Document:

Exhibit 10.2  

LOCAL MATTERS, INC.  

2004 EQUITY INCENTIVE PLAN  

Adopted: December 29, 2004

Amended by Board: March 31, 2005 and April 11, 2005

Approved by Stockholders: April 12, 2005 

   TABLE OF CONTENTS  

	 
	 	 
	 	 

	SECTION 1.	 	Establishment and Purpose	 	1
	

SECTION 2.	
 	

Definitions	
 	

1
	

SECTION 3.	
 	

Administration	
 	

2
	

a.	
 	

Committees of the Board of Directors	
 	

2
	

b.	
 	

Authority of the Board of Directors	
 	

3
	

SECTION 4.	
 	

Eligibility	
 	

3
	

a.	
 	

General Rule	
 	

3
	

b.	
 	

Ten-Percent Stockholders	
 	

3
	

SECTION 5.	
 	

Shares Subject To Plan	
 	

3
	

a.	
 	

Basic Limitation	
 	

3
	

b.	
 	

Additional Shares	
 	

3
	

SECTION 6.	
 	

Terms and Conditions of Awards or Sales	
 	

4
	

a.	
 	

Stock Purchase Agreement	
 	

4
	

b.	
 	

Duration of Offers and Nontransferability of Rights	
 	

4
	

c.	
 	

Purchase Price	
 	

4
	

d.	
 	

Withholding Taxes	
 	

4
	

e.	
 	

Restrictions on Transfer of Shares and Minimum Vesting	
 	

4
	

f.	
 	

Accelerated Vesting	
 	

4
	

SECTION 7.	
 	

Terms and Conditions of Options	
 	

4
	

a.	
 	

Stock Option Agreement	
 	

4
	

b.	
 	

Number of Shares	
 	

5
	

c.	
 	

Exercise Price	
 	

5
	

d.	
 	

Withholding Taxes	
 	

5
	

e.	
 	

Exercisability	
 	

5
	

f.	
 	

Accelerated Exercisability	
 	

5
	

g.	
 	

Basic Term	
 	

5
	

h.	
 	

Nontransferability	
 	

5
	

i.	
 	

Termination of Service (Except by Death)	
 	

5
	

j.	
 	

Leaves of Absence	
 	

6
	

k.	
 	

Death of Optionee	
 	

6
	

l.	
 	

No Rights as a Stockholder	
 	

6
	

m.	
 	

Modification, Extension and Assumption of Options	
 	

6
	 	 	 	 	 

2

 

	

n.	
 	

Restrictions on Transfer of Shares and Minimum Vesting	
 	

6
	

SECTION 8.	
 	

Payment For Shares	
 	

7
	

a.	
 	

General Rule	
 	

7
	

b.	
 	

Surrender of Stock	
 	

7
	

c.	
 	

Services Rendered	
 	

7
	

d.	
 	

Promissory Note	
 	

7
	

e.	
 	

Exercise/Sale	
 	

7
	

f.	
 	

Exercise/Pledge	
 	

7
	

SECTION 9.	
 	

Adjustment of Shares	
 	

8
	

a.	
 	

General	
 	

8
	

b.	
 	

Mergers and Consolidations	
 	

8
	

c.	
 	

Reservation of Rights	
 	

8
	

SECTION 10.	
 	

Securities Law Requirements	
 	

8
	

a.	
 	

General	
 	

8
	

b.	
 	

Financial Reports	
 	

9
	

SECTION 11.	
 	

No Retention Rights	
 	

9
	

SECTION 12.	
 	

Duration and Amendments	
 	

9
	

a.	
 	

Term of the Plan	
 	

9
	

b.	
 	

Right to Amend or Terminate the Plan	
 	

9
	

c.	
 	

Effect of Amendment or Termination	
 	

9

3

   LOCAL MATTERS, INC.

2004 EQUITY INCENTIVE PLAN  

SECTION 1.    Establishment and Purpose.  

        The purpose of the Plan is to offer selected individuals an opportunity to acquire a proprietary interest in the success of the Company, or to increase such
interest, by purchasing Shares of the Company's Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may
include Nonstatutory Options as well as Incentive Stock Options intended to qualify under Section 422 of the Code. 

SECTION 2.    Definitions.  

        As used herein, the following definitions shall apply: 

	a)
	"Board
of Directors" shall mean the Board of Directors of the Company, as constituted from time to time.

	b)
	"Change
in Control" shall mean:

	(i)
	The
consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the
continuing or surviving entity's securities outstanding immediately after such merger, consolidation or other reorganization is owned by persons who were not stockholders of the Company immediately
prior to such merger, consolidation or other reorganization; or

	(ii)
	The
sale, transfer or other disposition of all or substantially all of the Company's assets.

	(iii)
	A
transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company's incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company's securities immediately before such transaction.

	c)
	"Code"
shall mean the Internal Revenue Code of 1986, as amended.

	d)
	"Committee"
shall mean a committee of the Board of Directors, as described in Section 3(a).

	e)
	"Company"
shall mean Local Matters, Inc., a Delaware corporation.

	f)
	"Consultant"
shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors.

	g)
	"Disability"
shall mean total and permanent disability as defined in Section 22(e)(3) of the Code.

	h)
	"Employee"
shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary.

	i)
	"Exercise
Price" shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement.

	j)
	"Fair
Market Value" shall mean the fair market value of a Share, as determined by the Board of Directors in good faith. Such determination shall be conclusive and binding on all
persons.

	k)
	"ISO"
shall mean an employee incentive stock option described in section 422(b) of the Code.

	l)
	"Nonstatutory
Option" shall mean a stock option not described in Sections 422(b) or 423(b) of the Code. 

