ZipRealty Inc.
Exhibit 10.20(a)
J. XXXXXXX XXXXXXXXX EMPLOYMENT AGREEMENT
This Agreement is entered into this 13th day of September, 2007 by and between
ZipRealty Inc. (the “Company”), and J. Xxxxxxx Xxxxxxxxx (“Executive”).
1. Duties and Scope of Employment.
(a) Title; Board Membership. Effective June 4, 2007 (the “Effective Date”), Executive was
promoted to the position of President and CEO of the Company and in such position reports to the
Company’s Board of Directors (the “Board”). Upon the Effective Date, Executive was also appointed
to serve as a member of the Board. So long as Executive remains the President and CEO, the Board
agrees to nominate him as a member of the Board when Executive is up for Board election and
Executive agrees to serve in such capacity without additional compensation.
(b) Position and Duties. As Chief Executive Officer, Executive shall perform the duties,
responsibilities and authority customarily associated with such position as the Company’s most
senior executive officer, including responsibility for the overall management of the Company.
Executive agrees to the best of his ability and experience that he will loyally and conscientiously
perform all of his duties and obligations to the Company. During Executive’s employment, Executive
further agrees that he (i) will devote substantially all of his business time and attention to the
business of the Company; (ii) will not render commercial or professional services of any nature to
any person or organization, whether or not for compensation, without the prior written consent of
the Board which (subject to the Company’s Corporate Governance Guidelines as referred to below)
will not be unreasonably withheld; and (iii) will not directly or
indirectly engage or participate in any business or activity that is competitive in any manner with
the business of the Company. Nothing in this Agreement will prevent Executive from: (A) serving on
advisory boards or boards of charitable organizations, so long as such service does not unduly
interfere with the performance of Executive’s duties to the Company; or (B) serving on the board of
directors of a private company of which Executive is currently a member of and has disclosed
to the Company. Note however that the Company’s Corporate Govemance Guidelines provide
that no officer of the Company (including the Chief Executive Officer) will accept or seriously
discuss joining the board of any public or private for-profit company without first seeking the
permission of the Corporate Governance and Nominating Committee of the Company. While Executive is
an executive officer and director of the Company, the Company will assist Executive in satisfying
his reporting obligations under Section 16 of the Securities Exchange Act of 1934 (the “Exchange
Act”). The period of Executive’s employment under this Agreement is referred to herein as the
“Employment Term.”
2. At-Will Employment. The parties agree that Executive’s employment with the Company will be
“at-will” employment and may be terminated at any time with or without cause or notice subject to
the provisions set forth herein. Executive understands
and agrees that neither his job performance nor promotions, commendations, bonuses or the like
from the Company give rise to or in any way serve as the basis for modification, amendment, or
extension, by implication or otherwise, of his employment with the Company. Executive agrees to
resign from all positions he
holds with the Company, including, without limitation, his position as
a member of the Board, immediately following the termination of his employment if the Board so
requests.
3. Compensation.
(a) Base Salary. For all services to be rendered by the Executive pursuant to this Agreement,
the Company agrees to pay the Executive during the Employment Term a base salary (the “Base
Salary”) at an annual rate of not less than $350,000. The Base Salary shall be paid in accordance
with the Company’s regular payroll practices. The Company may review the Base Salary and make such
increases therein as the Board may approve.
(b) Bonus Eligibility. During the Employment Term, Executive shall be eligible to participate
in the Management Incentive Plan, or such other bonus programs as established by the Committee from
time to time. For the current fiscal year, Executive shall be eligible to receive a target cash
incentive bonus of up to eighty percent (80%) of his Base Salary as set forth in this Agreement
subject to the terms of the 2007 Management Incentive Plan.
4. Employee Benefits. During the Employment Term, the Executive shall be entitled to
participate in employee benefit plans or programs of the Company, if any, to the extent that his
position, tenure and other qualifications make him eligible to participate, subject to the rules
and regulations applicable thereto. The Company reserves the right to cancel or change the benefit
plans and programs it offers to its employees at any time.
