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(1)

Title of each class of securities to which transaction applies:

(2)

Aggregate number of securities to which transaction applies:

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4)

Proposed maximum aggregate value of transaction:

(5)

Total fee paid:

¨

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

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1.

To elect one Class III director to serve for the ensuing three years and until his successor is duly elected.

2.

To approve an amendment to our Restated 1996 Flexible Stock Incentive Plan (the “1996 Plan”) to increase the number of shares added on an annual basis to the number of shares reserved for issuance to an amount equal to the lesser of (A) five percent (5%) of our outstanding shares at the end of our preceding fiscal year and (B) a lesser amount determined by the Board, on the first day of each fiscal year beginning in 2002.

3.

To ratify the appointment of Deloitte & Touche LLP as independent auditors for InfoSpace for the fiscal year ending December 31, 2002.

4.

To transact such other business as may properly come before the meeting or any adjournment or adjournments thereof.

By Order of the Board of Directors,

John M. Hall

Senior Vice President, General Counsel

and Secretary

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Q.

Who may vote at the meeting?

A:

The Board set April 2, 2002 as the record date for the meeting. All stockholders who owned InfoSpace common stock at the close of business on April 2, 2002 may attend and vote at the meeting. Each stockholder is entitled to one vote for each share of common stock held on all matters to be voted on.

Q:

How many votes do you need at the meeting?

A:

A majority of InfoSpace’s outstanding shares as of the record date must be present at the meeting in order to hold the meeting and conduct business. This is called a quorum. Shares that are voted “FOR,” “AGAINST” or “WITHHELD FROM” a matter are treated as being present at the meeting for purposes of establishing a quorum.

•

are present and vote in person at the meeting; or

•

have properly submitted a Proxy Card or voted by telephone or using the Internet.

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Q:

What proposals will be voted on at the meeting?

A:

There are three board proposals scheduled to be voted on at the meeting:

•

Election of the Class III member of the Board of Directors;

•

Approval of amendment to InfoSpace’s Restated 1996 Flexible Stock Incentive Plan; and

•

Ratification of Deloitte & Touche LLP as InfoSpace’s independent auditors.

Q:

What is the voting requirement to approve each of the proposals?

A:

For the election of the Class III Director, the nominee who receives the greatest number of votes from shares present and entitled to vote at the meeting will be elected. To be passed, Proposals 2 and 3 require the affirmative “FOR” vote of a majority of the shares cast at the meeting and entitled to vote.

Q:

How are votes counted?

A:

In the election of the director, you may vote “FOR” the nominee or your vote may be “WITHHELD” with respect to the nominee. You may vote “FOR,”“AGAINST” or “ABSTAIN” on the other proposals. Abstentions will have the same effect as a vote against the proposal. If you just sign your Proxy Card with no further instructions, your shares will be counted as a vote “FOR” each Director and “FOR” each of the approval of the amendment to the Restated 1996 Flexible Stock Incentive Plan and the ratification of Deloitte & Touche LLP as InfoSpace’s independent public accountants.

Q:

How may I vote my shares in person at the meeting?

A:

Shares held directly in your name as the stockholder of record may be voted in person at the meeting. If you choose to attend the meeting, please bring the enclosed Proxy Card or proof of identification for entrance to the meeting. If you hold your shares in street name, you must request a legal proxy from your stockbroker in order to vote at the meeting.

Q:

How can I vote my shares without attending the meeting?

A:

Whether you hold shares directly as a stockholder of record or beneficially in street name, you may vote without attending the meeting. You may vote by granting a proxy or, for shares held in street name, by submitting voting instructions to your stockbroker or nominee. In most cases, you will be able to do this by telephone, using the Internet or by mail. Please refer to the summary instructions included on your Proxy Card. For shares held in street name, the voting instruction card will be included by your stockbroker or nominee.

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Q:

How can I change my vote after I return my Proxy Card?

A:

You may revoke your proxy and change your vote at any time before the final vote at the meeting. You may do this by signing and submitting a new Proxy Card with a later date, voting by telephone or using the Internet as instructed above (your latest telephone or Internet proxy is counted) or by attending the meeting and voting in person (as described above). Attending the meeting will not revoke your proxy unless you specifically request it.

Q:

What is InfoSpace’s voting recommendation?

A:

Our Board of Directors recommends that you vote your shares “FOR” the nominee to the Board and “FOR” each of the approval of the amendment to InfoSpace’s Restated 1996 Flexible Stock Incentive Plan and the ratification of Deloitte & Touche LLP as InfoSpace’s independent auditors for fiscal year 2002.

Q:

Where can I find the voting results of the meeting?

A:

The preliminary voting results will be announced at the meeting. The final results will be published in our quarterly report on Form 10-Q for the second quarter of fiscal year 2002.

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*

Less than 1%

(1)

Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person that are currently exercisable or will become exercisable within 60 days are deemed outstanding, while such shares are not deemed outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting and investment power with respect to all shares beneficially owned, subject to community property laws where applicable.