1

 

	m)
	"Option"
shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.

	n)
	"Optionee"
shall mean an individual who holds an Option.

	o)
	"Outside
Director" shall mean a member of the Board of Directors who is not an Employee.

	p)
	"Parent"
shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the
adoption of the Plan shall be considered a Parent commencing as of such date.

	q)
	"Plan"
shall mean this Local Matters, Inc. 2004 Equity Incentive Plan.

	r)
	"Purchase
Price" shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors.

	s)
	"Purchaser"
shall mean an individual to whom the Board of Directors has offered the right to acquire Shares under the Plan (other than upon exercise of an Option).

	t)
	"Service"
shall mean service as an Employee, Outside Director or Consultant.

	u)
	"Share"
shall mean one share of Stock, as adjusted in accordance with Section 9 (if applicable).

	v)
	"Stock"
shall mean the Common Stock of the Company, with a par value of $0.001 per Share and with the rights, preferences and privileges as set forth in the Company's Certificate of
Incorporation.

	w)
	"Stock
Award" means any right granted under the Plan to acquire Shares, including an Option.

	x)
	"Stock
Award Recipient" shall mean an individual who holds a Stock Award.

	y)
	"Stock
Option Agreement" shall mean the agreement between the Company and an Optionee, which contains the terms, conditions and restrictions pertaining to the Optionee's Option.

	z)
	"Stock
Purchase Agreement" shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan, which contains the terms, conditions and restrictions
pertaining to the acquisition of such Shares.

	aa)
	"Subsidiary"
means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that
attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. 

SECTION 3.    Administration.  

	a.
	Committees
of the Board of Directors. 

        The
Plan may be administered by the Board or a Committee appointed by the Board, which Committee shall be constituted to comply with applicable laws. Each Committee shall have such
authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been appointed, the entire Board of Directors shall administer the Plan. Any reference 

2

 

to
the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function. 

	b.
	Authority
of the Board of Directors. 

        Subject
to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the
Plan. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or
Optionee. 

SECTION 4.    Eligibility.  

	a.
	General
Rule. 

        Only
Employees, Outside Directors and Consultants shall be eligible for the grant of Options or the direct award or sale of Shares. Only Employees shall be eligible for the grant of
ISOs. 

	b.
	Ten-Percent
Stockholders. 

        An
individual who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible
for designation as an Optionee or Purchaser unless (i) the Exercise Price is at least 110% of the Fair Market Value of a Share on the date of grant, (ii) the Purchase Price (if any) is
at least 100% of the Fair Market Value of a Share and (iii) in the case of an ISO, such ISO by its terms is not exercisable after the expiration of five years from the date of grant. For
purposes of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied. 

SECTION 5.    Shares Subject To Plan.  

	a.
	Basic
Limitation. 

        Shares
offered under the Plan may be authorized but unissued Shares or treasury Shares. Subject to the provisions of Section 9 relating to Adjustment of Shares, the aggregate
number of Shares that may be issued under the Plan (upon exercise of Options or other rights to acquire Shares) shall not exceed in the aggregate 3,725,000* Shares. The number of Shares that are
subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares available for issuance
under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. 

	*
	As
amended to reflect recapitalization of the Company on April 14, 2005.

	b.
	Additional
Shares. 

        In
the event that any outstanding Option or other right for any reason expires or is canceled or otherwise terminated, the Shares allocable to the unexercised portion of such Option or
other right shall again be available for the purposes of the Plan. In the event that Shares issued under the Plan are reacquired by the Company pursuant to any forfeiture provision, right of
repurchase or right of first refusal, such Shares shall again be available for the purposes of the Plan, except that subject to the provisions of Section 9 relating to Adjustment of Shares, the
aggregate number of Shares that may be issued under the Plan (upon exercise of Options or other rights to acquire Shares) shall not exceed in the aggregate 3,725,000* Shares. 

	*
	As
amended to reflect recapitalization of the Company on April 14, 2005. 

3

 

SECTION 6.    Terms and Conditions of Awards or Sales.  

	a.
	Stock
Purchase Agreement. 

        Each
award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or
sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors
deems appropriate for inclusion in a Stock Purchase Agreement. The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical. 

	b.
	Duration
of Offers and Nontransferability of Rights. 

        Any
right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was
communicated to the Purchaser by the Company. Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted. 

	c.
	Purchase
Price. 

        The
Purchase Price of Shares to be offered under the Plan, if newly issued, shall not be less than 85% of the fair market value of such Shares, and a higher percentage may be required by
Section 4(b). Subject to the preceding sentence, the Purchase Price shall be determined by the Board of Directors at its sole discretion. The Purchase Price shall be payable in a form described
in Section 8. 

	d.
	Withholding
Taxes. 

        As
a condition to the purchase of Shares, the Purchaser shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign
withholding tax obligations that may arise in connection with such purchase. 

	e.
	Restrictions
on Transfer of Shares and Minimum Vesting. 

        Any
Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the
Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares
generally. In the case of a Purchaser who is not an officer of the Company, an Outside Director or a Consultant, any right to repurchase the Purchaser's Shares at the original Purchase Price (if any)
upon termination of the Purchaser's Service shall lapse at least as rapidly as 20% per year over the five-year period commencing on the date of the award or sale of the Shares. Any such
right may be exercised only within 90 days after the termination of the Purchaser's Service for cash or for cancellation of indebtedness incurred in purchasing the Shares. 

	f.
	Accelerated
Vesting. 

        Accelerated
Vesting and the lapsing of any right to repurchase a Purchaser's Shares at the original Purchase Price (if any) upon termination of the Purchaser's Service shall be specified
in the terms of each specific Stock Purchase Agreement. 

SECTION 7.    Terms and Conditions of Options.  

	a.
	Stock
Option Agreement. 

        Each
grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and
conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan 

4

 

and
which the Board of Directors deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. 

	b.
	Number
of Shares. 

        Each
Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 9. The
Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option. 

	c.
	Exercise
Price. 

        Each
Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than 100% of the Fair Market Value of a Share on the date of grant, and a
higher percentage may be required by Section 4(b). The Exercise Price of a Nonstatutory Option shall not be less than 85% of the Fair Market Value of a Share on the date of grant, and a higher
percentage may be required by Section 4(b). Subject to the preceding two sentences, the Exercise Price under any Option shall be determined by the Board of Directors at its sole discretion. The
Exercise Price shall be payable in a form described in Section 8. 

	d.
	Withholding
Taxes. 

        As
a condition to the exercise of an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign
withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Board of Directors may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option. 

	e.
	Exercisability.

        Each
Stock Option Agreement shall specify the date when all or any installment of the Option is to become vested and therefore exercisable. In the case of an Option intended to qualify
as an ISO, it shall vest at least as rapidly as 20% per year over the five-year period commencing on the date of grant. Subject to the preceding sentence, the exercisability provisions of
any Stock Option Agreement shall be determined by the Board of Directors at its sole discretion. 

	f.
	Accelerated
Exercisability. 

        Accelerated
exercisability (if any) shall be specified in each particular Stock Option Agreement, which shall provide if and when an Optionee's Options shall vest and become exercisable
in full. 

	g.
	Basic
Term. 

