Document:

exv10w3

 

Exhibit 10.3

LOOPNET, INC.

2006 EQUITY INCENTIVE PLAN

     1. Purposes of the Plan.

          The purpose of this Plan is to encourage ownership in LoopNet, Inc., a Delaware corporation
(the “Company”), by key personnel whose long-term employment or other service relationship with the
Company is considered essential to the Company’s continued progress and, thereby, encourage
recipients to act in the stockholders’ interest and share in the Company’s success.

     2. Definitions.

          As used herein, the following definitions shall apply:

     (a) “Administrator” means the Board, any Committees or such delegates as shall be
administering the Plan in accordance with Section 4 of the Plan.

     (b) “Affiliate” means any entity that is directly or indirectly controlled by the
Company or any entity in which the Company has a significant ownership interest as
determined by the Administrator.

     (c) “Applicable Laws” means the requirements relating to the administration of stock
option and stock award plans under U.S. federal and state laws, any stock exchange or
quotation system on which the Company has listed or submitted for quotation the Common Stock
to the extent provided under the terms of the Company’s agreement with such exchange or
quotation system and, with respect to Awards subject to the laws of any foreign jurisdiction
where Awards are, or will be, granted under the Plan, the laws of such jurisdiction.

     (d) “Award” means a Stock Award or Option granted in accordance with the terms of the
Plan.

     (e) “Awardee” means an Employee, Consultant or Director of the Company or any
Affiliate who has been granted an Award under the Plan.

     (f) “Award Agreement” means a Stock Award Agreement and/or Option Agreement, which
may be in written or electronic format, in such form and with such terms and conditions as
may be specified by the Administrator, evidencing the terms and conditions of an individual
Award. Each Award Agreement is subject to the terms and conditions of the Plan.

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

     (h) “Cause” means (i) any criminal act by the Awardee which is punishable by
imprisonment of twelve (12) months or more, (ii) any act of fraud or dishonesty

 

 

committed by the Awardee in the course of his or her employment or (iii) the Awardee’s
continued refusal to perform the material duties of his or her employment after written
notice has been provided to the Awardee.

     (i) “Change in Control” means any of the following, unless the Administrator provides
otherwise:

     i. any merger or consolidation in which the Company shall not be the
surviving entity (or survives only as a subsidiary of another entity whose
stockholders did not own all or substantially all of the Common Stock in
substantially the same proportions as immediately prior to such transaction),

     ii. the sale of all or substantially all of the Company’s assets to any
other person or entity (other than a wholly-owned subsidiary),

     iii. the acquisition of beneficial ownership of a controlling interest
(including, without limitation, power to vote) the outstanding shares of Common
Stock by any person or entity (including a “group” as defined by or under Section
13(d)(3) of the Exchange Act),

     iv. the dissolution or liquidation of the Company,

     v. a contested election of Directors, as a result of which or in connection
with which the persons who were Directors before such election or their nominees
(the “Incumbent Directors”) cease to constitute a majority of the Board; provided
however that if the election, or nomination for election by the Company’s
stockholders, of any new director was approved by a vote of at least fifty percent
(50%) of the Incumbent Directors, such new Director shall be considered as an
Incumbent Director, or

     vi. any other event specified by the Board or a Committee, regardless of
whether at the time an Award is granted or thereafter.

     (j) “Code” means the United States Internal Revenue Code of 1986, as amended.

     (k) “Committee” means the compensation committee of the Board or a committee of
Directors appointed by the Board in accordance with Section 4 of the Plan.

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

     (m) “Company” means LoopNet, Inc., a Delaware corporation, or its successor.

     (n) “Consultant” means any person engaged by the Company or any Affiliate to render
services to such entity as an advisor or consultant.

     (o) “Conversion Award” has the meaning set forth in Section 4(b)(xi) of the Plan.

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

     (q) “
Effective Date” means the effective date of the underwriting agreement entered into in connection with the initial public
offering of the Company's Common Stock by the Company and the underwriters managing the initial public offering of the Company's
Common Stock pursuant to the underwriting agreement's terms.

     (r) “Employee” means a regular, active employee of the Company or any Affiliate,
including an Officer and/or Inside Director. The Administrator shall determine whether or
not the chairman of the Board qualifies as an “Employee.” Within the limitations of
Applicable Law, the Administrator shall have the discretion to determine the effect upon an
Award and upon an individual’s status as an Employee in the case of (i) any individual who
is classified by the Company or its Affiliate as leased from or otherwise employed by a
third party or as intermittent or temporary, even if any such classification is changed
retroactively as a result of an audit, litigation or otherwise, (ii) any leave of absence
approved by the Company or an Affiliate, (iii) any transfer between locations of employment
with the Company or an Affiliate or between the Company and any Affiliate or between any
Affiliates, (iv) any change in the Awardee’s status from an employee to a Consultant or
Director, and (v) at the request of the Company or an Affiliate an employee becomes employed
by any partnership, joint venture or corporation not meeting the requirements of an
Affiliate in which the Company or an Affiliate is a party.

     (s) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (t) “Fair Market Value” means, unless the Administrator determines otherwise, as of
any date, the closing sales price for such Common Stock as of such date (or if no sales were
reported on such date, the closing sales price on the last preceding day on which a sale was
made), as reported in such source as the Administrator shall determine.

     (u) “Grant Date” means the date upon which an Award is granted to an Awardee pursuant
to this Plan.

     (v) “Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations promulgated
thereunder.

     (w) “Insider Director” means a Director who is an Employee.

     (x) “Nasdaq” means the Nasdaq National Market or its successor.

     (y) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

     (z) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

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     (aa) “Option” means a right granted under Section 8 to purchase a number of Shares at
such exercise price, at such times, and on such other terms and conditions as are specified
in the agreement or other documents evidencing the Option (the “Option Agreement”). Both
Options intended to qualify as Incentive Stock Options and Nonstatutory Stock Options may be
granted under the Plan.

     (bb) “Outside Director” means a Director who is not an Employee.

     (cc) “Participant” means the Awardee or any person (including any estate) to whom an
Award has been assigned or transferred as permitted hereunder.

     (dd) “Plan” means this LoopNet, Inc. 2006 Equity Incentive Plan.

     (ee) “Qualifying Performance Criteria” shall have the meaning set forth in Section
12(b) of the Plan.

     (ff) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 13 of the Plan.

     (gg) “Stock Appreciation Right” means a right to receive cash and/or shares of Common
Stock based on a change in the Fair Market Value of a specific number of shares of Common
Stock between the grant date and the exercise date granted under Section 11.

     (hh) “Stock Award” means an award or issuance of Shares, Stock Units, Stock
Appreciation Rights or other similar awards made under Section 11 of the Plan, the grant,
issuance, retention, vesting and/or transferability of which is subject during specified
periods of time to such conditions (including continued employment or performance
conditions) and terms as are expressed in the agreement or other documents evidencing the
Award (the “Stock Award Agreement”).

     (ii) “Stock Unit” means a bookkeeping entry representing an amount equivalent to the
Fair Market Value of one Share (or a fraction or multiple of such value), payable in cash,
property or Shares. Stock Units represent an unfunded and unsecured obligation of the
Company, except as otherwise provided for by the Administrator.

     (jj) “Subsidiary” means any company (other than the Company) in an unbroken chain of
companies beginning with the Company, provided each company in the unbroken chain (other
than the Company) owns, at the time of determination, stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other companies in such
chain.

     (kk) “Termination of Employment” shall mean ceasing to be an Employee or Director, as
determined in the sole discretion of the Administrator. However, for Incentive Stock Option
purposes, Termination of Employment will occur when the Awardee ceases to be an employee (as
determined in accordance with Section 3401(c) of

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the Code and the regulations promulgated thereunder) of the Company or one of its
Subsidiaries. The Administrator shall determine whether any corporate transaction, such as a
sale or spin-off of a division or business unit, or a joint venture, shall be deemed to
result in a Termination of Employment.

     (ll) “Total and Permanent Disability” shall have the meaning set forth in Section
22(e)(3) of the Code.

     3. Stock Subject to the Plan.

     (a) Aggregate Limits. Subject to the provisions of Section 13 of the Plan, the
maximum aggregate number of Shares that may be sold or issued under
the Plan is 3,500,000 shares of Common Stock. This maximum number of Shares shall
be cumulatively increased on the first day of each of the Company’s fiscal years beginning in fiscal year
2007 and for five (5) more years thereafter the least of (i) 900,000 Shares, (ii) 4%% of the
Company’s outstanding Shares as of the last day of the preceding fiscal year or (iii) a
number of Shares determined by the Board. Shares subject to Awards granted under the Plan that
are cancelled, expire or are forfeited shall be available for re-grant under the Plan. If
an Awardee pays the exercise or purchase price of an Award granted under the Plan through the tender of Shares, or if Shares are tendered
or withheld to satisfy any Company withholding obligations, the number of Shares so tendered
or withheld shall not become available for re-issuance thereafter under the Plan. The
Shares subject to the Plan may be either Shares reacquired by the Company, including Shares
purchased in the open market, or authorized but unissued Shares.