(2)

Represents 42,844,465 shares of common stock held in the name of Naveen and Anuradha Jain, 3,965,383 shares of common stock held by the Jain Family Irrevocable Trust, 7,280,882 shares of common stock held by Naveen Jain GRAT No. 1, 7,280,882 shares of common stock held by Anuradha Jain GRAT No. 1, 2,740,666 shares subject to options exercisable by Naveen Jain within 60 days of March 31, 2002,

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and 114,813 shares subject to options exercisable by Anuradha Jain within 60 days of March 31, 2002. Anuradha Jain is Mr. Jain’s spouse.

(3)

Includes 13,750,208 shares of common stock issuable upon exercise of warrants currently exercisable and 115,000 shares of common stock beneficially owned by Rufus W. Lumry, III. Mr. Lumry is the principal stockholder, sole director and President of Acorn Ventures, Inc., the sole member of Acorn Ventures-IS, LLC.

(4)

Includes 823,124 shares of common stock subject to options exercisable within 60 days of March 31, 2002.

(5)

Includes 958,334 shares of common stock subject to options exercisable within 60 days of March 31, 2002.

(6)

Includes 125,000 shares of common stock subject to options exercisable within 60 days of March 31, 2002, and 92,806 shares of common stock held by Clear Fir Partners LP. Mr. Cunningham is the President of Clear Fir Partners, LP.

(7)

Includes 322,620 shares of common stock subject to options exercisable within 60 days of March 31, 2002.

(8)

Includes 330,703 shares of common stock subject to options exercisable within 60 days of March 31, 2002.

(9)

Includes 115,000 shares of common stock subject to options exercisable within 60 days of March 31, 2002, and 19,545,518 shares beneficially owned by Acorn Ventures-IS, LLC. See note (3) above.

(10)

Consists of shares of common stock subject to options exercisable within 60 days of March 31, 2002.

(11)

Includes 19,328,906 shares of common stock subject to options and warrants exercisable within 60 days of March 31, 2002.

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(1)

Member of the Compensation Committee.

(2)

Member of the Audit Committee.

(1)

Member of the Audit Committee.

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•

Exercise Price.    The Plan Administrator has the discretion to determine the exercise price of options to purchase shares of our common stock, except that the exercise price of an incentive stock option or a nonstatutory stock option that is intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code may not be less than 100% of the fair market value of the shares subject to the option on the date of grant. (In the case of an incentive stock option granted to a 10% shareholder, the exercise price of an incentive stock option must be at least 110% of the fair market value of the shares subject to the option at the time of grant.) For purposes of the 1996 Plan, the “fair market value” of a share of our common stock generally means the closing sale price for the stock as quoted on the Nasdaq National Market for the day in question.

•

Value Limitation.    The aggregate fair market value (determined at the time of grant) of all shares of common stock subject to an optionee’s incentive stock option that are exercisable for the first time during any calendar year may not exceed $100,000. In the event the optionee holds two or more such options that become exercisable for the first time in the same calendar year, such limitation will be applied on the basis of the order in which such options are granted.

•

Form of Consideration.    The consideration to be paid for the shares of common stock issued upon exercise of an option shall be cash, certified check, bank draft, or postal or express money order payable to InfoSpace. However, the Plan Administrator, in its sole discretion, may permit an optionee to pay the exercise price in whole or in part by tendering other shares of our common stock meeting certain criteria, a promissory note, or any combination thereof. The Plan Administrator, in its sole discretion, also may authorize the surrender by an optionee of all or part of an unexercised option and authorize a payment in consideration thereof of an amount equal to the difference between the aggregate fair market value of the stock subject to the option and the aggregate exercise price of such stock.

•

Exercise and Term of Options.    Each stock option agreement will specify the term of the option and the exercisability of the option. The terms of such vesting are determined by the Plan Administrator in its discretion. Options granted under the 1996 Plan generally have a ten-year term (or, in the case of an incentive stock option granted to a 10% shareholder, a five-year term) and generally become exercisable over four years at a rate of one-fourth of the shares subject to the options at the end of twelve months from the date of grant and one forty-eighth of the shares every month thereafter, subject to the optionee’s continuation as a service provider. During 2001, however, we made a number of grants that vest over a two-year period, with 50% of the grant vesting ratably on a monthly basis for the first 24 months, and the remaining 50% vesting at the end of the two-year period. An option is exercised by giving written notice of exercise to InfoSpace and by tendering full payment of the exercise price and any applicable withholding taxes to us. No option may be exercised after the expiration of its term.

•

Termination of Employment.    The Plan Administrator will establish and set forth in each stock option agreement whether the option will continue to be exercisable, and the terms and conditions of such exercise, if the optionee ceases to be employed by, or to provide services to, InfoSpace or an affiliate of ours, which provisions may be waived or modified by the Plan Administrator at any time.