        The
Stock Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the date of grant, and a shorter term may be required by
Section 4(b). Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire. 

	h.
	Nontransferability.

        No
Option shall be transferable by the Optionee other than by beneficiary designation, will or the laws of descent and distribution. An Option may be exercised during the lifetime of the
Optionee only by the Optionee or by the Optionee's guardian or legal representative. No Option or interest therein may be transferred, assigned, pledged or hypothecated by the Optionee during the
Optionee's lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process. 

	i.
	Termination
of Service (Except by Death). 

5

 

        If
an Optionee's Service terminates for any reason other than the Optionee's death, then the Optionee's Options shall expire on the earliest of the following occasions: 

	(i)
	The
expiration date determined pursuant to Subsection (g) above;

	(ii)
	The
date 90-days after the termination of the Optionee's Service for any reason other than Disability, or such later date as the Board of Directors may determine; or

	(iii)
	The
date six months after the termination of the Optionee's Service by reason of Disability, or such later date as the Board of Directors may determine.

	j.
	Leaves
of Absence. 

        For
purposes of Subsection (i) above, Service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in
writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company). 

	k.
	Death
of Optionee. 

        If
an Optionee dies while the Optionee is in Service, then the Optionee's Options shall expire on the earlier of the following dates: 

	(i)
	The
expiration date determined pursuant to Subsection (g) above; or

	(ii)
	The
date 12 months after the Optionee's death. 

        All
or part of the Optionee's Options may be exercised at any time before the expiration of such Options under the preceding sentence by the executors or administrators of the Optionee's
estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable
before the Optionee's death or became exercisable as a result of the death. The balance of such Options shall lapse when the Optionee dies. 

	l.
	No
Rights as a Stockholder. 

        An
Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by the Optionee's Option until such person becomes entitled to
receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option. 

	m.
	Modification,
Extension and Assumption of Options. 

        Within
the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the
Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, impair the Optionee's rights or increase the Optionee's obligations under such Option. 

n.    Restrictions on Transfer of Shares and Minimum Vesting. 

        Any
Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the
Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any restrictions that may apply to holders of Shares
generally. In the case of an Optionee who is not an officer of the Company, an Outside Director or a Consultant, any right to repurchase the Optionee's Shares at the original Exercise Price upon
termination of the Optionee's Service shall lapse at least as rapidly as 20% per year over the five-year period commencing on the 

6

 

date
of the option grant. Any such repurchase right may be exercised only within 90 days after the termination of the Optionee's Service for cash or for cancellation of indebtedness incurred in
purchasing the Shares. 

SECTION 8.    Payment For Shares.  

	a.
	General
Rule. 

        The
entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise
provided in this Section 8. 

	b.
	Surrender
of Stock. 

        To
the extent that a Stock Option Agreement so provides, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already
owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at
their Fair Market Value on the date when the Option is exercised. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause
the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes. 

        In
general, the recognition of compensation expense as a result of a "stock for stock" exercise is avoided if the optionee has owned the old shares for at least six months or if the old
shares were not acquired by exercising an option. 

	c.
	Services
Rendered. 

        At
the discretion of the Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award. 

	d.
	Promissory
Note. 

        To
the extent that a Stock Option Agreement or Stock Purchase Agreement so provides, all or a portion of the Exercise Price or Purchase Price (as the case may be) of Shares issued under
the Plan may be paid with a full-recourse promissory note. However, the par value of the Shares, if newly issued, shall be paid in cash or cash equivalents. The Shares shall be pledged as
security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if
any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate,
amortization requirements (if any) and other provisions of such note. 

	e.
	Exercise/Sale.

        To
the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and
any withholding taxes. 

f.    Exercise/Pledge. 

        To
the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a 

7

 

loan,
and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 

SECTION 9.    Adjustment of Shares.  

a.    General. 

        In
the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of an extraordinary dividend payable in a form other than Shares in
an amount that has a material effect on the Fair Market Value of the Stock, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a
spin-off, a reclassification or a similar occurrence, the Board of Directors shall make appropriate adjustments in one or more of (i) the number of Shares available for future
grants under Section 4, (ii) the number of Shares covered by each outstanding Stock Award or (iii) the Exercise Price or Purchase Price under each outstanding Stock Award. 

b.    Mergers and Consolidations. 

        In
the event that the Company is a party to a merger or consolidation, outstanding Stock Awards shall be subject to the agreement of merger or consolidation. Such agreement, without the
consent of the Stock Award Recipient, may provide for: 

	(i)
	The
continuation of such outstanding Stock Awards by the Company (if the Company is the surviving corporation);

	(ii)
	The
assumption of the Plan and such outstanding Stock Awards by the surviving corporation or its parent;

	(iii)
	The
substitution by the surviving corporation or its parent of rights to acquire Shares with substantially the same terms as such outstanding Stock Awards; or

	(iv)
	The
cancellation of each outstanding Stock Award after payment to the Stock Award Recipient of an amount in cash or cash equivalents equal to (A) the Fair Market Value of the
Shares subject to such Stock Award at the time of the merger or consolidation or the preference amount for the Stock issuable upon exercise of the Stock Award, whichever is greater, minus
(B) the Exercise Price or Purchase Price of the Shares subject to such Stock Award.

	c.
	Reservation
of Rights. 

        Except
as provided in this Section 9, a Stock Award Recipient shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class,
(ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number, Exercise Price, or Purchase Price of Shares
subject to a Stock Award. The grant of a Stock Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. 

SECTION 10.    Securities Law Requirements.  

a.    General. 

        Shares
shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without
limitation) the 

8

 

Securities
Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on
which the Company's securities may then be traded. 

b.    Financial Reports. 

        Following
the end of each fiscal year the Company shall make available to stockholders who have received or purchased Stock under the Plan its balance sheet and income statement. Such
balance sheet and income statement need not be audited. 

SECTION 11.    No Retention Rights.  

        Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Purchaser or Optionee any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Purchaser or Optionee) or of the Purchaser or
Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. 

SECTION 12.    Duration and Amendments.  

a.    Term of the Plan. 

        The
Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors, subject to the approval of the Company's stockholders. In the event that the
stockholders fail to approve the Plan within 12 months after its adoption by the Board of Directors, any grants of Options or sales or awards of Shares that have already occurred shall be
rescinded, and no additional grants, sales or awards shall be made thereafter under the Plan. The Plan shall terminate automatically 10 years after its adoption by the Board of Directors and
may be terminated on any earlier date pursuant to Subsection (b) below. 

	b.
	Right
to Amend or Terminate the Plan. 