          (b) Code Section 162(m) Limits. Subject to the provisions of Section 13 of the
Plan, the aggregate number of Shares subject to Awards granted under this Plan during any
calendar year to any one Awardee shall not exceed 1,000,000, except that in connection with
his or her first commencing service with the Company or an Affiliate, an Awardee may be
granted Awards covering up to an additional 1,000,000 Shares during the year in which such
service commences. Notwithstanding anything to the contrary in the Plan, the limitations
set forth in this Section 3(b) shall be subject to adjustment under

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Section 13(a) of the Plan only to the extent that such adjustment will not affect the status
of any Award intended to qualify as “performance based compensation” under Code Section
162(m).

     4. Administration of the Plan.

     (a) Procedure.

     i. Multiple Administrative Bodies. The Plan shall be administered by the
Board, a Committee and/or their delegates.

     ii. Section 162. To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation”
within the meaning of Section 162(m) of the Code, Awards to “covered employees”
within the meaning of Section 162(m) of the Code or Employees that the Committee
determines may be “covered employees” in the future shall be made by a Committee of
two or more “outside directors” within the meaning of Section 162(m) of the Code.

     iii. Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3 promulgated under the Exchange Act (“Rule
16b-3”), Awards to Officers and Directors shall be made by the entire Board or a
Committee of two or more “non-employee directors” within the meaning of Rule 16b-3.

     iv. Other Administration. The Board or a Committee may delegate to an
authorized officer or officers of the Company the power to approve Awards to persons
eligible to receive Awards under the Plan who are not (A) subject to Section 16 of
the Exchange Act or (B) at the time of such approval, “covered employees” under
Section 162(m) of the Code.

     v. Delegation of Authority for the Day-to-Day Administration of the Plan.
Except to the extent prohibited by Applicable Law, the Administrator may delegate to
one or more individuals the day-to-day administration of the Plan and any of the
functions assigned to it in this Plan. Such delegation may be revoked at any time.

     vi. Nasdaq. In addition, the Plan will be administered in a manner that
complies with any applicable Nasdaq or stock exchange listing requirements.

     (b) Powers of the Administrator. Subject to the provisions of the Plan and, in
the case of a Committee or delegates acting as the Administrator, subject to the specific
duties delegated to such Committee or delegates, the Administrator shall have the authority,
in its discretion:

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     i. to select the Employees, Consultants and Directors of the Company or
its Affiliates to whom Awards are to be granted hereunder;

     ii. to determine the number of shares of Common Stock or amount of cash to
be covered by each Award granted hereunder;

     iii. to determine the type of Award to be granted to the selected Employees,
Consultants and Directors;

     iii. to approve forms of Award Agreements for use under the Plan;

     iv. to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any Award granted hereunder. Such terms and conditions include, but
are not limited to, the exercise and/or purchase price (if applicable), the time or
times when an Award may be exercised (which may or may not be based on performance
criteria), the vesting schedule, any vesting and/or exercisability acceleration or
waiver of forfeiture restrictions, the acceptable forms of consideration, the term,
and any restriction or limitation regarding any Award or the Shares relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine and may be established at the time an Award is granted
or thereafter;

     v. to correct administrative errors;

     vi. to construe and interpret the terms of the Plan (including sub-plans and
Plan addenda) and Awards granted pursuant to the Plan;

     vii. to adopt rules and procedures relating to the operation and
administration of the Plan to accommodate the specific requirements of local laws
and procedures. Without limiting the generality of the foregoing, the Administrator
is specifically authorized (A) to adopt the rules and procedures regarding the
conversion of local currency, withholding procedures and handling of stock
certificates which vary with local requirements and (B) to adopt sub-plans and Plan
addenda as the Administrator deems desirable, to accommodate foreign laws,
regulations and practice;

     viii. to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans and Plan addenda;

     ix. to modify or amend each Award, including, but not limited to, the
acceleration of vesting and/or exercisability, provided, however, that any such
amendment is subject to Section 14 of the Plan and except as set forth in that
Section, may not impair any outstanding Award unless agreed to in writing by the
Participant;

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x. to allow Participants to satisfy withholding tax amounts by electing to
have the Company withhold from the Shares to be issued upon exercise of a
Nonstatutory Stock Option or vesting of a Stock Award that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined in such manner and on such date
that the Administrator shall determine or, in the absence of provision otherwise, on
the date that the amount of tax to be withheld is to be determined. All elections by
a Participant to have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may provide;

     xi. to authorize conversion or substitution under the Plan of any or all
stock options, stock appreciation rights or other stock awards held by service
providers of an entity acquired by the Company (the “Conversion Awards”). Any
conversion or substitution shall be effective as of the close of the merger,
acquisition or other transaction. The Conversion Awards may be Nonstatutory Stock
Options or Incentive Stock Options, as determined by the Administrator, with respect
to options granted by the acquired entity; provided, however, that with respect to
the conversion of stock appreciation rights in the acquired entity, the Conversion
Awards shall be Nonstatutory Stock Options. Unless otherwise determined by the
Administrator at the time of conversion or substitution, all Conversion Awards shall
have the same terms and conditions as Awards generally granted by the Company under
the Plan;

     xii. to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted by the
Administrator;

     xiii. to impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by a Participant or other
subsequent transfers by the Participant of any Shares issued as a result of or under
an Award, including without limitation, (A) restrictions under an insider trading
policy and (B) restrictions as to the use of a specified brokerage firm for such
resales or other transfers;

     xiv. to provide, either at the time an Award is granted or by subsequent
action, that an Award shall contain as a term thereof, a right, either in tandem
with the other rights under the Award or as an alternative thereto, of the
Participant to receive, without payment to the Company, a number of Shares, cash or
a combination thereof, the amount of which is determined by reference to the value
of the Award; and

     xv. to make all other determinations deemed necessary or advisable for
administering the Plan and any Award granted hereunder.

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     (c) Effect of Administrator’s Decision. All decisions, determinations and
interpretations by the Administrator regarding the Plan, any rules and regulations under the
Plan and the terms and conditions of any Award granted hereunder, shall be final and binding
on all Participants and on all other persons. The Administrator shall consider such factors
as it deems relevant, in its sole and absolute discretion, to making such decisions,
determinations and interpretations including, without limitation, the recommendations or
advice of any officer or other employee of the Company and such attorneys, consultants and
accountants as it may select.

     5. Eligibility.

          Awards may be granted to Employees, Consultants and Directors of the Company or any of its
Affiliates; provided that Incentive Stock Options may be granted only to Employees of the Company
or of a Subsidiary of the Company.

     6. Term of Plan.

          The Plan shall become effective on the Effective Date. It shall continue in effect for a term
of ten (10) years from the later of the Effective Date or the date any amendment to add shares to
the Plan is approved by stockholders of the Company unless terminated earlier under Section 14 of
the Plan.

     7. Term of Award.

          The term of each Award shall be determined by the Administrator and stated in the Award
Agreement. In the case of an Option, the term shall be ten (10) years from the Grant Date or such
shorter term as may be provided in the Award Agreement; provided that an Incentive Stock Option
granted to an Employee who on the Grant Date owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Subsidiary shall have a term of no
more than five (5) years from the Grant Date; and provided further that the term may be ten and
one-half (101/2) years (or a shorter period) in the case of Options granted to Employees
in certain jurisdictions outside the United States as determined by the Administrator.

     8. Options.

          The Administrator may grant an Option or provide for the grant of an Option, either from time
to time in the discretion of the Administrator or automatically upon the occurrence of specified
events, including, without limitation, the achievement of performance goals, the satisfaction of an
event or condition within the control of the Awardee or within the control of others.

     (a) Option Agreement. Each Option Agreement shall contain provisions regarding
(i) the number of Shares that may be issued upon exercise of the Option, (ii) the type of
Option, (iii) the exercise price of the Shares and the means of payment for the Shares, (iv)
the term of the Option, (v) such terms and conditions on the vesting

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and/or exercisability of an Option as may be determined from time to time by the
Administrator, (vi) restrictions on the transfer of the Option or the Shares issued upon
exercise of the Option and forfeiture provisions and (vii) such further terms and
conditions, in each case not inconsistent with this Plan as may be determined from time to
time by the Administrator.