•

Nontransferability of Options.    Each option granted pursuant to the 1996 Plan generally is not transferable other than by will or the laws of descent and distribution, and may be exercised during the optionee’s lifetime only by the optionee.

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•

Other Provisions.    A stock option agreement may contain other terms, provisions and conditions not inconsistent with the 1996 Plan as may be determined by the Plan Administrator.

(i)

a merger or consolidation in which InfoSpace is not the surviving entity, except for (1) a transaction the principal purpose of which is to change the state of our incorporation, or (2) a transaction in which

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our stockholders immediately prior to such merger or consolidation hold (by virtue of securities received in exchange for their InfoSpace shares) securities of the surviving entity representing more than fifty percent (50%) of the total voting power of such entity immediately after such transaction;

(ii)

the sale, transfer or other disposition of all or substantially all of the assets of InfoSpace unless our stockholders immediately prior to such sale, transfer or other disposition hold (by virtue of securities received in exchange for their InfoSpace shares) securities of the purchaser or other transferee representing more than fifty percent (50%) of the total voting power of such entity immediately after such transaction; or

(iii)

any reverse merger in which InfoSpace is the surviving entity but in which our stockholders immediately prior to such merger do not hold (by virtue of their InfoSpace shares held immediately prior to such transaction) securities of InfoSpace representing more than fifty percent (50%) of the total voting power of InfoSpace immediately after such transaction.

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(1)

Based on $2.05 per share, the closing price for the Company’s common stock on December 31, 2001, as reported on the Nasdaq National Market.

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(i)

the fair market value of the shares at the date of the option exercise, or

(ii)

the sale price of the shares.

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•

Audit-Related Fees:  The aggregate fees for audit-related services rendered by Deloitte & Touche for matters such as consultation on and consents related to SEC filings and registration statements, audits of employee benefit plans, statutory audits required by the Company’s foreign subsidiaries, consultation on accounting standards or transactions and consulting on security controls, were approximately $286,000.

•

Non-Audit Related Fees:  The aggregate fees for all other services were approximately $595,000 and related entirely to professional services rendered in the areas of tax planning and tax compliance.

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•

discussed with the Company’s independent auditors the overall scope and plans for their audits;

•

met and held discussions with the independent auditors, both with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting;

•

reviewed and discussed the audited financial statements with management of the Company and with the Company’s independent auditors, including discussion of the quality, not just acceptability, of the application of accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements;

•

discussed with the auditors the matters required to be discussed by SAS 61 (“Communications with Audit Committees”); and

•

discussed with the auditors their independence and have received the written disclosures and letter required by Independence Standards Board Standard No. 1 (“Independence Discussions with Audit Committees”).

Me

mbers of the Audit Committee:

Wi

lliam D. Savoy

Le

wis M. Taffer

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(1)

Consists of $6,769 for the distribution to employees of InfoSpace’s contribution to the Venture Fund prior to dissolution. All eligible employees shared equally in this distribution.

(2)

Consists of an award to Mr. Jain in connection with patent filings.

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(1)

Based on a total of 50,655,134 option shares granted to employees during 2001.

(2)

Options were granted at an exercise price equal to the fair market value of our common stock at the time of the grant.

(3)

The dollar amounts under these columns are the result of calculations at the 5% and 10% rates required by applicable regulations of the Securities and Exchange Commission and are therefore not intended to forecast possible future appreciation, if any, of the price of our common stock. Assumes all options are exercised at the end of their respective 10-year terms. Actual gains, if any, on stock option exercises depend on the future performance of the common stock and overall stock market conditions, as well as the option holders’ continued employment through the vesting period. The amounts reflected in this table may not be achieved.

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(1)

Represents the aggregate fair market value on the respective dates of exercise of the shares of common stock received on exercise of the options, less the aggregate exercise price of the options.

(2)

These values represent the number of shares subject to in-the-money options multiplied by the difference between the closing price of our common stock on December 31, 2001 ($2.05 per share) and the exercise price of the options.

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Me

mber of the Compensation Committee:

Joh

n E. Cunningham, IV

•

Rand Rosenberg, our former Chief Financial Officer, filed a Form 4 relating to December 2000 trading activity, which was due on January 10, 2001, on January 19, 2001.

•

John Keister, our former Executive Vice President, Consumer Services, filed a Form 4 relating to January 2001 trading activity, which was due on February 12, 2001, on February 13, 2001.

•

Rufus W. Lumry, III, a director, filed a Form 4 relating to January 2001 trading activity, which was due on February 12, 2001, on February 13, 2001.

•

Russell C. Horowitz, our former President and Chief Operating Officer, filed a Form 4 relating to January 2001 trading activity, which was due on February 12, 2001, on February 13, 2001.