        The
Board of Directors may amend, suspend or terminate the Plan at any time and for any reason; provided, however, that any amendment of the Plan which increases the number of Shares
available for issuance under the Plan (except as provided in Section 9), or which materially changes the class of persons who are eligible for the grant of ISOs, shall be subject to the
approval of the Company's stockholders. Stockholder approval shall not be required for any other amendment of the Plan. 

	c.
	Effect
of Amendment or Termination. 

        No
Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan. 

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Exhibit 10.3  

 
 

LOCAL MATTERS, INC.    
    

 
 

2008 EQUITY INCENTIVE PLAN    
    

ADOPTED BY THE BOARD OF DIRECTORS:                        , 2008

APPROVED BY THE STOCKHOLDERS:                        , 2008

TERMINATION DATE:                        , 2018  

1.    GENERAL.  

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

        (b)   Available Stock Awards. The Plan provides for the grant of the following Stock Awards: (i) Incentive Stock
Options, (ii) Nonstatutory Stock Options, (iii) Stock Purchase Awards, (iv) Stock Bonus Awards, (v) Stock Appreciation Rights, (vi) Stock Unit Awards, and
(vii) Other Stock Awards. 

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

2.    DEFINITIONS.  

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

        (a)   "Affiliate" means (i) any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each corporation in the unbroken chain (other than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other corporations in such chain, and (ii) any corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other corporations in such chain. The Board shall have the authority to determine (i) the time or times at which the
ownership tests are applied, and (ii) whether "Affiliate" includes entities other than corporations within the foregoing definition. 

        (b)   "Board" means the Board of Directors of the Company. 

        (c)   "Capitalization Adjustment" has the meaning ascribed to that term in Section 10(a). 

        (d)   "Cause" means, with respect to a Participant, the occurrence of any of the following:
(i) such Participant's commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) such
Participant's attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant's intentional, material violation of any material contract
or agreement between the Participant and the Company or any statutory duty owed to the Company; (iv) such Participant's unauthorized use or disclosure of the Company's confidential information
or trade secrets; or (v) such Participant's gross misconduct. The determination that a termination is for Cause shall be made by the Company in its 

1

 

sole
discretion. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Stock Awards held by such
Participant shall have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose. 

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

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

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

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

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

        (v)   individuals who, on the date this Plan is adopted by the Board, are members of the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the members of the Board; provided,
however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board. 

2

 

        The
term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company. 

        Notwithstanding
the foregoing or any other provision of this Plan, the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or
any Affiliate and the Participant shall supersede the foregoing definition with respect to Stock Awards subject to such agreement; provided, however,
that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply. 

        (f)    "Code" means the Internal Revenue Code of 1986, as amended. 

        (g)   "Committee" means a committee of one (1) or more members of the Board to whom authority
has been delegated by the Board in accordance with Section 3(c). 

        (h)   "Common Stock" means the common stock of the Company. 

        (i)    "Company" means Local Matters, Inc., a Delaware corporation. 

        (j)    "Consultant" means any person, including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the Board of Directors of an Affiliate and is compensated for such
services. However, service solely as a Director, or payment of a fee for such service, shall not cause a Director to be considered a "Consultant" for purposes of the Plan. 

        (k)   "Continuous Service" means that the Participant's service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant's service with the Company or
an Affiliate, shall not terminate a Participant's Continuous Service; provided, however, if the corporation for which a Participant is rendering service
ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant's Continuous Service shall be considered to have terminated on the date such corporation ceases
to qualify as an Affiliate. For example, a change in status from an employee of the Company to a consultant of an Affiliate or to a Director shall not constitute an interruption of Continuous Service.
To the extent permitted by law, the Board or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service shall be considered interrupted in
the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as
Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company's leave of absence policy or in the written terms of the Participant's leave of
absence. 

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

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

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

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

        (iv)  the consummation of a merger, consolidation or similar transaction following which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of 

3

 

the
merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise. 

        (m)  "Covered Employee" means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code. 

        (n)   "Director" means a member of the Board. 

        (o)   "Disability" means the permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code. 

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

        (q)   "Entity" means a corporation, partnership or other entity. 

        (r)   "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

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

        (t)    "Fair Market Value" means, as of any date, the value of the Common Stock determined as follows: 

        (i)    If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Common Stock) on the date in question, as reported in The Wall Street Journal or
such other source as the Board deems reliable. Unless otherwise provided by the Board, if there is no closing sales price (or closing bid if no sales were reported) for the Common Stock on the date in
question, then the Fair Market Value shall be the closing sales price (or closing bid if no sales were reported) on the last preceding date for which such quotation exists. 

        (ii)   In the absence of such markets for the Common Stock, the Fair Market Value shall be determined by the Board in good
faith. 

        (u)   "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. 

        (v)   "IPO Date" means the date of the underwriting agreement between the Company and the
underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering. 

        (w)  "Non-Employee Director" means a Director who either (i) is not a current
employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the 

4

 

Company
or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of
Regulation S-K promulgated pursuant to the Securities Act ("Regulation S-K")), does not possess an interest in any
other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee director" for purposes of Rule 16b-3. 

        (x)   "Nonstatutory Stock Option" means an Option not intended to qualify as an Incentive Stock Option. 

        (y)   "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. 

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

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

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

        (cc) "Other Stock Award" means an award based in whole or in part by reference to the Common Stock
which is granted pursuant to the terms and conditions of Section 7(f). 