     (b) Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be determined by the Administrator, subject to the
following:

     i. In the case of an Incentive Stock Option, the per Share exercise price
shall be no less than one hundred percent (100%) of the Fair Market Value per Share
on the Grant Date; provided however, that in the case of an Incentive Stock Option
granted to an Employee who on the Grant Date owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Subsidiary, the per Share exercise price shall be no less than one hundred ten
percent (110%) of the Fair Market Value per Share on the Grant Date.

     ii. In the case of a Nonstatutory Stock Option, the per Share exercise
price shall be no less than one hundred percent (100%) of the Fair Market Value per
Share on the Grant Date.

     iii. Notwithstanding the foregoing, at the Administrator’s discretion,
Conversion Awards may be granted in substitution and/or conversion of options of an
acquired entity, with a per Share exercise price of less than 100% of the Fair
Market Value per Share on the date of such substitution and/or conversion.

     (c) No Option Repricings. Other than in connection with a change in the Company’s
capitalization (as described in Section 13(a) of the Plan), the exercise price of an Option
may not be reduced without stockholder approval.

     (d) Vesting Period and Exercise Dates. Options granted under this Plan shall vest
and/or be exercisable at such time and in such installments during the period prior to the
expiration of the Option’s term as determined by the Administrator. The Administrator shall
have the right to make the timing of the ability to exercise any Option granted under this
Plan subject to continued employment, the passage of time and/or such performance
requirements as deemed appropriate by the Administrator. At any time after the grant of an
Option, the Administrator may reduce or eliminate any restrictions surrounding any
Participant’s right to exercise all or part of the Option.

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     (e) Form of Consideration. The Administrator shall determine the acceptable form
of consideration for exercising an Option, including the method of payment, either through
the terms of the Option Agreement or at the time of exercise of an Option. Acceptable forms
of consideration may include:

     i. cash;

     ii. check or wire transfer (denominated in U.S. Dollars);

     iii. subject to the Company’s discretion to refuse for any reason and at any
time to accept such consideration and subject to any conditions or limitations
established by the Administrator, other Shares held by the Participant which have a
Fair Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised;

     iv. consideration received by the Company under a broker-assisted sale and
remittance program acceptable to the Administrator;

     v. such other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Laws; or

     vi. any combination of the foregoing methods of payment.

     (f) Effect of Termination on Options

     i. Generally. Unless otherwise provided for by the Administrator, upon an
Awardee’s Termination of Employment other than as a result of circumstances
described in Sections 8(f)(ii) and (iii) below, any outstanding Option granted to
such Awardee, whether vested or unvested, to the extent not theretofore exercised,
shall terminate immediately upon the Awardee’s Termination of Employment; provided,
however, that the Administrator may in the Option Agreement specify a period of time
(but not beyond the expiration date of the Option) following Termination of
Employment during which the Awardee may exercise the Option as to Shares that were
vested and exercisable as of the date of Termination of Employment. To the extent
such a period following Termination of Employment is specified, the Option shall
automatically terminate at the end of such period to the extent the Awardee has not
exercised it within such period.

     ii. Disability of Awardee. Unless otherwise provided for by the
Administrator, upon an Awardee’s Termination of Employment as a result of the
Awardee’s disability, all outstanding Options granted to such Awardee that were
vested and exercisable as of the date of the Awardee’s Termination of Employment may
be exercised by the Awardee until (A) one (1) year following Awardee’s Termination
of Employment as a result of Awardee’s disability, including Total and Permanent
Disability or (B) the expiration of the term of such

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Option. If the Participant does not exercise such Option within the time specified,
the Option (to the extent not exercised) shall automatically terminate.

     iii. Death of Awardee. Unless otherwise provided for by the
Administrator, upon an Awardee’s Termination of Employment as a result of the
Awardee’s death, all outstanding Options granted to such Awardee that were vested
and exercisable as of the date of the Awardee’s death may be exercised until the
earlier of (A) one (1) year following the Awardee’s death or (B) the expiration of
the term of such Option. If an Option is held by the Awardee when he or she dies,
such Option may be exercised, to the extent the Option is vested and exercisable, by
the beneficiary designated by the Awardee (as provided in Section 15 of the Plan),
the executor or administrator of the Awardee’s estate or, if none, by the person(s)
entitled to exercise the Option under the Awardee’s will or the laws of descent or
distribution. If the Option is not so exercised within the time specified, such
Option (to the extent not exercised) shall automatically terminate.

     iv. Other Terminations of Employment. The Administrator may provide in the
applicable Option Agreement for different treatment of Options upon Termination of
Employment of the Awardee than that specified above.

          (g) Leave of Absence. The Administrator shall have the discretion to determine
whether and to what extent the vesting of Options shall be tolled during any unpaid leave of
absence; provided, however, that in the absence of such determination, vesting of Options
shall be tolled during any leave that is not a leave required to be provided to the Awardee
under Applicable Law. In the event of military leave, vesting shall toll during any unpaid
portion of such leave, provided that, upon an Awardee’s returning from military leave (under
conditions that would entitle him or her to protection upon such return under the Uniform
Services Employment and Reemployment Rights Act), he or she shall be given vesting credit
with respect to Options to the same extent as would have applied had the Awardee continued
to provide services to the Company throughout the leave on the same terms as he or she was
providing services immediately prior to such leave.

     9. Incentive Stock Option Limitations/Terms.

          (a) Eligibility. Only employees (as determined in accordance with Section 3401(c)
of the Code and the regulations promulgated thereunder) of the Company or any of its
Subsidiaries may be granted Incentive Stock Options.

          (b) $100,000 Limitation. Notwithstanding the designation “Incentive Stock Option”
in an Option Agreement, if and to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the first time by
the Awardee during any calendar year (under all plans of the Company and any of its
Subsidiaries) exceeds U.S. $100,000, such Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 9(b), Incentive Stock Options

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shall be taken into account in the order in which they were granted. The Fair Market Value
of the Shares shall be determined as of the Grant Date.

          (c) Transferability. An Incentive Stock Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner by the Awardee otherwise
than by will or the laws of descent and distribution, and, during the lifetime of such
Awardee, may only be exercised by the Awardee. If the terms of an Incentive Stock Option are
amended to permit transferability, the Option will be treated for tax purposes as a
Nonstatutory Stock Option. The designation of a beneficiary by an Awardee will not
constitute a transfer.

          (d) Exercise Price. The per Share exercise price of an Incentive Stock Option
shall be determined by the Administrator in accordance with Section 8(b)(i) of the Plan.

          (e) Other Terms. Option Agreements evidencing Incentive Stock Options shall
contain such other terms and conditions as may be necessary to qualify, to the extent
determined desirable by the Administrator, with the applicable provisions of Section 422 of
the Code.

     10. Exercise of Option.

          (a) Procedure for Exercise.

     i. Any Option granted hereunder shall be exercisable according to the
terms of the Plan and at such times and under such conditions as determined by the
Administrator and set forth in the respective Option Agreement.

     ii. An Option shall be deemed exercised when the Company receives (A)
written or electronic notice of exercise (in accordance with the Option Agreement)
from the person entitled to exercise the Option; (B) full payment for the Shares
with respect to which the related Option is exercised; and (C) payment of all
applicable withholding taxes.

     iii. An Option may not be exercised for a fraction of a Share.

          (b) Rights as a Stockholder. The Company shall issue (or cause to be issued) such
Shares as administratively practicable after the Option is exercised. Shares issued upon
exercise of an Option shall be issued in the name of the Participant or, if requested by the
Participant, in the name of the Participant and his or her spouse. Unless provided otherwise
by the Administrator or pursuant to this Plan, until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized transfer agent of
the Company), no right to vote or receive dividends or any other rights as a stockholder
shall exist with respect to the Shares subject to an Option, notwithstanding the exercise of
the Option.

     11. Stock Awards.

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          (a) Stock Award Agreement. Each Stock Award Agreement shall contain provisions
regarding (i) the number of Shares subject to such Stock Award or a formula for determining
such number, (ii) the purchase price of the Shares, if any, and the means of payment for the
Shares, (iii) the performance criteria (including Qualifying Performance Criteria), if any,
and level of achievement versus these criteria that shall determine the number of Shares
granted, issued, retainable and/or vested, (iv) such terms and conditions on the grant,
issuance, vesting and/or forfeiture of the Shares as may be determined from time to time by
the Administrator, (v) restrictions on the transferability of the Stock Award and (vi) such
further terms and conditions in each case not inconsistent with this Plan as may be
determined from time to time by the Administrator.