•

Prakash Kondepudi, Executive Vice President, Merchant, filed a Form 3 relating to his initial holdings, which was due on February 19, 2001 on February 20, 2001

•

John K. Arnold, our Senior Vice President, Strategic Accounts, filed a Form 3 relating to his initial holdings, which was due on July 30, 2001, on August 10, 2001.

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•

On June 13, 2000, Go2Net acquired 1,624,959 shares of preferred stock of imandi.com inc. valued at $5.0 million. Vulcan Ventures owns approximately an 11% equity interest in imandi. On May 26, 2000, Go2Net entered into an advertising, marketing and distribution agreement with imandi. Go2Net recognized revenues of $1.0 million for the year ended December 31, 2000 under this agreement. The

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•

On June 29, 2000, Go2Net acquired 1,623,377 shares of preferred stock of Sandbox.com, Inc. valued at $10.0 million. The investment valuation price was determined by prices paid by third-party investors in the round of financing completed just prior to the Go2Net investment. At the same time, Go2Net entered into a strategic alliance agreement with Sandbox.com to distribute and market certain content. Vulcan Ventures was a minority shareholder of Sandbox.com at the time of the Go2Net investment. InfoSpace recognized revenue of $845,000 in 2001.

•

On February 29, 2000, Go2Net acquired 3,086,095 shares of preferred stock of AskMe Corporation and received fully vested warrants to acquire an additional 202,000 shares of common stock. Vulcan Ventures was a minority shareholder of AskMe at the time of the Go2Net investment. At the same time, Go2Net entered into a marketing and distribution agreement with AskMe. In 2001, InfoSpace received 1,543,048 shares of preferred stock in AskMe for payment of services provided by InfoSpace and for termination of the agreement between Go2Net and AskMe. InfoSpace recognized $3.7 million of revenue in 2001 for these services.

•

In July 1999, Go2Net acquired 896,057 shares of common stock of CommTouch Software, LTD. and received warrants to acquire an additional 1,136,000 shares of common stock. In conjunction with the equity investment, Go2Net received one seat on the CommTouch board of directors. At the same time, Go2Net entered into a distribution and marketing agreement with CommTouch. Vulcan Ventures was a minority shareholder of CommTouch at the time of the Go2Net investment. InfoSpace recognized $3.0 million of revenue in 2001 from the amortization of deferred revenue from these warrants. Although InfoSpace has the rights to one board seat, that seat is presently vacant and the Company does not presently intend to appoint anyone to that seat.

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By

Order of the Board of Directors,

Joh

n M. Hall

Senior Vice President, General Counsel and Secretary

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•

Review and recommend to the directors the independent auditors to be retained to audit the financial statement of the corporation and its divisions and subsidiaries. In so doing, the committee will request from the auditors a written affirmation that the auditing firm is in fact independent and discuss with the auditors any relationship that may impact the auditor’s independence.

•

Meet with the financial management of the corporation to review the scope of the proposed audit for the current year and the audit procedures to be utilized, and at the conclusion thereof receiving and reviewing the audit reports, including any comments or recommendations of the independent auditors.

•

Provide sufficient opportunity for the independent auditors to meet with the members of the audit committee without members of management present. Among the items to be discussed in these meetings are the independent auditors’ evaluation of the corporation’s financial and accounting personnel, and the cooperation the independent auditors received during the course of the audit.

•

Review with the independent auditors and the financial and accounting personnel, the adequacy and effectiveness of the accounting and financial controls of the corporation, and elicit any recommendations for the improvement of such internal control procedures or particular areas where new or more detailed controls or procedures are desirable. Particular emphasis should be given to the adequacy of such internal controls to expose any payments, transactions, or procedures that might be deemed illegal or otherwise improper.

•

Review the audited financial statements and discuss them with management and the independent auditors. These discussions shall include consideration of the quality of the Company’s accounting

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•

Review the financial statements contained in the annual report to shareholders and in the Form 10-K with management and the independent auditors to determine that the independent auditors are satisfied with the disclosure and content of the financial statements to be presented to the shareholders and Form 10-K to be filed with the SEC.

•

Review with management and the independent auditors the quarterly financial information and press release prior to the company’s filing of Form 10-Q and quarterly earnings announcement.

•

Discuss with management the status of pending litigation, taxation matters and other areas of oversight to the legal and compliance areas as may be appropriate.

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1.

Establishment, Purpose, and Definitions.

(a)

There is hereby adopted the Restated 1996 Flexible Stock Incentive Plan (the “Plan”) of InfoSpace.com, Inc., a Delaware corporation (the “Company”).

(b)

The purpose of the Plan is to provide a means whereby eligible individuals (as defined in paragraph 4, below) can acquire Common Stock of the Company (the “Stock”). The Plan provides employees (including officers and directors who are employees) of the Company and of its Affiliates an opportunity to purchase shares of Stock pursuant to options which may qualify as incentive stock options (referred to as “incentive stock options”) under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and employees, officers, directors, independent contractors, and consultants of the Company and of its Affiliates an opportunity to purchase shares of Stock pursuant to options which are not described in Section 422 or 423 of the Code (referred to as “nonqualified stock options”). The Plan also provides for the sale or bonus of Stock to eligible individuals in connection with the performance of services for the Company or its Affiliates. Finally, the Plan authorizes the grant of stock appreciation rights (“SARs”), either separately or in tandem with stock options, entitling holders to cash compensation measured by appreciation in the value of the Stock.