5. Equity Awards.
(a) Stock Option Award. Subject to Executive’s execution of this Agreement, the Compensation
Committee of the Board (the “Committee”) will grant Executive on September 13, 2007, a stock option
(the “Option”) to purchase 300,000 shares of the Company’s Common Stock with a per share
exercise price equal to the closing price of a share of the Company’s common stock as reported
on the Nasdaq Global Stock Market on September 13, 2007. The Option shares will vest and become
exercisable at the rate of 25% of the total number of Option shares on the first anniversary of the
Vesting Commencement Date (which will be June 4, 2007, the Effective Date) and 1/48th of
the total number of Option shares on the first day of each month thereafter. Vesting will be
dependant on Executive’s continued and continuous service relationship
with the Company. The Option will be subject to the terms of the Stock Option Agreement
between Executive and the Company. Except in the context of a termination of Executive’s employment
for Cause, Executive will be able to exercise those Option shares that were vested on
Executive’s last day of service to the Company for 12 months following such last day.
(b) Restricted Share Grant. Subject to Executive’s execution of this Agreement, the Committee
will issue Executive on September 13, 2007, 225,000 shares of the Company’s Restricted Stock
(“Restricted Shares”). The Restricted Shares will be subject to vesting and forfeiture in the event
of Executive’s termination of employment or continued service prior to June 4, 2011. Such
forfeiture rights shall lapse at the rate of 28,125 shares every six months, beginning on the date
six months after June 4, 2007 (the “Vesting Commencement Date”) and continuing every six months
thereafter. Vesting will be dependant on Executive’s continued and continuous service relationship
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with the Company. The Restricted Shares will be subject to the terms of a Restricted Stock
Award Agreement between Executive and the Company.
(c) Subsequent Equity Awards. Subject to the discretion of the Company’s Board of Directors
and the Committee, Executive may be eligible to receive additional grants of stock options or other
equity awards from time to time in the future, on such terms and conditions as the Board or
Committee shall determine as of the date of any such award.
6. Severance.
(a) Involuntary Termination Not for Cause or Resignation for Good Reason. If Executive’s
employment with the Company terminates other than for “Cause” (as defined herein) or Executive
resigns for “Good Reason” as that term is defined herein, and Executive signs and does not revoke
the Company’s severance and release agreement, then Executive shall be entitled to receive
continuing payments of severance pay (less applicable withholding taxes) at a rate equal to his
Base Salary rate, as then in effect, for a period of six (6) months from the date of such
termination, to be paid in accordance with the Company’s normal payroll policies.
(b) Voluntary Termination; Termination for Cause. If Executive’s employment with the Company
terminates voluntarily by Executive without Good Reason or for Cause by the Company, then (i) all
vesting of any options to purchase shares of the Company’s common stock shall terminate immediately
and all payments of compensation by the Company to Executive hereunder will terminate immediately
(except as to amounts already earned), and (ii) Executive will only be eligible for severance
benefits in accordance with the Company’s established policies as then in effect.
(c) Cause. For all purposes under this Agreement, “Cause” shall mean (i) willful failure by
the Executive to substantially perform his duties hereunder (other than a failure resulting from
the Executive’s complete or partial incapacity due to physical or mental illness or impairment)
after receipt of a written warning and failure to cure any
such non-performance within ten (10) business days of receipt of such warning (ii) a willful
act by the Executive which constitutes gross misconduct and which is injurious to the Company,
(iii) a willful breach by the Executive of a material provision of this Agreement, or (iv) a
material and willful violation of a federal or state law or regulation applicable to the business
of the Company. No act, or failure to act, by the Executive shall be considered “willful” unless
committed without good faith without a reasonable belief that the act
or omission was
in the Company’s best interest. No compensation or benefits will be paid or provided to the
Executive under this Agreement on account of a termination for Cause, or for periods following the
date when such a termination of employment is effective. The Executive’s rights under the benefit
plans of the Company shall be determined under the provisions of those plans.
