Exhibit 10.1
SEPARATION AGREEMENT AND RELEASE
     This Separation Agreement and Release (the “Agreement”) is entered into
between ZipRealty, Inc. (the “Company”), on the one hand and Richard Williams
(the “Executive”) on the other hand with reference to the following facts:
WHEREAS:
     Executive was employed by the Company.
     On or about April 16, 2007 Executive and Company entered into an Employment
Agreement.
     On or about April 23, 2007 Executive and Company entered into an Executive
Proprietary Information Agreement (the “Confidentiality Agreement”).
     Company and Executive have entered into a stock option agreement dated
May 24, 2007 (the “Stock Option Agreement”), granting Executive the option to
purchase shares of the Company’s common stock (collectively, the “Options”)
subject to the terms and conditions of the Company’s 1999 Stock Plan (the “1999
Plan”) and 2004 Equity Incentive Plan (the “2004 Plan” and together with the
1999 Plan, the “Plans”), as applicable, and the Stock Option Agreements.
     Executive resigned from his position with the Company for personal reasons
on or about September 13, 2007 (the “Termination Date”).
COVENANTS
     It therefore is agreed by and between the undersigned as follows:
     1. Each of the undersigned executes and enters into this Agreement in
consideration of each and all of the agreements made and undertaken by each of
the undersigned as follows:
     (a) The Parties agree that for purposes of determining the number of shares
of the Company’s common stock which Executive is entitled to purchase from the
Company, pursuant to the exercise of outstanding options, the Executive will be
considered to have vested only up to the Termination Date. Executive
acknowledges that as of the Termination Date, he will have vested in zero
options.
     (b) Company agrees to pay Executive nine weeks of Executive’s current base
salary in the amount of $4,326.92 per week, in accordance with the Company’s
standard payroll practices.
     (c) Executive’s health insurance benefits will cease on September 30, 2007,
subject to Executive’s right to continue his health insurance under COBRA.
Assuming

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Executive makes a timely election to continue his health insurance under COBRA,
Company will reimburse Executive (or make direct payment for) Executive’s
percentage of the cost of medical insurance benefits continuation under COBRA
for him and his dependents for the six months following the Effective Date of
the release described below. Executive’s participation in all other benefits and
incidents of employment will cease on the Termination Date. Executive will cease
accruing Executive benefits, including but not limited to, vacation time and
paid time off, as of the Termination Date.
     (d) Company shall forgive Executive’s obligation to repay Company the
$15,000 Relocation Payment subject to repayment pursuant to Executives
Employment Agreement dated April 16, 2007.
     (e) Upon the final date of Executive’s employment with Company, he was paid
all accrued, unused vacation. Executive acknowledges and agrees that by these
payments, he received from Company each and all of the employment benefits,
compensation, wages, vacation pay, and other monies due and owing to him from
Company.
     (f) Executive shall continue to maintain the confidentiality of all
confidential and proprietary information of the Company and shall continue to
comply with the terms and conditions of the Confidentiality Agreement between
Executive and the Company. Executive shall return all of the Company’s property
and confidential and proprietary information in his possession to the Company.
By signing this Agreement, Executive represents and declares under penalty of
perjury under the laws of the state of California that he has returned all
Company property.
     2. Executive and Company agree that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Executive by the
Company and its owners, related entities, officers, directors, employees,
agents, representatives and shareholders (collectively the “Company Releasees”)
and owed to the Company Releasees by the Executive. Executive, on his own
behalf, and on behalf of his respective heirs, family members, executors,
agents, assigns, does hereby fully and forever release and discharge the Company
Releasees and Company Releasees do hereby fully and forever release and
discharge the Executive of and from, and agree not to sue concerning any claim,
duty, obligation or cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that either Executive or
Company Releasees may possess arising from any omissions, acts or facts that
have occurred up until and including the Effective Date of this Agreement,
including without limitation:

  a)   any and all claims relating to or arising from Executive’s employment
relationship;     b)   any and all claims relating to, or arising from,
Executive’s right to purchase, or actual purchase of shares of stock of the
Company, including, without limitation, any claims for fraud misrepresentation,
breach of fiduciary duty, breach of duty under applicable state