(c)

The term “Affiliates” as used in the Plan means parent or subsidiary corporations, as defined in Sections 424(e) and (f) of the Code (but substituting “the Company” for “employer corporation”), including parents or subsidiaries which become such after adoption of the Plan.

2.

Administration of the Plan.

(a)

The Plan shall be administered by the Board of Directors of the Company (the “Board”) or a committee or committees (which term includes subcommittees) appointed by, and consisting of one or more members of, the Board (the “Plan Administrator”). If and so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in selecting the Plan Administrator and the membership of any committee acting as Plan Administrator, with respect to any persons subject or likely to become subject to Section 16 of the Exchange Act, the provisions regarding (i) “outside directors” as contemplated by Section 162(m) of the Code and (ii) “nonemployee directors” as contemplated by Rule 16b-3 under the Exchange Act. The Board may delegate the responsibility for administering the Plan with respect to designated classes of eligible Participants to different committees consisting of one or more members of the Board, subject to such limitations as the Board or the Plan Administrator deems appropriate. Committee members shall serve for such term as the Board may determine, subject to removal by the Board at any time.

(b)

The Plan Administrator shall determine which eligible individuals (as defined in paragraph 4, below) shall be granted options under the Plan, the timing of such grants, the terms thereof (including any restrictions on the Stock), and the number of shares subject to such options.

(c)

The Plan Administrator may amend the terms of any outstanding option granted under this Plan, but any amendment which would adversely affect the Optionee’s rights under an outstanding option shall not be made without the Optionee’s written consent. The Plan Administrator may, with the Optionee’s written consent, cancel any outstanding stock option or accept any outstanding stock option in exchange for a new option. Notwithstanding the foregoing, any change or adjustment to an incentive stock option shall not, without the Optionee’s written consent, be made in a manner so as to constitute

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a “modification” that would cause such incentive stock option to fail to continue to qualify as an incentive stock option.

(d)

The Plan Administrator shall also determine which eligible individuals (as defined in paragraph 4, below) shall be issued Stock or SARs under the Plan, the timing of such grants, the terms thereof (including any restrictions), and the number of shares or SARs to be granted. The Stock shall be issued for such consideration (if any) as the Plan Administrator deems appropriate. Stock issued subject to restrictions shall be evidenced by a written agreement (the “Restricted Stock Purchase Agreement” or the “Restricted Stock Bonus Agreement”). The Plan Administrator may amend any Restricted Stock Purchase Agreement or Restricted Stock Bonus Agreement, but any amendment which would adversely affect the stockholder’s rights to the Stock shall not be made without his or her written consent.

(e)

The Plan Administrator shall have the sole authority, in its absolute discretion to adopt, amend, and rescind such rules and regulations as, in its opinion, may be advisable for the administration of the Plan, to construe and interpret the Plan, the rules and the regulations, and the instruments evidencing options or Stock granted under the Plan and to make all other determinations deemed necessary or advisable for the administration of the Plan. All decisions, determinations, and interpretations of the Plan Administrator shall be binding on all participants.

3.

Stock Subject to the Plan.

(a)

An aggregate of not more than 53,967,866 shares of Stock shall be available for the grant of stock options or the issuance of Stock under the Plan plus an annual increase to be added on the first day of the Company’s fiscal year beginning in 2002 equal to the lesser of (i) five percent (5%) of the Company’s outstanding shares of Stock on the last day of the preceding fiscal year, and (ii) a lesser amount determined by the Board of Directors. If an option is surrendered (except surrender for shares of Stock) or for any other reason ceases to be exercisable in whole or in part, the shares which were subject to such option but as to which the option had not been exercised shall continue to be available under the Plan. Any Stock which is retained by the Company upon exercise of an option in order to satisfy the exercise price for such option or any withholding taxes due with respect to such option exercise shall be treated as issued to the Optionee and will thereafter not be available under the Plan.

(b)

If there is any change in the Stock subject to the Plan, an Option Agreement, a Restricted Stock Purchase Agreement, a Restricted Stock Bonus Agreement, or a SAR Agreement through merger, consolidation, reorganization, recapitalization, reincorporation, stock split, stock dividend, or other change in the capital structure of the Company, appropriate adjustments shall be made by the Plan Administrator in order to preserve but not to increase the benefits to the individual, including adjustments to the aggregate number, kind and price per share of shares subject to the Plan, an Option Agreement, a Restricted Stock Purchase Agreement, a Restricted Stock Bonus Agreement, or a SAR Agreement.