          (b) Restrictions and Performance Criteria. The grant, issuance, retention and/or
vesting of each Stock Award or the Shares subject thereto may be subject to such performance
criteria (including Qualifying Performance Criteria) and level of achievement versus these
criteria as the Administrator shall determine, which criteria may be based on financial
performance, personal performance evaluations and/or completion of service by the Awardee.
Notwithstanding anything to the contrary herein, the performance criteria for any Stock
Award that is intended to satisfy the requirements for “performance-based compensation”
under Section 162(m) of the Code shall be established by the Administrator based on one or
more Qualifying Performance Criteria selected by the Administrator and specified in writing
not later than ninety (90) days after the commencement of the period of service to which the
performance goals relates, provided that the outcome is substantially uncertain at that time
(or in such other manner that complies with Section 162(m)).

          (c) Forfeiture. Unless otherwise provided for by the Administrator, upon the
Awardee’s Termination of Employment, the Stock Award and the Shares subject thereto shall be
forfeited, provided that to the extent that the Participant purchased any Shares, the
Company shall have a right to repurchase the unvested Shares at such price and on such terms
and conditions as the Administrator determines.

          (d) Rights as a Stockholder. Unless otherwise provided by the Administrator, the
Participant shall have the rights equivalent to those of a stockholder and shall be a
stockholder only after Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) to the Participant.
Unless otherwise provided by the Administrator, a Participant holding Stock Units shall be
entitled to receive dividend payments as if he or she was an actual stockholder.

          (e) Stock Appreciation Rights.

          i. General. Stock Appreciation Rights may be granted either alone, in
addition to, or in tandem with other Awards granted under the Plan. The Board may
grant Stock Appreciation Rights to eligible Participants subject to terms and
conditions not inconsistent with this Plan and determined by the Board. The specific
terms and conditions applicable to the Participant shall be provided for in

14

 

the Stock Award Agreement. Stock Appreciation Rights shall be exercisable, in whole
or in part, at such times as the Board shall specify in the Stock Award Agreement.

          ii. Exercise of Stock Appreciation Right. Upon the exercise of a Stock
Appreciation Right, in whole or in part, the Participant shall be entitled to a
payment in an amount equal to the excess of the Fair Market Value on the date of
exercise of a fixed number of Shares covered by the exercised portion of the Stock
Appreciation Right, over the Fair Market Value on the grant date of the Shares
covered by the exercised portion of the Stock Appreciation Right (or such other
amount calculated with respect to Shares subject to the Award as the Board may
determine). The amount due to the Participant upon the exercise of a Stock
Appreciation Right shall be paid in such form of consideration as determined by the
Board and may be in cash, Shares or a combination thereof, over the period or
periods specified in the Stock Award Agreement. A Stock Award Agreement may place
limits on the amount that may be paid over any specified period or periods upon the
exercise of a Stock Appreciation Right, on an aggregate basis or as to any
Participant. A Stock Appreciation Right shall be considered exercised when the
Company receives written notice of exercise in accordance with the terms of the
Stock Award Agreement from the person entitled to exercise the Stock Appreciation
Right.

          iii. Nonassignability of Stock Appreciation Rights. Except as determined by
the Board, no Stock Appreciation Right shall be assignable or otherwise transferable
by the Participant except by will or by the laws of descent and distribution.

     12. Other Provisions Applicable to Awards.

          (a) Non-Transferability of Awards. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by beneficiary designation, will or by the laws of
descent or distribution. Subject to Section 9(c), the Administrator may in its discretion
make an Award transferable to an Awardee’s family member or any other person or entity as it
deems appropriate. If the Administrator makes an Award transferable, either at the time of
grant or thereafter, such Award shall contain such additional terms and conditions as the
Administrator deems appropriate, and any transferee shall be deemed to be bound by such
terms upon acceptance of such transfer.

          (b) Qualifying Performance Criteria. For purposes of this Plan, the term
“Qualifying Performance Criteria” shall mean any one or more of the following performance
criteria, either individually, alternatively or in any combination, applied to either the
Company as a whole or to a business unit, Affiliate or business segment, either
individually, alternatively or in any combination, and measured either annually or
cumulatively over a period of years, on an absolute basis or relative to a pre-established
target, to previous years’ results or to a designated comparison group, in each case as
specified by the Administrator in the Award: (i) cash flow; (ii) earnings (including gross

15

 

margin; earnings before interest and taxes; earnings before interest, taxes, depreciation
and amortization; earnings before taxes; and net earnings); (iii) earnings per share; (iv)
growth in earnings or earnings per share; (v) stock price; (vi) return on equity or average
stockholders’ equity; (vii) total stockholder return; (viii) return on capital; (ix) return
on assets or net assets; (x) return on investment; (xi) revenue or growth in revenue; (xii)
income or net income; (xiii) operating income or net operating income, in aggregate or per
share; (xiv) operating profit or net operating profit; (xv) operating margin; (xvi) return
on operating revenue; (xvii) market share; (xviii) contract awards or backlog; (xix)
overhead or other expense reduction; (xx) growth in stockholder value relative to the moving
average of the S&P 500 Index or a peer group index; (xxi) credit rating; (xxii) strategic
plan development and implementation (including individual performance objectives that relate
to achievement of the Company’s or any business unit’s strategic plan); (xxiii) improvement
in workforce diversity; (xxiv) growth of revenue, operating income or net income; (xxv)
efficiency ratio; (xxvi) ratio of nonperforming assets to total assets; and (xxvii) any
other similar criteria. The Committee may appropriately adjust any evaluation of performance
under a Qualifying Performance Criteria to exclude any of the following events that occurs
during a performance period: (A) asset write-downs; (B) litigation or claim judgments or
settlements; (C) the effect of changes in tax law, accounting principles or other such laws
or provisions affecting reported results; (D) accruals for reorganization and restructuring
programs; and (E) any gains or losses classified as extraordinary or as discontinued
operations in the Company’s financial statements.

          (c) Certification. 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 Qualifying Performance Criteria and any
other material terms under such Award have been satisfied (other than in cases where such
relate solely to the increase in the value of the Common Stock).

          (d) Discretionary Adjustments Pursuant to Section 162(m). Notwithstanding
satisfaction of any completion of any Qualifying Performance Criteria, 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 or other benefits granted, issued,
retainable and/or vested under an Award on account of satisfaction of such Qualifying
Performance Criteria may be reduced by the Committee on the basis of such further
considerations as the Committee in its sole discretion shall determine.

     13. Adjustments upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

          (a) Changes in Capitalization. Subject to any required action by the stockholders
of the Company, (i) the number and kind of Shares covered by each outstanding Award, (ii)
the price per Share subject to each such outstanding Award and (iii) each of the Share
limitations set forth in Section 3 of the Plan, shall be proportionately adjusted for any
increase or decrease in the number or kind of issued shares resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the Common Stock,

16

 

or any other increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected without
receipt of consideration.” Such adjustment shall be made by the Administrator, whose
determination in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common Stock subject
to an Award.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as soon as
practicable prior to the effective date of such proposed transaction. To the extent it has
not been previously exercised or the Shares subject thereto issued to the Awardee and unless
otherwise determined by the Administrator, an Award will terminate immediately prior to the
consummation of such proposed transaction.

          (c) Change in Control. In the event there is a Change in Control of the Company,
as determined by the Board or a Committee, each outstanding Award shall be assumed or an
equivalent award or right shall be substituted by the successor corporation or a parent or
subsidiary of the successor corporation. In the event of a Change of Control and such
successor corporation does not assume or substitute Awards in connection with the Change of
Control, the vesting and exercisability of each outstanding Award shall accelerate such that
the Awards shall become vested and exercisable as to one hundred percent (100%) of the
otherwise then unvested shares, and any repurchase right of the Company applicable to any Shares shall
lapse as to one hundred percent (100%) of the Shares otherwise subject to such repurchase right
immediately prior to consummation of the Change of Control, in each case effective as of
immediately prior to consummation of the Change of Control. To the extent that an Award is
not exercised prior to consummation of a Change of Control in which the Award is not being
assumed or substituted, such Award shall terminate upon such consummation.

