ZIPREALTY, INC RESTRICTED STOCK AWARD AGREEMENT
Exhibit 10.2
ZIPREALTY, INC
2004 EQUITY INCENTIVE PLAN
THIS RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”), dated September 13, 2007, is entered
into between ZipRealty, Inc., a Delaware corporation (the “Company”) and J. Xxxxxxx Xxxxxxxxx (the
“Employee”). Unless otherwise defined herein, the terms of this Agreement will have the same
meaning as defined in the ZipRealty, Inc. 2004 Equity Incentive Plan (the “Plan”). The Agreement
is entered into as follows:
WHEREAS, the Company has entered into an employment agreement with Employee on September 13,
2007 (“Employment Agreement”) and a change in control agreement with Employee on September 13, 2007
(“Change in Control Agreement”); and
WHEREAS, the employment of Employee is considered by the Company to be important for the
Company’s continued growth; and
WHEREAS, in order to induce Employee to remain with the Company and to assure his continued
commitment to the success of the Company, the Board of Directors of the Company (the “Board”) has
determined that Employee shall be granted a stock award (“Stock Award”) covering shares of the
Company’s common stock (the “Shares”), under the Company’s Plan and subject to the restrictions
stated below.
THEREFORE, the parties agree as follows:
1. Grant of Stock Award. Subject to the terms and conditions of this Agreement and the
Plan which is incorporated herein by reference, the Company hereby issues to Employee a Stock Award
covering 225,000 Shares and hereby agrees to issue such Shares to Employee.
2. Vesting Schedule. So long as Employee’s employment or service relationship with the
Company continues during the following vesting term, the interest of Employee in the Shares shall
vest as follows: 28,125 Shares subject to the Stock Award will vest six months after June 4, 2007
(the “Vesting Commencement Date”) and 28,125 Shares shall vest every six months after the Vesting
Commencement Date. Therefore, provided Employee has not experienced a termination of his
employment prior to the close of business on the fourth anniversary of the Vesting Commencement
Date, the interest of Employee in the Shares shall become fully vested on that date. Additional
vesting may apply under circumstances specified in the Change of Control Agreement.
3. Forfeiture. Upon the date Employee’s employment terminates for any reason, all Shares
of Stock received by Employee pursuant to this Agreement that have not vested under the terms of
the Agreement, together with any shares of Stock issued as a dividend or other distribution on, in
exchange for or upon the conversion of such unvested Stock (collectively, the “Subject Shares”),
will be forfeited to the extent that they have not vested on or prior to such date. This means
that the Restricted Shares will immediately revert to the Company with no further action required
by the Company or Employee. Employee will receive no payment for Restricted Shares that are
forfeited. The Company determines when Employee’s service terminates for this purpose.
4. Escrow of Shares.
(a) To ensure that Employee’s unvested Shares are delivered to the Company in the event of a
forfeiture described in Section 3, Employee agrees to promptly following the execution of this
Agreement, to deliver to and deposit with the escrow agent (the “Escrow Agent”) named in the Joint
Escrow Instructions attached as Exhibit A, the certificate(s) evidencing the unvested
Shares and an Assignment Separate from Certificate executed
by Employee (with date and number of shares in blank) in the form attached as Exhibit B.
The certificate(s) evidencing the unvested Shares and the Assignment Separate from Certificate
shall be delivered to the Escrow
Agent and held under the Joint Escrow Instructions, which shall be
delivered to the Escrow Agent promptly following the execution of this Agreement.
(b) Promptly following the date when the Shares have vested in full, the Company shall direct
the Escrow Agent to deliver to Employee a certificate or certificates representing the Shares.
5. Transfer Restrictions. Except as otherwise provided for in this Agreement and the Plan,
the Shares or rights granted hereunder may not be sold, pledged or otherwise transferred until the
Shares become vested and nonforfeitable in accordance with Sections 2 and 3.
6. Stockholder Rights. Employee shall be entitled to all of the rights and benefits
generally accorded to stockholders with respect to the Shares. All dividends on Shares that are
subject to any restrictions, including vesting, shall be subject to the same restrictions,
including those set forth in Sections 2 and 3, as the Shares on which the dividends were paid.
7. Taxes.
(a) Employee shall be liable for any and all taxes, including withholding taxes, arising out
of this grant or the vesting of Shares hereunder. In the event that the Company is required to
withhold taxes as a result of the grant or vesting of the Shares, or subsequent sale of the Shares,
Employee shall surrender a sufficient number of whole Shares or make a cash payment as necessary to
cover all applicable required withholding taxes and required social security contributions at the
time the Shares vest and the restrictions on the Shares lapse (or at such other time as required by
applicable laws), unless alternative procedures for such payment are established by the Company.