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

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

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

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

        (hh) "Performance Criteria" means the one or more criteria that the Board shall select for purposes
of establishing the Performance Goals for a Performance Period. The Performance Criteria that shall be used to establish such Performance Goals may be based on any one of, or combination of, the
following: (i) earnings per share; (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization (EBITDA);
(iv) net earnings; (v) return on equity; (vi) return on assets, investment, or capital employed; (vii) operating margin; (viii) gross margin; (ix) operating
income; (x) net income (before or after taxes); (xi) net operating income; (xii) net 

5

 

operating
income after tax; (xiii) pre- and after-tax income; (xiv) pre-tax profit; (xv) operating cash flow; (xvi) sales or revenue
targets; (xvii) increases in revenue or product revenue; (xvii) expenses and cost reduction goals; (xix) improvement in or attainment of expense levels; (xx) improvement in
or attainment of working capital levels; (xxi) economic value added; (xxii) market share; (xxiii) cash flow; (xxiv) cash flow per share; (xxv) share price
performance; (xxvi) debt reduction; (xxvii) implementation or completion of projects or processes; (xxviii) customer satisfaction; (xxix) total stockholder return;
(xxx) stockholders' equity; and (xxxi) other measures of performance selected by the Board. Partial achievement of the specified criteria may result in the payment or vesting
corresponding to the degree of achievement as specified in the Stock Award Agreement. The Board shall, in its sole discretion, define the manner of calculating the Performance Criteria it selects to
use for such Performance Period. 

        (ii)   "Performance Goals" means, for a Performance Period, the one or more goals established by the
Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions,
Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or a relevant index. The Board is authorized to make adjustments in
the method of calculating the attainment of Performance Goals for a Performance Period as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude
exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to exclude the effects of changes to generally accepted accounting
standards required by the Financial Accounting Standards Board; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; and (v) to exclude the effects of any
"extraordinary items" as determined under generally accepted accounting principles. The Board also retains the discretion to reduce or eliminate the compensation or economic benefit due upon
attainment of Performance Goals. 

        (jj)  "Performance Period" means the one or more periods of time, which may be of varying and
overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant's right to and the payment
of a Stock Award. 

        (kk) "Performance Stock Award" means an award of shares of Common Stock which is granted pursuant to
the terms and conditions of Section 7(e). 

        (ll)   "Plan" means this Local Matters, Inc. 2008 Equity Incentive Plan. 

        (mm) "Prior Plan" means the Company's 2004 Equity Incentive Plan in effect immediately prior to the
effective date of the Plan as set forth in Section 13. 

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

        (oo) "Securities Act" means the Securities Act of 1933, as amended. 

        (pp) "Stock Appreciation Right" means a right to receive the appreciation on Common Stock that is
granted pursuant to the terms and conditions of Section 7(d). 

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

        (rr)  "Stock Award" means any right granted under the Plan, including an Option, a Stock Purchase
Award, Stock Bonus Award, a Stock Appreciation Right, a Stock Unit Award, Performance Stock Award, or any Other Stock Award. 

6

 

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

        (tt)  "Stock Bonus Award" means an award of shares of Common Stock which is granted pursuant to the
terms and conditions of Section 7(b). 

        (uu) "Stock Bonus Award Agreement" means a written agreement between the Company and a holder of a
Stock Bonus Award evidencing the terms and conditions of a Stock Bonus Award grant. Each Stock Bonus Award Agreement shall be subject to the terms and conditions of the Plan. 

        (vv) "Stock Purchase Award" means an award of shares of Common Stock which is granted pursuant to the
terms and conditions of Section 7(a). 

        (ww) "Stock Purchase Award Agreement" means a written agreement between the Company and a holder of a
Stock Purchase Award evidencing the terms and conditions of a Stock Purchase Award grant. Each Stock Purchase Award Agreement shall be subject to the terms and conditions of the Plan. 

        (xx) "Stock Unit Award" means a right to receive shares of Common Stock which is granted pursuant to
the terms and conditions of Section 7(c). 

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

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

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

3.    ADMINISTRATION.  

        (a)   Administration by Board. The Board shall administer the Plan unless and until the Board delegates administration of the
Plan to a Committee, as provided in Section 3(c). 

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

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

        (ii)   To determine from time to time (1) which of the persons eligible under the Plan shall be granted Stock Awards;
(2) when and how each Stock Award shall be granted; (3) what type or combination of types of Stock Award shall be granted; (4) the provisions of each Stock Award granted (which
need not be identical), including the time or times when a person shall be permitted to receive cash or Common Stock pursuant to a Stock Award; and (5) the number of 

7

 

shares
of Common Stock with respect to which a Stock Award shall be granted to each such person. 

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

        (iv)  To effect, at any time and from time to time, with the consent of any adversely affected Optionholder, (1) the
reduction of the exercise price of any outstanding Option under the Plan; (2) the cancellation of any outstanding Option under the Plan and the grant in substitution therefor of (a) a
new Option under the Plan or another equity plan of the Company covering the same or a different number of shares of Common Stock, (b) a Stock Purchase Award, (c) a Stock Bonus Award,
(d) a Stock Appreciation Right, (e) a Stock Unit Award, (f) an Other Stock Award, (g) cash, and/or (h) other valuable consideration (as determined by the Board, in
its sole discretion); or (3) any other action that is treated as a repricing under generally accepted accounting principles. 

        (v)   To amend the Plan or a Stock Award as provided in Section 11. 

        (vi)  To terminate or suspend the Plan as provided in Section 12. 

8

  

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

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

        (c)   Delegation to Committee.  

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

        (ii)   Section 162(m) and Rule 16b-3 Compliance. In the sole discretion of the Board, the Committee
may consist solely of two (2) or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more Non-Employee Directors, in accordance
with Rule 16b-3. In addition, the Board or the Committee, in its sole discretion, may (1) delegate to a committee of one or more members of the Board who need not be Outside
Directors the authority to grant Stock Awards to eligible persons who are either (a) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income
resulting from such Stock Award, or (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code, and/or (2) delegate to a committee of one or
more members of the Board who need not be Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. 

        (d)   Delegation to an Officer. The Board may delegate to one or more Officers of the Company the authority to do one or both
of the following (i) designate Officers and Employees of the Company or any of its Subsidiaries to be recipients of Stock Awards and the terms thereof, and (ii) determine the number of
shares of Common Stock to be subject to such Stock Awards granted to such Officers and Employees; provided, however, that the Board resolutions
regarding such delegation shall specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to
himself or herself. Notwithstanding anything to the contrary in this Section 3(d), the Board may not delegate to an Officer authority to determine the Fair Market Value of the Common Stock
pursuant to Section 2(t)(ii) above. 