          Notwithstanding the above, in the event (i) of a Change in Control, and (ii) a
Participant holding an Award assumed or substituted by the successor corporation in the
Change in Control, or holding restricted Shares issued upon exercise of an Award with
respect to which the successor corporation has succeeded to a repurchase right as a result
of the Change in Control, is either not offered full-time employment with the successor
corporation upon general terms and conditions (such as duties, responsibilities, location of
employment and compensation, including without limitation the continued vesting of the Award
in accordance with its terms) not materially less favorable to the Participant than the
terms and conditions of the Participant’s employment with the Company prior to the Change of
Control or such employment is offered and accepted by the Participant (upon such general
terms and conditions) but such employment is terminated by the successor corporation within
twelve (12) months after the Change of Control without Cause, then any assumed or
substituted Award held by the terminated Participant at the time of termination shall
accelerate and become exercisable as to fifty percent

17

 

(50%)
of the otherwise unvested Shares as of the date of termination, and any repurchase right applicable to
any Shares shall lapse as to fifty percent (50%) of the Shares as to which the
repurchase right has not otherwise lapsed as of the date of termination. The acceleration of vesting
and lapse of repurchase rights provided for in the previous sentence shall occur immediately
prior to the effective date of termination of the Participant’s employment or service
relationship.

          For purposes of this Section 13(c), an Award shall be considered assumed, without
limitation, if, at the time of issuance of the stock or other consideration upon a Change in
Control, as the case may be, each holder of an Award would be entitled to receive upon
exercise of the Award the same number and kind of shares of stock or the same amount of
property, cash or securities as such holder would have been entitled to receive upon the
occurrence of the transaction if the holder had been, immediately prior to such transaction,
the holder of the number of Shares covered by the Award at such time (after giving effect to
any adjustments in the number of Shares covered by the Award as provided for in Section
13(a)); provided that if such consideration received in the transaction is not solely common
stock of the successor corporation, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon exercise of the Award to be
solely common stock of the successor corporation equal to the Fair Market Value of the per
Share consideration received by holders of Common Stock in the transaction.

     14. Amendment and Termination of the Plan.

          (a) Amendment and Termination. The Administrator may amend, alter or discontinue
the Plan or any Award Agreement, but any such amendment shall be subject to approval of the
stockholders of the Company in the manner and to the extent required by Applicable Law. To
the extent required to comply with Section 162(m), the Company shall seek re-approval of the
Plan from time to time by the stockholders. In addition, without limiting the foregoing,
unless approved by the stockholders of the Company, no such amendment shall be made that
would:

          i. materially increase the maximum number of Shares for which Awards may
be granted under the Plan, other than an increase pursuant to Section 13 of the
Plan;

          ii. reduce the minimum exercise price at which Options may be granted under
the Plan;

          iii. result in a repricing of Options by (x) reducing the exercise price of
outstanding Options or (y) canceling an outstanding Option held by an Awardee and
re-granting to the Awardee a new Option with a lower exercise price, in either case
other than in connection with a change in the Company’s capitalization pursuant to
Section 13 of the Plan; or

          iv. change the class of persons eligible to receive Awards under the Plan.

18

 

          (b) Effect of Amendment or Termination. No amendment, suspension or termination
of the Plan shall impair the rights of any Award, unless mutually agreed otherwise between
the Participant and the Administrator, which agreement must be in writing and signed by the
Participant and the Company; provided further that the Administrator may amend an
outstanding Award in order to conform it to the Administrator’s intent (in its sole
discretion) that such Award not be subject to Code Section 409A(a)(1)(B). Termination of the
Plan shall not affect the Administrator’s ability to exercise the powers granted to it
hereunder with respect to Awards granted under the Plan prior to the date of such
termination.

          (c) Effect of the Plan on Other Arrangements. Neither the adoption of the Plan by
the Board or a Committee nor the submission of the Plan to the stockholders of the Company
for approval shall be construed as creating any limitations on the power of the Board or any
Committee to adopt such other incentive arrangements as it or they may deem desirable,
including without limitation, the granting of restricted stock or stock options otherwise
than under the Plan, and such arrangements may be either generally applicable or applicable
only in specific cases. The value of Awards granted pursuant to the Plan will not be
included as compensation, earnings, salaries or other similar terms used when calculating an
Awardee’s benefits under any employee benefit plan sponsored by the Company or any
Subsidiary except as such plan otherwise expressly provides.

     15. Designation of Beneficiary.

          (a) An Awardee may file a written designation of a beneficiary who is to receive the
Awardee’s rights pursuant to Awardee’s Award or the Awardee may include his or her Awards in
an omnibus beneficiary designation for all benefits under the Plan. To the extent that
Awardee has completed a designation of beneficiary while employed with the Company, such
beneficiary designation shall remain in effect with respect to any Award hereunder until
changed by the Awardee to the extent enforceable under Applicable Law.

          (b) Such designation of beneficiary may be changed by the Awardee at any time by
written notice. In the event of the death of an Awardee and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such Awardee’s death, the
Company shall allow the executor or administrator of the estate of the Awardee to exercise
the Award, or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may allow the spouse or one or more dependents
or relatives of the Awardee to exercise the Award to the extent permissible under Applicable
Law or if no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

     16. No Right to Awards or to Employment.

          No person shall have any claim or right to be granted an Award and the grant of any Award
shall not be construed as giving an Awardee the right to continue in the employ of the Company or
its Affiliates. Further, the Company and its Affiliates expressly reserve the right, at any time,
to dismiss any Employee, Consultant or Awardee at any time without liability or any

19

 

claim under the Plan, except as provided herein or in any Award Agreement entered into hereunder.

     17. Legal Compliance.

          Shares shall not be issued pursuant to the exercise of an Option or Stock Award unless the
exercise of such Option or Stock Award and the issuance and delivery of such Shares shall comply
with Applicable Laws and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

     18. Inability to Obtain Authority.

          To the extent the Company is unable to or the Administrator deems it infeasible to obtain
authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares hereunder, the Company shall
be relieved of any liability with respect to the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

     19. Reservation of Shares.

          The Company, during the term of this Plan, will at all times reserve and keep available such
number of Shares as shall be sufficient to satisfy the requirements of the Plan.

     20. Notice.

          Any written notice to the Company required by any provisions of this Plan shall be addressed
to the Secretary of the Company and shall be effective when received.

     21. Governing Law; Interpretation of Plan and Awards.

     (a) This Plan and all determinations made and actions taken pursuant hereto shall be
governed by the substantive laws, but not the choice of law rules, of the state of Delaware.

     (b) In the event that any provision of the Plan or any Award granted under the Plan
is declared to be illegal, invalid or otherwise unenforceable by a court of competent
jurisdiction, such provision shall be reformed, if possible, to the extent necessary to
render it legal, valid and enforceable, or otherwise deleted, and the remainder of the terms
of the Plan and/or Award shall not be affected except to the extent necessary to reform or
delete such illegal, invalid or unenforceable provision.

     (c) The headings preceding the text of the sections hereof are inserted solely for
convenience of reference, and shall not constitute a part of the Plan, nor shall they affect
its meaning, construction or effect.

20

 

     (d) The terms of the Plan and any Award shall inure to the benefit of and be binding
upon the parties hereto and their respective permitted heirs, beneficiaries, successors and
assigns.

     (e) All questions arising under the Plan or under any Award shall be decided by the
Administrator in its total and absolute discretion. In the event the Participant believes
that a decision by the Administrator with respect to such person was arbitrary or
capricious, the Participant may request arbitration with respect to such decision. The
review by the arbitrator shall be limited to determining whether the Administrator’s
decision was arbitrary or capricious. This arbitration shall be the sole and exclusive
review permitted of the Administrator’s decision, and the Awardee shall as a condition to
the receipt of an Award be deemed to explicitly waive any right to judicial review.

     (f) Notice of demand for arbitration shall be made in writing to the Administrator
within thirty (30) days after the applicable decision by the Administrator. The arbitrator
shall be selected from amongst those members of the Board who are neither Administrators nor
Employees. If there are no such members of the Board, the arbitrator shall be selected by
the Board. The arbitrator shall be an individual who is an attorney licensed to practice law
in the State of Delaware. Such arbitrator shall be neutral within the meaning of the
Commercial Rules of Dispute Resolution of the American Arbitration Association; provided,
however, that the arbitration shall not be administered by the American Arbitration
Association. Any challenge to the neutrality of the arbitrator shall be resolved by the
arbitrator whose decision shall be final and conclusive. The arbitration shall be
administered and conducted by the arbitrator pursuant to the Commercial Rules of Dispute
Resolution of the American Arbitration Association. The decision of the arbitrator on the
issue(s) presented for arbitration shall be final and conclusive and may be enforced in any
court of competent jurisdiction.