Employee will receive a cash refund for any fraction of a surrendered Share not necessary for
required withholding taxes and required social security contributions. To the extent that any
surrender of Shares or payment of cash or alternative procedure for such payment is insufficient,
Employee authorizes the Company, its affiliates and subsidiaries, which are qualified to deduct tax
at source, to deduct all applicable required withholding taxes and social security contributions
from Employee’s compensation. Employee agrees to pay any amounts that cannot be satisfied from
wages or other cash compensation, to the extent permitted by law.
(b) Employee understands that Section 83(a) of the Internal Revenue Code of 1986, as amended
(the “Code”), taxes as ordinary income the difference between the amount paid for the Shares and
the fair market value of the Shares as of the date any forfeiture restrictions on the Shares lapse.
In this context, “restrictions” mean the forfeiture obligation in the event of the Termination of
Employment of Employee as set forth in Section 7 of the Plan and the restriction on transferability
as set forth in Section 5 of this Agreement and in Section 7 of the Plan. Employee understands
that Employee may elect to be taxed at the time the Shares are issued, based on the value of the
Shares at the issuance date rather than when and as the forfeiture restrictions lapse (on the
vesting dates), by filing an election under Section 83(b) (an “83(b) Election”) of the Code with
the Internal Revenue Service within 30 days from the date of issuance. Employee
acknowledges that the foregoing is only a summary of the effect of United States federal income
taxation with respect to issuance and vesting of the Shares hereunder, and does not purport to be
complete. The Company has directed Employee to seek independent advice regarding the applicable
provisions of the Code, the income tax laws of any municipality, state or foreign country in which
Employee may reside, the tax consequences of Employee’s death, and the decision as to whether or
not to file an 83(b) Election (as well as appropriate advice and assistance with the actual filing
of any such 83(b) Election) in connection with the issuance of the Shares.
(c) Regardless of any action the Company takes with respect to any or all income tax, social
insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”),
Employee acknowledges and agrees that the ultimate liability for all Tax-Related Items legally due
by him is and remains Employee’s responsibility and that the Company (i) make no representations
nor undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of
this issuance of Shares, including the vesting of the Shares or the subsequent sale of the Shares;
and (ii) do not commit to structure the terms or any aspect of this issuance of Shares to reduce or
eliminate Employee’s liability for Tax-Related Items. Prior to the vesting of the
Shares, Employee shall pay the Company any amount of Tax-Related Items that the Company may be
required to withhold as a result of Employee’s receipt of the Stock Award or Employee’s receipt of
Shares that cannot be
2
satisfied by the means previously described. The Company may refuse to
deliver the Shares if Employee fails to comply with Employee’s obligations in connection with the
Tax-Related Items.
8. Acknowledgment and Waiver. By accepting this grant of a Stock Award, Employee
acknowledges and agrees that:
(a) the grant of Stock Awards is voluntary and occasional and does not create any contractual
or other right to receive future grants of Stock Awards or Shares, even if Stock Awards or Shares
have been granted repeatedly in the past;
(b) the grant of a Stock Award shall not create a right to further employment with the
Company, shall not create an employment agreement between Employee and the Company and shall not
interfere with the ability of the Company to terminate Employee’s employment relationship at any
time with or without cause and it is expressly agreed and understood that employment is terminable
at the will of either party, insofar as permitted by law;
(c) Stock Award grants, Shares and resulting benefits are an extraordinary item that does not
constitute compensation of any kind for services of any kind rendered to the Company, and is
outside the scope of Employee’s employment contract, if any; and Stock Award grants, Shares and
resulting benefits are not part of normal or expected compensation or salary for any purposes,
including, but not limited to calculating any severance, resignation, termination, redundancy, end
of service payments, bonuses, long-service awards, pension or retirement benefits or similar
payments insofar as permitted by law;
(d) in consideration of this grant of a Stock Award, no claim or entitlement to compensation
or damages shall arise from termination of this Stock Award or diminution in value of the Shares
resulting from termination of employment by the Company (for any reason whatsoever and whether or
not in breach of local labor laws) and Employee irrevocably releases the Company from any such
claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of
competent jurisdiction to have arisen, then, by accepting the terms of this Agreement, Employee
shall be deemed irrevocably to have waived any entitlement to pursue such claim; and
(e) notwithstanding any terms or conditions of the Plan to the contrary, in the event of
involuntary termination of employment (whether or not in breach of local labor laws), Employee’s
right to receive benefits under this Agreement, if any, will terminate effective as of the date
that Employee is no longer actively employed and will not be extended by any notice period mandated
under local law (e.g., active employment would not include a period of “garden leave” or similar
period pursuant to local law); furthermore, in the event of involuntary termination of employment
(whether or not in breach of local labor laws), Employee’s right to receive benefits under this
Agreement after termination of employment, if any, will be measured by the date of termination of
Employee’s active employment and will not be extended by any notice period mandated under local
law.