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

4.    SHARES SUBJECT TO THE PLAN.  

        (a)   Share Reserve. Subject to the provisions of Section 10(a) relating to Capitalization Adjustments, the number of
shares of Common Stock that may be issued pursuant to Stock Awards shall not exceed, in the aggregate,    (    ) shares of Common Stock; provided,
however, that such share reserve shall be increased from time to time by the number of shares of Common Stock that (i) are issuable pursuant to stock awards outstanding
under the Company's Prior Plan as of the effective date 

9

 

of
the Plan (as set forth in Section 13), and (ii) but for the termination of the Prior Plan as of the effective date of the Plan, would otherwise have reverted to the share reserve of
the Prior Plan. In addition, the number of shares of Common Stock available for issuance under the Plan shall automatically increase on January 1st of each year commencing in 2008 and ending on
(and including) January 1, 2017, in an amount equal to the lesser of (i)     percent (    %) of the total number of shares of Common Stock outstanding on
December 31st of the preceding calendar year, or (ii)     (    ) shares of Common Stock. Notwithstanding the foregoing, the Board may act prior to the first day of
any calendar year, to provide that there shall be no increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year shall be a lesser number of
shares of Common Stock than would otherwise occur pursuant to the preceding sentence. 

        (b)   Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire or otherwise terminate, in whole
or in part, without having been exercised in full, if any shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited to or repurchased by the Company, including, but not
limited to, any repurchase or forfeiture caused by the failure to meet a contingency or condition required for the vesting of such shares, or if any shares of Common Stock are cancelled in accordance
with the cancellation and regrant provisions of Section 3(b)(iv), then the shares of Common Stock not issued under such Stock Award, or forfeited to or repurchased by the Company, shall revert
to and again become available for issuance under the Plan. If any shares subject to a Stock Award are not delivered to a Participant because such shares are withheld for the payment of taxes or the
Stock Award is exercised through a reduction of shares subject to the Stock Award (i.e., "net exercised"), the number of shares that are not delivered
to the Participant shall remain available for issuance under the Plan. If the exercise price of any Stock Award is satisfied by tendering shares of Common Stock held by the Participant (either by
actual delivery or attestation), then the number of shares so tendered shall remain available for issuance under the Plan. Notwithstanding anything to the contrary in this Section 4(b), subject
to the provisions of Section 10(a) relating to Capitalization Adjustments the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock
Options shall be [note: same as share reserve]    (    ) shares of Common Stock plus the amount of any
increase in the number of shares that may be available for issuance pursuant to Stock Awards pursuant to Section 4(a). 

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

5.    ELIGIBILITY.  

        (a)   Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to Employees. Stock Awards other than
Incentive Stock Options may be granted to Employees, Directors and Consultants. 

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

        (c)   Section 162(m) Limitation on Annual Grants. Subject to the provisions of Section 10(a) relating to
Capitalization Adjustments, [at such time as the Company may be subject to the applicable provisions of Section 162(m) of the Code,] no Employee shall be eligible to be
granted Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value of the Common Stock on the
date the Stock Award is granted covering more than [note: 50% of share reserve]    (    ) shares of Common
Stock during any calendar year. 

10

 

        (d)   Consultants. A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, a
Form S-8 Registration Statement under the Securities Act ("Form S-8") is not available to register either the
offer or the sale of the Company's securities to such Consultant because of the nature of the services that the Consultant is providing to the Company, because the Consultant is not a natural person,
or because of any other rule governing the use of Form S-8. 

6.    OPTION PROVISIONS.  

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

        (a)   Term. The Board shall determine the term of an Option; provided, however,
that subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, no Incentive Stock Option shall be exercisable after the expiration of ten (10) years from the date of
grant. 

        (b)   Exercise Price of an Incentive Stock Option. Subject to the provisions of Section 5(b) regarding Ten Percent
Stockholders, the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant
to an assumption or substitution for another option in a manner consistent with the provisions of Section 424(a) of the Code. 

        (c)   Exercise Price of a Nonstatutory Stock Option. The exercise price of each Nonstatutory Stock Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be
granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner consistent with
the provisions of Section 424(a) of the Code. 

        (d)   Consideration. The purchase price of Common Stock acquired pursuant to the exercise of an Option shall be paid, to the
extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board shall have the authority to grant
Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a
particular method of payment. The methods of payment permitted by this Section 6(d) are: 

        (i)    by cash or check; 

        (ii)   pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales
proceeds; [provided, however, that such program is not in violation of the prohibition on the extension of credit to the Company's executive
officers and Directors under Section 402 of the Sarbanes-Oxley Act of 2002, in the opinion of counsel acceptable to the Company;] 

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

11

 

        (iv)  by a "net exercise" arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued
upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, the
Company shall accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares
to be issued; provided, however, shares of Common Stock will no longer be outstanding under an Option and will not be exercisable thereafter to the
extent that (i) shares are used to pay the exercise price pursuant to the "net exercise," (ii) shares are delivered to the Participant as a result of such exercise, and
(iii) shares are withheld to satisfy tax withholding obligations; 

        (v)   according to a deferred payment or similar arrangement with the Optionholder; provided,
however, that interest shall compound at least annually and shall be charged at the minimum rate of interest necessary to avoid (i) the imputation of interest income to
the Company and compensation income to the Optionholder under any applicable provisions of the Code, and (ii) the treatment of the Option as a variable award for financial accounting purposes;
or 

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

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

        (i)    Restrictions on Transfer. An Option shall not be transferable except by will or by the laws of descent and distribution
and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. 

        (ii)   Domestic Relations Orders. Notwithstanding the foregoing, an Option may be transferred pursuant to a domestic relations
order. 

        (iii) Beneficiary Designation. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the
Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the
Option. 

        (f)    Vesting Generally. The total number of shares of Common Stock subject to an Option may vest and therefore become
exercisable in periodic installments that may or may not be equal. The Option may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be
based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this Section 6(f) are subject to any Option
provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised. 

        (g)   Termination of Continuous Service. In the event that an Optionholder's Continuous Service terminates (other than for
Cause or upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination of Continuous Service) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder's Continuous
Service (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of
Continuous Service, the Optionholder does not exercise his or her Option within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. 

        (h)   Extension of Termination Date. An Optionholder's Option Agreement may provide that if the exercise of the Option
following the termination of the Optionholder's Continuous Service (other than upon the Optionholder's death or Disability or upon a Change in Control) would be prohibited at any 

12

 

time
solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of a period of three (3) months after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option as set forth in the Option Agreement. 

        (i)    Disability of Optionholder. In the event that an Optionholder's Continuous Service terminates as a result of the
Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous
Service), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination of Continuous Service (or such longer or shorter period
specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder does not
exercise his or her Option within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. 