4.

Eligible Individuals.    Individuals who shall be eligible to have granted to them the options, Stock or SARs provided for by the Plan shall be such employees, officers, directors, independent contractors and consultants of the Company or an Affiliate as the Plan Administrator, in its discretion, shall designate from time to time. Notwithstanding the foregoing, only employees of the Company or an Affiliate (including officers and directors who are bona fide employees) shall be eligible to receive incentive stock options.

5.

The Option Price.

(a)

The exercise price of the Stock covered by each incentive stock option shall be not less than the per share fair market value of such Stock on the date the option is granted. The exercise price of the Stock

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covered by each nonqualified stock option shall be as determined by the Plan Administrator. In the case of a nonqualified stock option intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the per share exercise price of the Stock shall be no less than 100% of the fair market value per share of the Stock on the date of grant. Notwithstanding the foregoing, in the case of an incentive stock option granted to a person possessing more than ten percent of the combined voting power of the Company or an Affiliate, the exercise price shall be not less than 110 percent of the fair market value of the Stock on the date the option is granted. The exercise price of an option shall be subject to adjustment to the extent provided in paragraph 3(b), above.

(b)

The fair market value shall be as established in good faith by the Plan Administrator or (i) if the Stock is listed on the Nasdaq National Market, the fair market value shall be the closing selling price for the stock as reported by the Nasdaq National Market for a single day or (ii) if the Stock is listed on the New York Stock Exchange or the American Stock Exchange, the fair market value shall be the closing selling price for the Stock as such price is officially quoted in the composite tape of transactions on such exchange for a single trading day. If there is no such reported price for the Stock for the date in question, then such price on the last preceding date for which such price exists shall be determinative of the fair market value.

6.

Terms and Conditions of Options.

(a)

Each option granted pursuant to the Plan will be evidenced by a written Stock Option Agreement executed by the Company and the person to whom such option is granted.

(b)

The Plan Administrator shall determine the term of each option granted under the Plan; provided, however, that the term of an incentive stock option shall not be for more than 10 years and that, in the case of an incentive stock option granted to a person possessing more than ten percent of the combined voting power of the Company or an Affiliate, the term shall be for no more than five years.

(c)

In the case of incentive stock options, the aggregate fair market value (determined as of the time such option is granted) of the Stock with respect to which incentive stock options are exercisable for the first time by an eligible employee in any calendar year (under this Plan and any other plans of the Company or its Affiliates) shall not exceed $100,000. In the event the Optionee holds two or more such options that become exercisable for the first time in the same calendar year, such limitation shall be applied on the basis of the order in which such options are granted.

(d)

The Stock Option Agreement may contain such other terms, provisions and conditions not inconsistent with this Plan as may be determined by the Plan Administrator. If an option, or any part thereof is intended to qualify as an incentive stock option, the Stock Option Agreement shall contain those terms and conditions which are necessary to so qualify it.

(e)

The following limitations shall apply to grants of stock options:

(i)

No individual shall be granted, in any fiscal year of the Company, stock options to purchase more than 12,000,000 shares of Stock.

(ii)

In connection with his or her initial service, an individual may be granted stock options to purchase up to an additional 12,000,000 shares of Stock which shall not count against the limit set forth in subsection (i) above.

(iii)

The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization.

(iv)

If a stock option is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 15), the cancelled stock option

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will be counted against the limits set forth in subsections (i) and (ii) above. For this purpose, if the exercise price of a stock option is reduced, the transaction will be treated as a cancellation of the stock option and the grant of a new stock option.

(a)

Each sale or grant of stock pursuant to the Plan will be evidenced by a written Restricted Stock Purchase Agreement or Restricted Stock Bonus Agreement executed by the Company and the person to whom such stock is sold or granted.

(b)

The Restricted Stock Purchase Agreement or Restricted Stock Bonus Agreement may contain such other terms, provisions and conditions consistent with this Plan as may be determined by the Plan Administrator, including not by way of limitation, restrictions on transfer, forfeiture provisions, repurchase provisions and vesting provisions. To the extent required by applicable law, any right of the Company to repurchase stock granted pursuant to a restricted stock purchase or restricted stock bonus at the original purchase price, if the right is assignable, the assignee must pay the Company upon assignment of the right cash equal to the difference between the original price and fair value if the original purchase price is less than fair value.

(c)

The purchase price of Stock sold hereunder pursuant to a Restricted Stock Purchase Agreement shall be the price determined by the Plan Administrator on the date the right to purchase Stock is granted; provided, however that (i) such price shall not be less than 85% of the per share fair market value of such Stock on the date the right to purchase Stock is granted and (ii) to the extent required by applicable law, in the case of any person who owns Company stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, such price shall be 100% of the per share fair market value of such Stock at the time the right to purchase Stock is granted, or at the time the purchase is consummated.

8.