     22. Limitation on Liability.

          The Company and any Affiliate which is in existence or hereafter comes into existence shall
not be liable to a Participant, an Employee, an Awardee or any other persons as to:

     (a) The Non-Issuance of Shares. The non-issuance or sale of Shares as to which
the Company has been unable to obtain from any regulatory body having jurisdiction the
authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of
any shares hereunder; and

     (b) Tax Consequences. Any tax consequence realized by any Participant, Employee,
Awardee or other person due to the receipt, exercise or settlement of any Option or other
Award granted hereunder.

     23. Unfunded Plan.

     Insofar as it provides for Awards, the Plan shall be unfunded. Although bookkeeping accounts
may be established with respect to Awardees who are granted Stock Awards under this

21

 

Plan, any such accounts will be used merely as a bookkeeping convenience. The Company shall not be
required to segregate any assets which may at any time be represented by Awards, nor shall this
Plan be construed as providing for such segregation, nor shall the Company nor the Administrator be
deemed to be a trustee of stock or cash to be awarded under the Plan. Any liability of the Company
to any Participant with respect to an Award shall be based solely upon any contractual obligations
which may be created by the Plan; no such obligation of the Company shall be deemed to be secured
by any pledge or other encumbrance on any property of the Company. Neither the Company nor the
Administrator shall be required to give any security or bond for the performance of any obligation
which may be created by this Plan.

22exv10w4

 

Exhibit 10.4

LOOPNET, INC.

2006 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT (NONSTATUTORY)

     THIS STOCK OPTION AGREEMENT (the “Agreement”) dated <GRANT DATE> (“Grant Date”) between
LoopNet, Inc., a Delaware corporation (the “Company”), and <EMPLOYEE NAME> (“Optionee”), is
entered into as follows:

WITNESSETH:

     WHEREAS, the Company has established the 2006 Equity Incentive Plan (the “Plan”); and

     WHEREAS, the Compensation Committee of the Board of Directors of the Company or its delegates
(the “Committee”) has determined that Optionee shall be granted an option under the Plan as
hereinafter set forth;

     The parties hereby agree that the Company grants, effective as of the Grant Date, Optionee an
option (this “Option”) to purchase <SHARES> shares of its $0.001 par value Common Stock (the
“Shares”) upon the terms and conditions set forth in this Agreement.

1. Plan Award. This Option is granted under and pursuant to the Plan and is subject to
each and all of the provisions thereof.

2. Exercise Price. The exercise price applicable to this Option (meaning, the price
Optionee must pay in order to purchase any Shares hereunder) shall be <PRICE> per Share.

3. Vesting and Exercise of Option. Subject to Optionee’s not experiencing a Termination of
Employment during the following vesting period, Optionee shall vest in and earn the right to
exercise this Option on the following schedule: _________. [Include any
acceleration events applicable to Option, under Plan or under other policy or arrangement.]

4. Expiration. This Option will expire seven (7) years from the Grant Date, unless sooner
terminated or canceled in accordance with the provisions of the Plan. This means that (subject to
the continuing service requirement set forth in Section 3 above and subject to earlier termination
upon certain other events as set forth in the Plan) this Option must be exercised, if at all, on or
before <EXPIRE DATE> (the “Expiration Date”). If this Option expires on a stock exchange
holiday or weekend day, this Option will expire on the last trading day prior to the holiday or
weekend. Optionee shall be solely responsible for exercising this Option, if at all, prior to its
Expiration Date. The Company shall have no obligation to notify Optionee of this Option’s
expiration.

5. Exercise Mechanics. This Option may be exercised by delivering to the [Stock Plan
Administrator] at the Company’s head office a written or electronic notice stating the number of
Shares as to which the Option is exercised or by any other method the Committee has approved. The
notice must be accompanied by the payment of the full Option exercise price of such Shares.

1

 

Exercise shall not be deemed to have occurred unless and until Optionee has delivered to the
Company (or its authorized representative) an approved notice of exercise, full payment of the
exercise price for the Shares being exercised and payment of any applicable withholding taxes in
accordance with Section 8 below. Payment of the Option exercise price may be in cash (including
check or wire transfer), through an approved cashless-brokered exercise program, with shares of the
Company’s Common Stock (subject to the Company’s discretion to withhold approval for such payment
method at any time) or a combination thereof to the extent permissible under Applicable Law;
provided, however, that any permitted method of payment shall be in strict compliance with all
procedural rules established by the Committee.

6. Termination of Employment. All rights of Optionee in this Option, to the extent that it
has not previously become vested and been exercised, shall terminate upon Optionee’s Termination of
Employment except as set forth in this Section 6. The portion of the Option that relates to any
Shares that were unvested and unexercisable as of the date of Optionee’s Termination of Employment
shall terminate and expire effective immediately upon such date. With respect to the vested and
exercisable portion of the Option, and subject to the final sentence of this Section 6:

     (i) In the event of Termination of Employment other than as a result of Optionee’s death or
disability, Optionee shall have 60 days to exercise the Option as to the Shares subject to the
Option that were vested and exercisable as of the date of Termination of Employment; provided that
if during any part of such 60 day period, the Option is not exercisable because the issuance of the
Shares would violate the registration requirements under the Securities Act, the Option shall not
expire until the Option shall have been exercisable for an aggregate of 60 days after the date of
Termination of Employment; provided further that if during any part of such 60 day period, the
Shares issued upon exercise of the Option may not be sold because Optionee has material nonpublic
information regarding the Company or is otherwise subject to a trading blackout period under the
Company’s Insider Trading Compliance Program, the Option shall not expire until Optionee shall have
had an aggregate of 60 days after the date of Termination of Employment during which Optionee can
sell the Shares without being subject to such restrictions arising under insider trading laws or
Company policy; and provided further that notwithstanding the foregoing, in no event may this
Option be exercised more than one year after the date of Termination of Employment; and

     (ii) In the event of Termination of Employment as a result of Optionee’s death or disability
(including a Total and Permanent Disability), Optionee shall have one (1) year to exercise the
Option as to the Shares subject to the Option that were vested and exercisable as of the date of
Termination of Employment.

[Include any other special termination provisions, e.g., termination of vested shares upon
termination for Cause or competitive acts; post-termination exercise period applicable to Change of
Control, etc.]

Notwithstanding the above, in no event may an Option be exercised, even as to vested and otherwise
exercisable Shares, after the Expiration Date set forth in Section 4 above.

2

 

7. Transferability. This Option generally is not transferable by Optionee otherwise than
by will or the laws of descent and distribution, and is exercisable only by Optionee during
Optionee’s lifetime; provided however that this Option may be transferred by instrument to an inter
vivos or testamentary trust in which the Option is to be passed to beneficiaries upon the death of
the trustor (settlor) or by gift or pursuant to domestic relations orders to “Immediate Family
Members” (as defined below) of the Optionee. “Immediate Family” means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law
(including adoptive relationships), a trust in which these persons have more than fifty percent of
the beneficial interest, a foundation in which these persons (or the Optionee) control the
management of assets, and any other entity in which these persons (or the Optionee) own more than
fifty percent of the voting interests.

8. Tax Matters. Regardless of any action the Company or Optionee’s employer (the
“Employer”) takes with respect to any or all income tax, social security, payroll tax, payment on
account or other tax-related withholding (“Tax-Related Items”), Optionee acknowledges and agrees
that the ultimate liability for all Tax-Related Items legally due by him or her is and remains
Optionee’s responsibility and that the Company and/or the Employer (i) make no representations nor
undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this
Option, including the grant, vesting or exercise of this Option, the subsequent sale of Shares
acquired pursuant to such exercise and receipt of any dividends; and (ii) do not commit to
structure the terms or the grant or any aspect of this Option to reduce or eliminate Optionee’s
liability for Tax-Related Items. Prior to the exercise of this Option, Optionee shall pay or make
adequate arrangements satisfactory to the Company and/or the Employer to withhold all applicable
Tax-Related Items legally payable by Optionee from Optionee’s wages or other cash compensation paid
to Optionee by the Company and/or the Employer or from proceeds of the sale of Shares.
Alternatively, or in addition, if permissible under Applicable Laws, the Company may (but shall not be
obligated to): (1) sell or arrange for the sale of Shares that Optionee acquires to meet the
withholding obligation for Tax-Related Items, and/or (2) withhold in Shares, provided that the
Company only withholds the amount of Shares necessary to satisfy the minimum withholding amount.
In addition, Optionee shall pay the Company or the Employer any amount of Tax-Related Items that
the Company or the Employer may be required to withhold as a result of Optionee’s participation in
the Plan or Optionee’s purchase of Shares that cannot be satisfied by the means previously
described, and if Optionee does not otherwise so pay the Company or the Employer, then the Company
or the Employer may withhold amounts from Optionee’s cash compensation to satisfy such withholding
obligation. The Company may refuse to honor the exercise and refuse to deliver the Shares if
Optionee fails to comply with Optionee’s obligations in connection with the Tax-Related Items
(including if Optionee’s cash compensation is not sufficient to satisfy such obligations).
Although Optionee is being provided in the Plan prospectus a description of certain tax
consequences of transactions related to the Option, Optionee remains responsible for all such tax
consequences and the Company shall not be deemed to provide any individual tax advice with respect
thereto.