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

        (k)   Termination for Cause. In the event that an Optionholder's Continuous Service is terminated for Cause, the Option shall
terminate immediately and cease to remain outstanding. 

        (l)    Early Exercise. The Option may include a provision whereby the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Any unvested
shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. The Company shall not be required
to exercise its repurchase option until at least six (6) months (or such longer or shorter period of time necessary to avoid a charge to earnings for financial accounting purposes) have elapsed
following exercise of the Option unless the Board otherwise specifically provides in the Option. 

7.    PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.  

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

        (i)    Purchase Price. At the time of the grant of a Stock Purchase Award, the Board will determine the price to be paid by the
Participant for each share subject to the Stock Purchase 

13

 

Award.
To the extent required by applicable law, the price to be paid by the Participant for each share of the Stock Purchase Award will not be less than the par value of a share of Common Stock. 

        (ii)   Consideration. At the time of the grant of a Stock Purchase Award, the Board will determine the consideration
permissible for the payment of the purchase price of the Stock Purchase Award. The purchase price of Common Stock acquired pursuant to the Stock Purchase Award shall be paid either: (i) in cash
or by check at the time of purchase, (ii) at the discretion of the Board, according to a deferred payment or other similar arrangement with the Participant, (iii) by past or future
services
rendered to the Company or an Affiliate, or (iv) in any other form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law. 

        (iii) Vesting. Shares of Common Stock acquired under a Stock Purchase Award may be subject to a share repurchase right or
option in favor of the Company in accordance with a vesting schedule to be determined by the Board. 

        (iv)  Termination of Participant's Continuous Service. In the event that a Participant's Continuous Service terminates, the
Company shall have the right, but not the obligation, to repurchase or otherwise reacquire, any or all of the shares of Common Stock held by the Participant that have not vested as of the date of
termination under the terms of the Stock Purchase Award Agreement. At the Board's election, the price paid for all shares of Common Stock so repurchased or reacquired by the Company may be at the
lesser of: (i) the Fair Market Value on the relevant date, or (ii) the Participant's original cost for such shares. The Company shall not be required to exercise its repurchase or
reacquisition option until at least six (6) months (or such longer or shorter period of time necessary to avoid a charge to earnings for financial accounting purposes) have elapsed following
the Participant's purchase of the shares of stock acquired pursuant to the Stock Purchase Award unless otherwise determined by the Board or provided in the Stock Purchase Award Agreement. 

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

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

        (i)    Consideration. A Stock Bonus Award may be awarded in consideration for (i) past or future services rendered to the
Company or an Affiliate, or (ii) any other form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law. 

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

14

 

        (iii) Termination of Participant's Continuous Service. In the event a Participant's Continuous Service terminates, the
Company may receive via a forfeiture condition, any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination of Continuous Service under the
terms of the Stock Bonus Award Agreement. 

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

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

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

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

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

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

        (v)   Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Stock Unit
Award, as determined by the Board and contained in the Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common
Stock covered by the Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Stock Unit Award credited by reason of such dividend equivalents will be subject
to all the terms and conditions of the underlying Stock Unit Award Agreement to which they relate. 

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

        (d)   Stock Appreciation Rights. Each Stock Appreciation Right Agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The terms and conditions of Stock Appreciation Right Agreements may change from time to time, and the terms and conditions of separate Stock
Appreciation Right Agreements need not be identical; provided, however, 

15

 

that
each Stock Appreciation Right Agreement shall include (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following
provisions: 

        (i)    Strike Price and Calculation of Appreciation. Each Stock Appreciation Right will be denominated in shares of Common Stock
equivalents. The appreciation distribution payable on the exercise of a Stock Appreciation Right will be not greater than an amount equal to the excess of (i) the aggregate Fair Market Value
(on the date of the exercise of the Stock Appreciation Right) of a number of shares of Common Stock equal to the number of share of Common Stock equivalents in which the Participant is vested under
such Stock Appreciation Right, and with respect to which the Participant is exercising the Stock Appreciation Right on such date, over (ii) an amount (the strike price) that will be determined
by the Board at the time of grant of the Stock Appreciation Right. 

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

        (iii) Exercise. To exercise any outstanding Stock Appreciation Right, the Participant must provide written notice of exercise
to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. 

        (iv)  Payment. The appreciation distribution in respect to a Stock Appreciation Right may be paid in Common Stock, in cash, in
any combination of the two or in any other form of consideration, as determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. 

        (v)   Termination of Continuous Service. In the event that a Participant's Continuous Service terminates, the Participant may
exercise his or her Stock Appreciation Right (to the extent that the Participant was entitled to exercise such Stock Appreciation Right as of the date of termination) but only within such period of
time ending on the earlier of (i) the date three (3) months following the termination of the Participant's Continuous Service (or such longer or shorter period specified in the Stock
Appreciation Right Agreement), or (ii) the expiration of the term of the Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement. If, after termination, the Participant
does not exercise his or her Stock Appreciation Right within the time specified herein or in the Stock Appreciation Right Agreement (as applicable), the Stock Appreciation Right shall terminate. 

        (e)   Performance Stock Awards. A Performance Stock Award is any Stock Award that may be granted, may vest, or may be exercised
based upon service conditions, upon the attainment during a Performance Period of certain Performance Goals, or both. The length of any Performance Period, the Performance Goals to be achieved during
the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Board in its sole discretion. The maximum
benefit to be received by any individual in any calendar year attributable to Performance Stock Awards shall not exceed the value of [note: 50% of share
reserve]    (    ) shares of Common Stock. 

        (f)    Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common
Stock may be granted either alone or in addition to Stock Awards provided for under Section 6 and the preceding provisions of this Section 7. Subject to the provisions of the Plan, the
Board shall have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash
equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards. 

16

 

8.    COVENANTS OF THE COMPANY.  

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

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

9.    MISCELLANEOUS.  

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

        (b)   Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms. 

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

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

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

17

 

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

        (f)    Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the Company may, in its sole
discretion, satisfy any federal, state or local tax withholding obligation relating to a Stock Award by any of the following means (in addition to the Company's right to withhold from any compensation
paid to the Participant by the Company) or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares
of Common Stock issued or otherwise issuable to the Participant in connection with the Stock Award; [provided, however, that no shares of
Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid variable award accounting)]; or
(iii) by such other method as may be set forth in the Stock Award Agreement. 

        (g)   Electronic Delivery. Any reference herein to a "written" agreement or document shall include any agreement or document
delivered electronically or posted on the Company's intranet. 