(d) Good Reason. For all purposes under this Agreement, “Good Reason” shall mean without the
Executive’s express written consent (i) a significant reduction of the Executive’s duties, position
or responsibilities; (ii) a significant reduction by the Company in the Base Salary of the
Executive as in effect immediately prior to such reduction; (iii) a material reduction by the
Company in the kind or level of employee benefits to which the Executive is entitled immediately
prior to such reduction with the result that the Executive’s overall benefits package is
significantly
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reduced; (iv) the relocation of the Executive to a facility or a location more than
50 miles from the Executive’s then present location; (v) a substantial reduction, without good
business reasons, of the facilities and perquisites (including office space and location) available
to the Executive immediately prior to such reduction; (vi) any material breach of this Agreement by
the Company; or (vii) any failure or refusal of a successor company to assume the Company’s
obligations under this Agreement.
7. Right to Advice of Counsel. The Executive acknowledges that he has consulted with counsel
and is fully aware of his rights and obligations under this Agreement.
8. Successors. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption agreement prior to the
effectiveness of any such succession shall entitle the Executive to the benefits described in
paragraph 6 of this Agreement, subject to the terms and conditions therein.
9. Assignment. This Agreement and all rights under this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their respective personal or
legal representatives, executors, administrators, heirs, distributees, devisees, legatees,
successors and assigns. This Agreement is personal in nature, and neither of the parties to this
Agreement shall, without the written consent of the other, assign or transfer this Agreement or any
right or obligation under this Agreement to any other person or entity; except that the Company may
assign this Agreement to any of its affiliates or wholly-owned subsidiaries, provided, that such
assignment will not relieve the Company of its obligations hereunder. If the Executive should die
while any amounts are still payable to the Executive hereunder, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee,
legatee, or other designee or, if there be no such designee, to the Executive’s estate.
10. Notices. All notices, requests, demands and other communications called for hereunder
shall be in writing and shall be deemed given (i) on the date of delivery, or, if earlier, (ii) one
(1) day after being sent by a well-established commercial overnight service, or (iii) three (3)
days after being mailed by registered or certified mail, return receipt requested, prepaid and
addressed to the parties or their successors at the following addresses, or at such
other addresses as the parties may later designate in writing:
If to the Executive: J. Xxxxxxx Xxxxxxxxx, at the Company while Executive remains
an employee of the Company, with a copy the last known residential address on record for Executive
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If to the Company:
|
Zip Realty Inc. | |
| 0000 Xxxxxx Xx., Xxxxx 000 | ||
| Xxxxxxxxxx, XX | ||
| 00000 |
or to such other address or the attention of such other person as the recipient party has
previously furnished to the other party in writing in accordance with this paragraph.
11. Waiver. Failure or delay on the part of either party hereto to enforce any right, power,
or privilege hereunder shall not be deemed to constitute a waiver thereof. Additionally, a waiver
by either party or a breach of any promise hereof by the other party shall not operate as or be
construed to constitute a waiver of any subsequent waiver by such other party.
12. Severability. Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any
other provision or any other jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
13. Arbitration.
(a) Arbitration. In consideration of Executive’s employment with the “Company”, its promise to
arbitrate all employment-related disputes and Executive’s receipt of the compensation, pay raises
and other benefits paid to Executive by the Company, at present and in the future, Executive agrees
that any and all controversies, claims, or disputes with anyone (including the Company and any
employee, officer, director, shareholder or benefit plan of the Company in their capacity as such
or otherwise) arising out of, relating to, or resulting from Executive’s employment with the
Company or the termination of Executive’s employment with the
Company, including any breach of this agreement, shall be subject to binding arbitration under the arbitration rules
set forth in California Code of Civil Procedure Section 1280 through 1294.2, including Section
1283.05 (the “Rules”) and pursuant to California law. Disputes which Executive agrees to arbitrate,
and thereby agrees to waive any right to a trial by jury, include any statutory claims under State
or Federal law, including, but not limited to, claims under Title VII ofthe Civil Rights Act of
1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of
1967, the Older Workers Benefit Protection Act, the California Fair Employment and Housing Act, the
California Labor Code, claims of harassment, discrimination or wrongful termination and any
statutory claims. Executive further understands that this agreement to arbitrate also applies to
any disputes that the Company may have with Executive.
(b) Procedure. Executive agrees that any arbitration will be administered by the American
Arbitration Association (“AAA”) and that a neutral arbitrator will be selected in a manner
consistent with its national rules for the resolution of employment disputes. The arbitration
proceedings will allow for discovery according to the rules set forth in the National Rules for the
Resolution of Employment Disputes. Executive agrees that the arbitrator shall have the power to
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decide any motions brought by any party to the arbitration, including motions for summary judgment
and/or adjudication and motions to dismiss and demurrers, prior to any arbitration hearing.