Terms and Conditions of SARs.    The Plan Administrator may, under such terms and conditions as it deems appropriate, authorize the issuance of SARs evidenced by a written SAR agreement (which, in the case of tandem options, may be part of the option agreement to which the SAR relates) executed by the Company and the person to whom such SAR is granted. The SAR agreement may contain such terms, provisions and conditions consistent with this Plan as may be determined by the Plan Administrator.

9.

Use of Proceeds.    Cash proceeds realized from the sale of Stock under the Plan shall constitute general funds of the Company.

10.

Amendment, Suspension, or Termination of the Plan.

(a)

The Board may at any time amend, suspend or terminate the Plan as it deems advisable; provided that such amendment, suspension or termination complies with all applicable requirements of state and federal law, including any applicable requirement that the Plan or an amendment to the Plan be approved by the Company’s stockholders, and provided further that, except as provided in paragraph 3(b), above, the Board shall in no event amend the Plan in the following respects without the consent of stockholders then sufficient to approve the Plan in the first instance:

(i)

To increase the maximum number of shares subject to incentive stock options issued under the Plan; or

(ii)

To change the designation or class of persons eligible to receive incentive stock options under the Plan.

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(b)

No option may be granted nor any Stock issued under the Plan during any suspension or after the termination of the Plan, and no amendment, suspension or termination of the Plan shall, without the affected individual’s consent, alter or impair any rights or obligations under any option previously granted under the Plan. The Plan shall terminate with respect to the grant of incentive stock options on April 10, 2006, unless previously terminated by the Board pursuant to this paragraph 10.

11.

The Plan Administrator shall establish and set forth in each instrument that evidences an option whether the option will continue to be exercisable, and the terms and conditions of such exercise, if an Optionee ceases to be employed by, or to provide services to, the Company or an Affiliate, which provisions may be waived or modified by the Plan Administrator at any time.

12.

Assignability.    Each option granted pursuant to this Plan shall, during Optionee’s lifetime, be exercisable only by him, and the option shall not be transferable by Optionee by operation of law or otherwise other than by will or the laws of descent and distribution. Notwithstanding the foregoing, and to the extent permitted by Section 422 of the Code, the Plan Administrator, in its sole discretion, may permit such transfer, assignment and exercisability and may permit an Optionee to designate a beneficiary who may exercise the option after the Optionee’s death; provided, however, that any option so transferred or assigned shall be subject to all the same terms and conditions contained in the instrument evidencing the option. Stock subject to a Restricted Stock Purchase Agreement or a Restricted Stock Bonus Agreement shall be transferable only as provided in such Agreement.

13.

Payment Upon Exercise of Options.

(a)

Payment of the purchase price upon exercise of any option granted under this Plan shall be made in cash, a certified check, bank draft, postal or express money order payable to the order of the Company, provided, however, that the Plan Administrator, in its sole discretion, may permit an Optionee to pay the option price in whole or in part (i) tendering (either actually or, if and so long as the Stock is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shares of Stock owned by the Optionee for at least six months (or any shorter period necessary to avoid a charge to the Company’s earnings for financial reporting purposes) on the day prior to the exercise date equal to the aggregate option exercise price; (ii) if and so long as the stock is registered under Section 12(b) or 12(g) of the Exchange Act, by delivery on a form prescribed by the Plan Administrator of an irrevocable direction to a securities broker approved by the Plan Administrator to sell shares and deliver all or a portion of the proceeds to the Company in payment for the Stock; (ii) by delivery of the Optionee’s promissory note with such full recourse, interest, security, and redemption provisions as the Plan Administrator in its discretion determines appropriate; or (iii) in any combination of the foregoing. The amount of any promissory note delivered in connection with an incentive stock option shall bear interest at a rate specified by the Plan Administrator but in no case less than the rate required to avoid imputation of interest (taking into account any exceptions to the imputed interest rules) for federal income tax purposes In addition, the Plan Administrator, in its sole discretion, may authorize the surrender by an Optionee of all or part of an unexercised option and authorize a payment in consideration thereof of an amount equal to the difference between the aggregate fair market value of the Stock subject to such option and the aggregate option price of such Stock. In the Plan Administrator’s discretion, such payment may be made in cash, shares of Stock with a fair market value on the date of surrender equal to the payment amount, or some combination thereof. The purchase price for shares purchased under an option may also be paid by such other consideration as the Plan Administrator may permit.

(b)

In the event that the exercise price is satisfied by the Plan Administrator retaining from the shares of Stock otherwise to be issued to Optionee shares of Stock having a value equal to the exercise price, the Plan Administrator may issue Optionee an additional option, with terms identical to this option agreement, entitling Optionee to purchase additional Stock in an amount equal to the number of shares so retained.