9. Conditions Upon Issuance of Shares. Notwithstanding any other provision of this
Agreement, the Company shall not be obligated, and shall have no liability for failure, to issue or
deliver any Shares under this Agreement unless such issuance or delivery would comply with
applicable laws, with such compliance determined by the Company in consultation with its legal
counsel.
10. Miscellaneous.
(a) The Company shall not be required to treat as the owner of Shares, and associated benefits
hereunder, any transferee to whom such Shares or benefits shall have been so transferred in
violation of this Agreement.
(b) The parties agree to execute such further instruments and to take such action as may
reasonably be necessary to carry out the intent of this Agreement.
(c) Any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon delivery to Employee at Employee’s address then on file with the Company.
3
(d) The Plan is incorporated herein by reference. The Plan and this Agreement constitute the
entire agreement of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Employee with respect to the
subject matter hereof, and may not be modified adversely to Employee’s interest except by means of
a writing signed by the Company and Employee. This Agreement is governed by the laws of the state
of Delaware.
(e) The provisions of this Agreement are severable and if any one or more provisions are
determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions
shall nevertheless be binding and enforceable.
[Signature page follows]
| Accepted by Employee: | ZIPREALTY, INC. | ||||
| /s/ J. Xxxxxxx Xxxxxxxxx | By | /s/ Xxxxx X. Xxxxxxxxx | |||
| J. Xxxxxxx Xxxxxxxxx | Xxxxx X. Xxxxxxxxx | ||||
| Vice President, General Counsel & Secretary | |||||
RETAIN THIS AGREEMENT FOR YOUR RECORDS
4
EXHIBIT A
Joint Escrow Instructions
September 13, 2007
Xxxxx X. Xxxxxxxxx
Vice President, General Counsel & Secretary
ZipRealty, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Vice President, General Counsel & Secretary
ZipRealty, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Dear Sir or Madam:
As Escrow Agent for ZipRealty, Inc. (the “Company”), and J. Xxxxxxx Xxxxxxxxx (the “Employee”), you
are authorized and directed to hold the Assignment Separate from Certificate form(s) executed by
Employee and the certificate(s) of stock representing Employee’s unvested shares transferred in
accordance with the terms of the restricted share agreement (the “Agreement”) entered into between
the Company and Employee, in accordance with the following instructions:
1. In the event of a forfeiture described in Section 3 of the Agreement, Employee and the
Company hereby irrevocably authorize and direct you to effect the contemplated forfeiture, and to
promptly deliver the stock certificates.
2. Promptly following a forfeiture describe in Section 3 of the Agreement, you are directed
(a) to date the Assignment Separate from Certificate form(s) necessary for the transfer in
question, (b) to fill in the number of shares being transferred, and (c) to deliver the form(s),
together with the certificate or certificates evidencing the shares to be transferred, to the
Company.
3. Employee irrevocably authorizes the Company to deposit with you any certificates evidencing
shares to be held by you under this letter and any additions and substitutions to the shares as
defined in the Agreement. Employee irrevocably appoints you as his or her attorney-in-fact and
agent for the term of this escrow to execute, with respect to the shares of stock, all documents
necessary or appropriate to make such securities negotiable and to complete any transaction
contemplated by these Joint Escrow Instructions. Subject to the provisions of this Section 3,
Employee shall exercise all rights and privileges, including but not limited to, the right to vote
and to receive dividends (if any), of a stockholder of the Company while the shares are held by
you.
4. In accordance with the terms of Section 4(b) of the Agreement, you may deliver to Employee
a certificate or certificates representing shares that are no longer subject to the forfeiture
restrictions described in Section 3 of the Agreement.
5. This escrow shall terminate upon the release of all shares held under the terms and
provisions hereof.