Executive agrees that the arbitrator shall issue a written decision on the merits. Executive also
agrees that the arbitrator shall have the power to award any remedies, including attorneys’ fees
and costs, available under applicable law. Executive understands the Company will pay for any
administrative or hearing fees charged by the arbitrator or AAA except that Executive shall pay the
first $125.00 of any filing fees associated with any arbitration Executive initiates. Executive
agrees that the arbitrator shall administer and conduct any arbitration in a manner consistent with
the rules and that to the extent that the AAA’s National Rules for the Resolution of Employment
Disputes conflict with the rules, the rules shall take precedence.
(c) Remedy. Except as provided by the rules, arbitration shall be the sole, exclusive and
final remedy for any dispute between Executive and the Company. Accordingly, except as
provided for by the rules, neither Executive nor the Company will be permitted to pursue court
action regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will not
have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator
shall not order or require the Company to adopt a policy not otherwise required by law which the Company has not adopted.
(d) Availability of injunctive relief. In accordance with Rule 1281.8 of the California Code
of Civil Procedure, Executive agrees that any party may also petition the court for injunctive
relief where either party alleges or claims a violation of the employment, confidential
information, invention assignment agreement between Executive and the Company or any other
agreement regarding trade secrets, confidential information, nonsolicitation or Labor Code §2870.
In the event either party seeks injunctive relief, the prevailing party shall be entitled to
recover reasonable costs and attorneys fees.
(e) Administrative relief. Executive understands that this agreement does not prohibit
Executive from pursuing an administrative claim with a local, state or federal administrative body
such as the department of fair employment and housing, the equal employment opportunity commission
or the workers’ compensation board. lbis agreement does, however, preclude Executive from pursuing
court action regarding any such claim.
(f) Voluntary Nature of Agreement. Executive acknowledges and agrees that Executive is
executing this agreement voluntarily and without any duress or undue influence by the Company or
anyone else. Executive further acknowledges and agrees that Executive has carefully read this
agreement and that Executive has asked any questions needed for Executive to understand the terms,
consequences and binding effect of this agreement and fully understand it, including that Executive
is waiving Executive’s right to a jury trial. Finally, Executive agrees that he/she has been
provided an opportunity to seek the advice of an attorney before signing this agreement.
14. Integration. This Agreement, together with the 2004 Plan, the Executive’s Stock Option
Agreement, Executive’s Restricted Stock Award Agreement and the Zip Realty Employee Proprietary
Information Agreement represents the entire agreement and understanding between the parties as to
the subject matter herein and supersedes all prior or contemporaneous agreements whether written or
oral. No waiver, alteration, or modification of any of the provisions of this Agreement will be
binding unless in writing and signed by the Company.
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15. Headings. The headings of the paragraphs contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of any provision of
this Agreement.
16. Applicable Law. This Agreement shall be governed by and construed in accordance with the
internal substantive laws, and not the choice of law rules, of the State of California. Executive
hereby consents to the exclusive personal jurisdiction and venue of the courts of the federal and
state courts in the State of California.
17. Counterparts. This Agreement may be executed in one or more counterparts, none of which
need contain the signature of more than one party hereto, and each of
which shall be deemed to be an original, and all of which together shall constitute a single
agreement.
18. Tax Withholding. All payments made pursuant to this Agreement will be subject to
withholding of applicable taxes.
19. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this
matter with and obtain advice from his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by their duly authorized officers, as of the day and year first above written.
| COMPANY: | ||||||||||
| ZipRealty Inc. | ||||||||||
By:
|
/s/ Xxxxxx Xxxx | Date: | 9/13/07 | |||||||
Title:
|
Chairman of Board, Zip Realty | |||||||||
| EXECUTIVE: | ||||||||||
| /s/ J. Xxxxxxx Xxxxxxxxx | Date: | 9/13/07 | ||||||||
| J. Xxxxxxx Xxxxxxxxx | ||||||||||
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