the total and permanent disability of the
Optionee as defined in Code Section 22(e)(3)), Optionee may exercise this Option during the
Termination Period set out in the Notice of Grant, to the extent the Option was vested at the date
of such termination. However, the Option shall terminate: (i) immediately upon termination if the
Optionee is terminated for cause; (ii) upon the expiration of the Termination Period, and (iii)
immediately upon termination to the extent that Optionee was not vested in this Option at the date
on which Optionee ceases to be a Service Provider.

          3.2 Disability of Optionee. If Optionee ceases to be a Service Provider as a result
of his or her total and permanent disability as defined in Code Section 22(e)(3), Optionee may
exercise the Option to the extent the Option was vested at the date on which Optionee ceases to be
a Service Provider, but only within twelve (12) months from such date (and in no event later than
the expiration date of the term of this Option as set forth in the Notice of Grant). To the extent
that the Option is not vested at the date on which Optionee ceases to be a Service Provider, or if
Optionee does not exercise such Option within the time specified herein, the Option shall
terminate.

          3.3 Death of Optionee. If Optionee ceases to be a Service Provider as a result of the
death of Optionee, the vested portion of the Option may be exercised at any time within twelve (12)
months following the date of death (and in no event later than the expiration date of the term of
this Option as set forth in the Notice of Grant) by Optionee’s estate or by a person who acquires
the right to exercise the Option by bequest or inheritance. To the extent that Optionee is not
vested in the Option at the date of death, or if the Option is not exercised within the time
specified herein, the Option shall terminate.

     4. Non-Transferability of Option. This Option may not be transferred in any manner
except by will or by the laws of descent or distribution. It may be exercised during the lifetime
of Optionee only by Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

     5. Term of Option. This Option may be exercised only within the term set out in the
Notice of Grant.

     6. Restrictions on Shares. Optionee hereby agrees that Shares purchased upon the
exercise of the Option shall be subject to such terms and conditions as the Administrator shall
determine in its sole discretion, including, without limitation, restrictions on the
transferability of Shares, the right of the Company to repurchase Shares, and a right of first
refusal in favor of the Company with respect to permitted transfers of Shares. Such terms and
conditions may, in the Administrator’s sole discretion, be contained in the Exercise Notice with
respect to the Option or in such other agreement as the Administrator shall determine and which the
Optionee hereby agrees to enter into at the request of the Company.

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