6. If at the time of termination of this escrow you should have in your possession any
documents, securities or other property belonging to Employee, you shall deliver them to Employee
and shall be discharged from all further obligations under these Joint Escrow Instructions.
7. Your duties under these Joint Escrow Instructions may be altered, amended, modified or
revoked only by a writing signed by all of the parties.
5
8. You shall be obligated to perform the duties described in these Joint Escrow Instructions
and shall be protected in relying or refraining from acting on any instrument reasonably believed
by you to be genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act or omission as Escrow Agent or as attorney-in-fact of
Employee while acting in good faith and in the exercise of your own good judgment, and any act or
omission by you pursuant to the advice of your own attorneys shall be conclusive evidence of such
good faith.
9. You are expressly authorized to disregard any and all warnings given by any of the parties
hereto or by any other person or corporation, excepting only orders or process of courts of law,
and are expressly authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree of any court, you shall not be
liable to any of the parties under these Joint Escrow Instructions or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order, judgment or decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without
jurisdiction.
10. You shall not be liable in any respect on account of the identity, authority or rights of
the parties executing or delivering or purporting to execute or deliver the Agreement or any
documents or papers deposited or called for under these Joint Escrow Instructions.
11. You shall not be liable for the outlawing of any rights under any statute of limitations
with respect to these Joint Escrow Instructions or any documents deposited with you.
12. You shall be entitled to employ such legal counsel and other experts as you may deem
necessary properly to advise you in connection with your obligations under these Joint Escrow
Instructions and may rely upon the advice of such counsel.
13. Your responsibilities as Escrow Agent under these Joint Escrow Instructions shall
terminate if you shall cease to be employed by the Company or if you shall resign by written notice
to each party. In the event of any such termination, the Company shall appoint any officer of the
Company as successor Escrow Agent.
14. If you reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations under these Joint Escrow Instructions, the parties shall furnish
such instruments.
15. It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities held by you under these Joint Escrow
Instructions, you are authorized and directed to retain in your possession without liability to
anyone all or any part of the securities until the dispute is settled either by mutual written
agreement of the parties or by a final order, decree or judgment of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been perfected. You are under
no duty whatsoever to institute or defend against any such proceedings.
16. Any notice required or permitted under these Joint Escrow Instructions shall be given in
writing and will be deemed effectively given upon personal delivery or upon deposit in the United
States Post Office, by registered or certified mail with postage and fees prepaid, addressed to
each of the other parties.
17. By signing these Joint Escrow Instructions, you become a party only for the purpose of
these Joint Escrow Instructions; you do not become a party to the Agreement.
18. This instrument shall be governed by and construed in accordance with the laws of the
State of Delaware.
6
19. This instrument shall be binding upon and inure to the benefit of the parties hereto and
their
respective successors and permitted assigns.
| Very truly yours, | |||||
| ZipRealty, Inc. | |||||
| By | /s/ Xxxxx Xxxxxxxxx | ||||
| Its | GENERAL COUNSEL | ||||
| ESCROW AGENT: | |||||
| /s/ Xxxxx X. Xxxxxxxxx | /s/ J. Xxxxxxx Xxxxxxxxx | ||||
| Xxxxx X. Xxxxxxxxx Vice President | J. Xxxxxxx Xxxxxxxxx | ||||
| General Counsel & Secretary | |||||
7
EXHIBIT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, J. Xxxxxxx Xxxxxxxxx sells, assigns and transfers to ZipRealty, Inc. (the
“Company”) or its assignee 225,000 shares of the Common Stock of the Company (the “Shares”),
standing in his or her name on the books of the Company represented by Certificate No. _________
and irrevocably constitutes and appoints Xxxxx X. Xxxxxxxxx as Attorney to transfer the Shares on
the books of the Company with full power of substitution in the premises.
Dated: 9/17 , 2007.
| J XXXXXXX XXXXXXXXX /s/ J. Xxxxxxx Xxxxxxxxx |
||||
| (Signature) |
||||
Spousal Consent (if applicable)
___________________ (Employee’s spouse) indicates by the execution of this Assignment his or her
consent to be bound by the terms herein as to his or her interests, whether as community property
or otherwise, if any, in the Shares.
| Printed Name | ||||
| Signature |
||||
INSTRUCTIONS: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE. THE
PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY TO ENFORCE THE FORFEITURE RESTRICTIONS SET
FORTH IN THE RESTRICTED SHARE AGREEMENT WITHOUT REQUIRING ADDITIONAL SIGNATURE
8