10.    ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS.  

        (a)   Capitalization Adjustments. If any change is made in, or other events occur with respect to, the Common Stock subject to
the Plan or subject to any Stock Award after the effective date of the Plan set forth in Section 13 without the receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in
corporate structure or other transaction not involving the receipt of consideration by the Company (each a "Capitalization Adjustment")), the Board
shall appropriately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 4(a), (ii) the class(es) and maximum number of securities by
which the share reserve is to increase automatically each year pursuant to Section 4(a), (iii) the class(es) and number of securities subject to each outstanding stock award under the
Prior Plan that are added from time to time to the share reserve under the Plan pursuant to Section 4(a), (iv) the class(es) and maximum number of securities that may be issued pursuant
to the exercise of Incentive Stock Options pursuant to Section 4(b), (v) the class(es) and maximum number of securities that may be awarded to any person pursuant to Sections 5(c) and
7(e), and (vi) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board shall make such adjustments, and its determination shall be
final, binding and conclusive. (Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall not be treated as a transaction "without receipt of consideration" by
the Company.) 

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

18

 

        (c)   Corporate Transaction. The following provisions shall apply to Stock Awards in the event of a Corporate Transaction
unless otherwise provided in a written agreement between the Company or any Affiliate and the holder of the Stock Award: 

        (i)    Stock Awards May Be Assumed. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation
(or the surviving or acquiring corporation's parent company) may assume or
continue any or all Stock Awards outstanding under the Plan or may substitute similar stock awards for Stock Awards outstanding under the Plan (including but not limited to, awards to acquire the same
consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant
to Stock Awards may be assigned by the Company to the successor of the Company (or the successor's parent company, if any), in connection with such Corporate Transaction. A surviving corporation or
acquiring corporation may choose to assume or continue only a portion of a Stock Award or substitute a similar stock award for only a portion of a Stock Award. The terms of any assumption,
continuation or substitution shall be set by the Board in accordance with the provisions of Section 3(b). 

        (ii)   Stock Awards Held by [Participants and Recent] [Current] Participants.
In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Stock Awards or substitute
similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous
Service has not terminated [more than three (3) months] prior to the effective time of the Corporate Transaction (referred to as the
"[Participants and Recent] [Current] Participants"), the vesting of such Stock Awards (and, if
applicable, the time at which such Stock Awards may be exercised) shall (contingent upon the effectiveness of the Corporate Transaction) be accelerated in full to a date prior to the effective time of
such Corporate Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate
Transaction), and such Stock Awards shall terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by
the Company with respect to such Stock Awards shall lapse (contingent upon the effectiveness of the Corporate Transaction). [No vested Stock Unit Award shall terminate pursuant to this
Section 10(c)(ii) without being settled by delivery of shares of Common Stock, their cash equivalent, any combination thereof, or in any other form of consideration, as determined by the
Board, prior to the effective time of the Corporate Transaction.] 

        (iii) Stock Awards Held by [Other] Former Participants. In the event of a Corporate Transaction in
which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock
Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by persons other than [Participants and Recent]
[Current] Participants, the vesting of such Stock Awards (and, if applicable, the time at which such Stock Award may be exercised) shall not be accelerated and such Stock
Awards (other than a Stock Award consisting of vested and outstanding shares of Common Stock not subject to the Company's right of repurchase) shall terminate if not exercised (if applicable) prior to
the effective time of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such
Stock Awards shall not terminate and may continue to be exercised notwithstanding the Corporate Transaction. [No vested Stock Unit Award shall terminate pursuant to this
Section 10(c)(iii) without being settled by delivery of shares of Common Stock, their cash equivalent, any combination thereof, or in any other form of consideration, as determined by
the Board, prior to the effective time of the Corporate Transaction.] 

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        (iv)  Payment for Stock Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event a Stock Award will terminate
if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Stock Award may not exercise such Stock Award but will
receive a payment, in such form as may be determined by the Board, equal in value to the excess, if any, of (i) the value of the property the holder of the Stock Award would have received upon
the exercise of the Stock Award, over (ii) any exercise price payable by such holder in connection with such exercise. 

        (d)   Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a
Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant. A
Stock Award may vest as to all or any portion of the shares subject to the Stock Award (i) immediately upon the occurrence of a Change in Control, whether or not such Stock Award is assumed,
continued, or substituted by a surviving or acquiring entity in the Change in Control, or (ii) in the event a Participant's Continuous Service is terminated, actually or constructively, within
a designated period following the occurrence of a Change in Control. In the absence of such provisions, no such acceleration shall occur. 

11.    AMENDMENT OF THE PLAN AND STOCK AWARDS.  

        (a)   Amendment of Plan. Subject to the limitations, if any, of applicable law, the Board at any time, and from time to time,
may amend the Plan. However, except as provided in Section 10(a) relating to Capitalization Adjustments, no amendment shall be effective unless approved by the stockholders of the Company to
the extent stockholder approval is necessary to satisfy applicable law. 

        (b)   Stockholder Approval. The Board, in its sole discretion, may submit any other amendment to the Plan for stockholder
approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of compensation paid to Covered Employees. 

        (c)   Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems
necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to
Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith. 

        (d)   No Impairment of Rights. Rights under any Stock Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless (i) the Company requests the consent of the affected Participant, and (ii) such Participant consents in writing. 

        (e)   Amendment of Stock Awards. The Board, at any time and from time to time, may amend the terms of any one or more Stock
Awards, including, but not limited to, amendments to provide terms more favorable than previously provided in the Stock Award Agreement, subject to any specified limits in the Plan that are not
subject to Board discretion; provided, however, that the rights under any Stock Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the affected Participant, and (ii) such Participant consents in writing. 

12.    TERMINATION OR SUSPENSION OF THE PLAN.  

        (a)   Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on
the day before the tenth (10th) anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the stockholders 

20

 

of
the Company. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated. 

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

13.    EFFECTIVE DATE OF PLAN.  

        The Plan shall become effective on the IPO Date, but no Stock Award shall be exercised (or, in the case of a Stock Purchase Award, Stock Bonus Award, Stock Unit
Award, or Other Stock Award shall be granted) unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after
the date the Plan is adopted by the Board. 

14.    CHOICE OF LAW.  

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

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QuickLinks

LOCAL MATTERS, INC.

2008 EQUITY INCENTIVE PLAN

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