3

 

9.
Optionee Acknowledgements. By accepting the grant of this Option, Optionee acknowledges and
agrees that the Plan is established voluntarily by the Company, it is discretionary in nature and
may be modified, amended, suspended or terminated by the Company at any time unless
otherwise provided in the Plan or this Agreement Optionee
acknowledges that all decisions with respect to future grants, if any, will be at the sole discretion of
the Company

	•	 	Optionee’s participation in the Plan shall not create a right to further employment
with Employer and shall not interfere with the ability of Employer to terminate Optionee’s
employment relationship at any time with or without cause and it is expressly agreed and
understood that employment is terminable at the will of either party, insofar as permitted
by law

	•	 	Optionee agrees that

this Option is an extraordinary item that does not constitute compensation of any kind
for services of any kind rendered to the Company or the Employer, and is outside the scope
of Optionee’s employment contract, if any. This Option is not part of normal or expected
compensation or salary for any purposes, including, but not limited to calculating any
severance, resignation, termination, redundancy, end-of-service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments insofar as permitted
by law

	•	 	In the event that Optionee is not an employee of the Company, this Option grant will
not be interpreted to form an employment contract or relationship
with the Company, the Employer or any Subsidiary or Affiliate of the Company

	•	 	Optionee acknowledges that the future value of the underlying Shares is unknown, may increase or decrease in the
future, and cannot be predicted with certainty. In consideration of the grant of this Option, no claim or entitlement to compensation or
damages shall arise from termination of this Option or diminution in value of this Option or
Shares purchased through exercise of this Option resulting from Optionee’s Termination of
Employment by the Company or the Employer (for any reason whatsoever and whether or not in
breach of Applicable Laws).

4

 

10. Data Transfer. Optionee explicitly and unambiguously consents to the collection, use
and transfer, in electronic or other form, of Optionee’s personal data as described in this
document by and among, as applicable, the Employer, and the Company and its Subsidiaries and
Affiliates for the exclusive purpose of implementing, administering and managing Optionee’s
participation in the Plan. Optionee understands that the Company, its Affiliates, its Subsidiaries
and the Employer hold certain personal information about Optionee, including, but not limited to,
name, home address and telephone number, date of birth, social security number (or other
identification number), salary, nationality, job title, any shares of stock or directorships held
in the Company, details of all options or any other entitlement to shares of stock awarded,
canceled, purchased, exercised, vested, unvested or outstanding in Optionee’s favor for the purpose
of implementing, managing and administering the Plan (“Data”). Optionee understands that the Data
may be transferred to any third parties assisting in the implementation, administration and
management of the Plan, that these recipients may be located in Optionee’s country or elsewhere and
that the recipient country may have different data privacy laws and protections than Optionee’s
country. Optionee may request a list with the names and addresses of any potential recipients of
the Data by contacting the Stock Plan Administrator. Optionee authorizes the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes
of implementing, administering and managing Optionee’s participation in the Plan, including any
requisite transfer of such Data, as may be required to a broker or other third party with whom
Optionee may elect to deposit any Shares acquired upon the exercise of this Option. Optionee
understands that Data will be held only as long as is necessary to implement, administer and manage
participation in the Plan. Optionee may, at any time, view Data, request additional information
about the storage and processing of the Data, require any necessary amendments to the Data or
refuse or withdraw the consents herein, in any case without cost, by contacting the Stock Plan
Administrator in writing. Optionee understands that refusing or withdrawing consent may affect
Optionee’s ability to participate in the Plan. For more information on the consequences of
refusing to consent or withdrawing consent, Optionee may contact the
Stock Plan Administrator at
the Company.

5

 

11. Copies of Plan Materials. Optionee acknowledges that Optionee has received copies of
the Plan and the Plan prospectus from the Company and agrees to receive stockholder information,
including copies of any annual report, proxy statement and periodic report, from the investors
section of the Company’s website at http://www.loopnet.com. Optionee acknowledges that copies of
the Plan, Plan prospectus, Plan information and stockholder information are also available upon
written or telephonic request to the Stock Plan Administrator.

12. Entire Agreement; Plan Controls. The Plan is incorporated herein by reference. The
Plan and this Agreement constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and agreements of the Company
and Optionee with respect to the subject matter hereof, and may not be modified adversely to
Optionee’s interest except by means of a writing signed by the Company and Optionee. This
Agreement is governed by the laws of the state of Delaware. In the event of any conflict between
the terms and provisions of the Plan and this Agreement, the Plan terms and provisions shall
govern. Capitalized terms used but not defined in this Agreement have the meanings assigned to
them in the Plan. Certain other important terms governing this Agreement are contained in the
Plan.

	 	 	 	 	 	 	 
	Accepted by Optionee:	 	LOOPNET, INC.	 	 
	 
	 	 	 	 	 	 
	 

[Optionee Name]

	 	By:
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	 
 

	 	 

RETAIN THIS AGREEMENT FOR YOUR RECORDS

6

 

LOOPNET, INC.

2006 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

     THIS RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”), dated ‹GRANT DATE› between LoopNet,
Inc., a Delaware corporation (“Company”), and ‹EMPNO›‹NAME› (the “Employee”), is entered into as
follows:

     WHEREAS, the continued participation of the Employee is considered by the Company to be
important for the Company’s continued growth; and

     WHEREAS, in order to give the Employee an incentive to continue in the employ of the Company
and to assure his or her continued commitment to the success of the Company, the Compensation
Committee of the Board of Directors of the Company or its delegates (the “Committee”) has
determined that the Employee shall be granted stock units representing hypothetical shares of the
Company’s common stock (“Stock Units”), with each Stock Unit equal in value to one share of the
Company’s common stock (the “Stock”), subject to the restrictions stated below and in accordance
with the terms and conditions of the LoopNet, Inc. 2006 Equity Incentive Plan (the “Plan”), a copy
of which can be obtained by written or
telephonic request to the Stock Plan Administrator.

     THEREFORE, the parties agree as follows:

1. Grant of Stock Units. Subject to the terms and conditions of this Agreement and of the
Plan, the Company hereby grants to the Employee Stock Units covering ‹SHARES› shares of Stock (the
“Shares”).

2. Vesting Schedule. Subject to Employee’s not experiencing a Termination of Employment
during the following vesting period, the interest of the Employee in the Stock Units shall vest as
follows: ‹INSERT VESTING PROVISION HERE›. Therefore, provided the Employee has not experienced a
Termination of Employment prior to the close of business on the ‹INSERT FULL VESTING DATE HERE›,
the interest of the Employee in the Stock Units shall become fully vested on that date.

3. Benefit Upon Vesting. Upon the vesting of the Stock Units, the Employee shall be
entitled to receive, as soon as administratively practicable, a number of Shares equal to:

(a) the number of Stock Units that have vested multiplied by the fair market value (as
defined in the Plan) of a share of Stock on the date on which such Stock Units vest, and

(b) a dividend equivalent payment determined by

     (1) multiplying the number of vested Stock Units by the dividend per share of Stock
on each dividend payment date between the date here of and the vesting date to determine the
dividend equivalent amount for each dividend payment date;

1

 

     (2) dividing the amount determined in (1) above by the fair market value of a share of
Stock on the date of such dividend payment to determine the number of additional Stock Units
to be credited to the Employee; and

     (3) multiplying the number of additional Stock Units determined in (2) above by the
fair market value of a share of Stock on the vesting date to determine the aggregate amount
of dividend equivalent payments for such vested Stock Units;

provided, however, that if any aggregated dividend equivalent payments in paragraph (b)(3) above or
otherwise results in a payment of a fractional Share, such fractional share shall be rounded down
to the nearest whole Share.

4. Restrictions.

(a) Except as otherwise provided for in this Agreement, the Stock Units or rights granted
hereunder may not be sold, pledged or otherwise transferred until the Stock Units become
vested in accordance with Section 2 and the Shares are issued under Section 3. The period
of time between the date hereof and the date the Stock Units become fully vested is referred
to herein as the “Restriction Period.”