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(a)

No Stock shall be granted or sold under the Plan to any participant, and no SAR may be exercised, until the participant has made arrangements acceptable to the Plan Administrator for the satisfaction of federal, state, and local income and social security tax withholding obligations, including without limitation obligations incident to the receipt of Stock under the Plan, the lapsing of restrictions applicable to such Stock, the failure to satisfy the conditions for treatment as incentive stock options under applicable tax law, or the receipt of cash payments. Upon exercise of a stock option or lapsing or restriction on stock issued under the Plan, the Company may satisfy its withholding obligations by withholding from the Optionee or requiring the stockholder to surrender shares of the Company’s Stock sufficient to satisfy federal, state, and local income and social security tax withholding obligations.

(b)

In the event that such withholding is satisfied by the Company or the Optionee’s employer retaining from the shares of Stock otherwise to be issued to Optionee shares of Stock having a value equal to such withholding tax, the Plan Administrator may issue Optionee an additional option, with terms identical to the option agreement under which the option was received, entitling Optionee to purchase additional Stock in an amount equal to the number of shares so retained.

(a)

For purposes of this Section 15, a “Corporate Transaction” shall include any of the following stockholder-approved transactions to which the Company is a party:

(i)

a merger or consolidation in which the Company is not the surviving entity, except for (1) a transaction the principal purpose of which is to change the state of the Company’s incorporation, or (2) a transaction in which the Company’s stockholders immediately prior to such merger or consolidation hold (by virtue of securities received in exchange for their shares in the Company) securities of the surviving entity representing more than fifty percent (50%) of the total voting power of such entity immediately after such transaction;

(ii)

the sale, transfer or other disposition of all or substantially all of the assets of the Company unless the Company’s stockholders immediately prior to such sale, transfer or other disposition hold (by virtue of securities received in exchange for their shares in the Company) securities of the purchaser or other transferee representing more than fifty percent (50%) of the total voting power of such entity immediately after such transaction; or

(iii)

any reverse merger in which the Company is the surviving entity but in which the Company’s stockholders immediately prior to such merger do not hold (by virtue of their shares in the Company held immediately prior to such transaction) securities of the Company representing more than fifty percent (50%) of the total voting power of the Company immediately after such transaction.

(b)

In the event of any Corporate Transaction, any option or outstanding SAR shall terminate and any restricted stock shall be reconveyed to or repurchased by the Company immediately prior to the specified effective date of the Corporate Transaction; provided, however, that, to the extent permitted by applicable law and unless otherwise determined by the Plan Administrator in it discretion (and reflected in the applicable written agreement evidencing the grant of the award), any unvested option, SAR or any restricted stock shall vest and become exercisable as to 25% of the unvested shares, or become nonforfeitable as to 25% of the forfeitable shares, as applicable, immediately prior to the specified effective date of the Corporate Transaction. Notwithstanding the foregoing, options, SARs or restricted stock shall not terminate if, in connection with the Corporate Transaction, they are to be assumed or substituted by the successor corporation or its parent company. Unless otherwise determined by the Plan Administrator in its discretion (and reflected in the applicable written

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agreement evidencing the grant of the award), if options, SARs or restricted stock are not assumed or substituted by the successor corporation or its parent pursuant to options, SARs or restricted stock agreements providing substantially equal value and having substantially equivalent provisions as the options, SARs or restricted stock granted pursuant to this Plan, such options, SARs or restricted stock shall vest and become exercisable or nonforfeitable, as applicable, as to an additional 25% of the unvested shares or forfeitable shares, immediately prior to the specified effective date of the Corporation Transaction.

16.

Stockholder Approval.    This Plan shall only become effective with regard to incentive stock options upon its approval by a majority of the stockholders voting (in person or by proxy) at a stockholders’ meeting held within 12 months of the Board’s adoption of the Plan. The Plan Administrator may grant incentive stock options under the Plan prior to the stockholders’ meeting, but until stockholder approval of the Plan is obtained, no incentive stock option shall be exercisable.

17.

Information to Plan Participants.    The Company shall provide to each Plan participant, during any period for which said participant has one or more options or SARs or shares acquired pursuant to the Plan outstanding, copies of annual reports of the Company issued during said period.

18.

No Trust or Fund.    The Plan is intended to constitute an “unfunded” plan. Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Optionee, and no Optionee shall have any rights that are greater than those of a general unsecured creditor of the Company.

19.

Severability.    If any provision of the Plan or any option is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any option under any law deemed applicable by the Plan Administrator, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Plan Administrator’s determination, materially altering the intent of the Plan or the option, such provision shall be stricken as to such jurisdiction, person or option, and the remainder of the Plan and any such option shall remain in full force and effect.

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VOTE BY INTERNET—www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site. You will be prompted to enter your 12-digit Control Number which is located below to obtain your records and to create an electronic voting instruction form.

VOTE BY PHONE—1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call. You will be prompted to enter your 12-digit Control Number which is located below and then follow the simple instructions the Vote Voice provides you.

VOTE BY MAIL

Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to InfoSpace, Inc., c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.

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INFOSPACE, INC.

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