(b) Except as otherwise provided for in this Agreement, if the Employee’s employment with
the Company is terminated at any time for any reason (including as a result of the
Employee’s death or disability (including a Total and Permanent Disability) prior to the
lapse of the Restriction Period, or the Employee otherwise experiences a Termination of
Employment during the Restriction Period, all Stock Units granted hereunder that have not
vested by such termination date and that are held by the Employee as of such date shall be
forfeited by, and no further rights shall accrue to, the Employee.

5. No Stockholder Rights. Stock Units represent hypothetical shares of Stock. During the
Restriction Period, the Employee shall not be entitled to any of the rights or benefits generally
accorded to stockholders.

6. Taxes.

(a) The Employee shall be liable for any and all taxes, including withholding taxes,
arising out of this grant or the vesting of Stock Units hereunder. In the event that the
Company or the Employer (as defined below) is required to withhold taxes as a result of the
grant or vesting of Stock Units, or subsequent sale of Stock acquired pursuant to such Stock
Units, or due upon receipt of dividend equivalent payments, the Employee shall surrender a
sufficient number of whole shares of such Stock or make a cash payment as necessary to cover
all applicable required withholding taxes and required social security contributions at the
time the restrictions on the Stock Units lapse, unless alternative procedures for such
payment are established by the Company. The Employee will receive a cash refund for any
fraction of a surrendered share not necessary for required
withholding taxes and required social security contributions. To the extent that any

2

 

surrender of Stock or payment of cash or alternative procedure for such payment is
insufficient, the Employee authorizes the Company, its Affiliates and Subsidiaries, which
are qualified to deduct tax at source, to deduct all applicable required withholding taxes
and social security contributions from the Employee’s compensation. The Employee agrees to
pay any amounts that cannot be satisfied from wages or other cash compensation, to the
extent permitted by law.

(b) Regardless of any action the Company or the Employee’s employer (the “Employer”) takes
with respect to any or all income tax, social security, payroll tax, payment on account or
other tax-related withholding (“Tax-Related Items”), the Employee acknowledges and agrees
that the ultimate liability for all Tax-Related Items legally due by him is and remains the
Employee’s responsibility and that the Company and or the Employer (i) make no
representations nor undertakings regarding the treatment of any Tax-Related Items in
connection with any aspect of this grant of Stock Units, including the vesting of Stock
Units, subsequent payment of Stock and/or cash related to such Stock Units or the subsequent
sale of any Stock acquired pursuant to such Stock Units and receipt of any dividend
equivalent payments; and (ii) do not commit to structure the terms or any aspect of this
grant of Stock Units to reduce or eliminate the Employee’s liability for Tax-Related Items.
The Employee shall pay the Company or the Employer any amount of Tax-Related Items that the
Company or the Employer may be required to withhold as a result of the Employee’s
participation in the Plan or the Employee’s receipt of Stock Units that cannot be satisfied
by the means previously described, and if the Employee does not otherwise so pay the Company
or the Employer, then the Company or the Employer may withhold amounts from the Employee’s
cash compensation to satisfy such withholding obligation. The Company may refuse to deliver
the benefit described in Section 3 if the Employee fails to comply with the Employee’s
obligations in connection with the Tax-Related Items (including if the Employee’s cash
compensation is not sufficient to satisfy such obligations).

7. Data Privacy Consent. The Employee hereby explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of the Employee’s personal data as
described in this document by and among, as applicable, the Employer, and the Company and its
Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing
the Employee’s participation in the Plan. The Employee understands that the Company, its
Affiliates, its Subsidiaries and the Employer hold certain personal information about the Employee,
including, but not limited to, name, home address and telephone number, date of birth, social
security or insurance number or other identification number, salary, nationality, job title, any
shares of stock or directorships held in the Company, details of all options or any other
entitlement to shares of stock awarded, canceled, purchased, exercised, vested, unvested or
outstanding in the Employee’s favor for the purpose of implementing, managing and administering the
Plan (“Data”). The Employee understands that the Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that these recipients
may be located in the Employee’s country or elsewhere and that the recipient country may have
different data privacy laws and protections than the Employee’s country. The Employee understands
that he may request a list with the names and addresses of
any potential recipients of the Data by contacting the Stock Plan Administrator. The

3

 

Employee
authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or
other form, for the purposes of implementing, administering and managing the Employee’s
participation in the Plan, including any requisite transfer of such Data, as may be required to a
broker or other third party with whom the Employee may elect to deposit any Stock acquired under
the Plan. The Employee understands that Data will be held only as long as is necessary to
implement, administer and manage participation in the Plan. The Employee understands that he may,
at any time, view Data, request additional information about the storage and processing of the
Data, require any necessary amendments to the Data or refuse or withdraw the consents herein, in
any case without cost, by contacting the Stock Plan
Administrator in writing. The Employee
understands that refusing or withdrawing consent may affect the Employee’s ability to participate
in the Plan. For more information on the consequences of refusing to consent or withdrawing
consent, the Employee understands that he or she may contact the
Stock Plan Administrator at the
Company.

8. Plan Information. The Employee acknowledges that the Employee has received copies of
the Plan and the Plan prospectus from the Company and agrees to receive stockholder information,
including copies of any annual report, proxy statement and periodic report, from the investors
section of the Company’s website at http://www.loopnet.com. The Employee acknowledges that copies
of the Plan, Plan prospectus, Plan information and stockholder information are also available upon
written or telephonic request to the Stock Plan Administrator.

9. Employee Acknowledgements. By accepting this grant of Stock Units, the Employee
acknowledges and agrees that the Plan is established voluntarily by the Company, it is discretionary in nature and
may be modified, amended, suspended or terminated by the Company at any time unless
otherwise provided in the Plan or this Agreement the
Employee acknowledges that all decisions with respect to future grants, if any, will be at the sole discretion of
the Company;

	•	 	The Employee’s participation in the Plan shall not create a right to further employment
with Employer and shall not interfere with the ability of Employer to terminate the
Employee’s employment relationship at any time with or without cause and it is expressly
agreed and understood that employment is terminable at the will of either party, insofar as
permitted by law

	•	 	The Employee agrees
that stock units,

4

 

stock unit grants and resulting benefits are an extraordinary item that do
not constitute compensation of any kind for services of any kind rendered to the Company or
the Employer and are outside the scope of the Employee’s employment contract, if any.

	•	 	stock units, stock unit grants and resulting benefits are not part of normal or expected
compensation or salary for any purposes, including, but not limited to calculating any
severance, resignation, termination, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments insofar as permitted
by law.

In the event that the Employee is not an employee of the Company, this grant of Stock
Units will not be interpreted to form an employment contract or relationship with the
Company, the Employer or any Subsidiary or Affiliate of the Company.

The
Employee acknowledges that the future value of the Shares is unknown, may increase or decrease from the date of
grant or vesting of the Stock Unit and cannot be predicted with
certainty.

In consideration of this grant of Stock Units, no claim or entitlement to compensation
or damages shall arise from termination of this grant of Stock Units or diminution in value
of this grant of Stock Units resulting from the Employee’s Termination of Employment by the
Company or the Employer (for any reason whatsoever and whether or not
in breach of Applicable Laws).

10. Miscellaneous.

5

 

(a) The Company shall not be required to treat as the owner of Stock Units, and associated
benefits hereunder, any transferee to whom such Stock Units or benefits shall have been so
transferred in violation of this Agreement.

(b) The parties agree to execute such further instruments and to take such action as may
reasonably be necessary to carry out the intent of this Agreement.

(c) Any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon delivery to the Employee at the Employee’s address then on file with
the Company.

(d) The Plan is incorporated herein by reference. The Plan and this Agreement constitute
the entire agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and the Employee with
respect to the subject matter hereof, and may not be modified adversely to the Employee’s
interest except by means of a writing signed by the Company and the Employee. This
Agreement is governed by the laws of the state of Delaware. In the event of any conflict
between the terms and provisions of the Plan and this Agreement, the Plan terms and
provisions shall govern. Capitalized terms used but not defined in this Agreement have the
meanings assigned to them in the Plan. Certain other important terms governing this
contract are contained in the Plan.

(e) The provisions of this Agreement are severable and if any one or more provisions are
determined to be illegal or otherwise unenforceable, in whole or in part, the remaining
provisions shall nevertheless be binding and enforceable.

	 	 	 	 	 	 	 
	Accepted by Employee:	 	LOOPNET, INC.	 	 
	 
	 	 	 	 	 	 
	 

[Employee Name]

	 	By:
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	 
 

	 	 

RETAIN THIS AGREEMENT FOR YOUR RECORDS

6

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