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      corporate law, and securities fraud under any state or federal law;     c)
  any and all claims under the law of any jurisdiction including, but not
limited to, breach of fiduciary duty, wrongful discharge of employment,
constructive discharge from employment, termination in violation of public
policy, discrimination, harassment, retaliation, breach of contract, both
express and implied, breach of the covenant of good faith and fair dealing, both
express and implied; promissory estoppel, negligent and intentional infliction
of emotional distress, negligent and intentional misrepresentation, negligent
and intentional interference with prospective economic advantage, unfair
business practices, defamation, libel, slander, negligence, personal injury,
fraud, misrepresentation, assault, battery invasion of privacy, false
imprisonment and conversion;     d)   any and all claims for violation of any
federal, state or municipal statute, including, but not limited to, Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act of
1990, the Fair Labor Standards Act, the Executive Retirement Income Security Act
of 1974, the Worker Adjustment Retraining and Notification Act, the Older
Workers Benefit Protection Act; the California Fair Employment and Housing Act,
the California Labor Code;     e)   any and all claims for violation of the
federal or any state constitution;     f)   any and all claims arising out of
any other laws and regulations relating to employment or employment
discrimination;     g)   any claim for any loss, cost, damage, or expense
arising out of any dispute over the non-withholding or other tax treatment of
the proceeds received by Executive as a result of this Agreement; and     h)  
any and all claims for attorneys’ fees and costs.

The Company and Executive agree that the release set forth in this section shall
be and remain in effect in all respects as a complete general release as to the
matters released. This release does not extend to any rights of defense against
and/or indemnification from claims by third parties arising from Executive’s
performance of his duties while employed by the Company; any rights arising with
respect to his vested shares or options; or any obligations incurred under this
Agreement. Further, this release does not waive any rights or claims that may
arise after the Effective Date of the Agreement and does not restrict
Executive’s right to challenge the validity of this Agreement. Further, this
release does not extend to claims which as a matter of law cannot be waived,
such as a right to indemnification under California Labor Code section 2802.
Furthermore, Executive understands that while this Agreement does not affect his
right

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to file a charge with or participate as a witness in an investigation or
proceeding conducted by the EEOC or any similar state agency, by accepting the
terms provided herein and the consideration provided to him as a result, he
gives up any right to receive any relief whatsoever, including but not limited
to financial benefit or monetary recovery, from any lawsuit or settlement
related to such rights and claims as he now gives up, whether the lawsuit is
filed or the settlement reached by the EEOC, another agency, or anyone else
     3. Executive and Company represent that each party is not aware of any
claim by him or it other than the claims that are released by this Agreement.
Executive and Company acknowledge that he/it has been advised by legal counsel
and is familiar with the provisions of California Civil Code Section 1542, which
provides as follows
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS/HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
     Executive and Company, being aware of said code section, agree to expressly
waive any rights he/it may have under the above principal or any statute or
common law principals of similar effect.
     4. Executive acknowledges that he is waiving and releasing any rights he
may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and
that this waiver and release is knowing and voluntary. Executive and the Company
agree that this waiver and release does not apply to any rights or claims that
may arise under the ADEA after the Effective Date of this Agreement. Executive
acknowledges that the consideration given for this waiver and release Agreement
is in addition to anything of value to which Executive was already entitled.
Executive further acknowledges that he has been advised in writing that:

  a)   he should consult with an attorney prior to executing this Agreement;    
b)   he has up to twenty-one (21) days within which to consider this Agreement;
    c)   he has seven (7) days following his execution of this Agreement to
revoke the Agreement;     d)   this Agreement shall not be effective until the
revocation period has expired; and     e)   nothing in this Agreement prevents
or precludes Executive from challenging or seeking a determination in good faith
of the validity of this waiver under the ADEA, nor does it impose any condition
precedent, penalties or costs from doing so, unless specifically

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      authorized by federal law.

     Each of the undersigned agrees that none of the releases set forth herein
releases any claims arising out of obligations set forth in this Agreement.
     5. This Agreement is effective after it has been signed by both parties and
after (8) days have passed since Executive signed the Agreement (the “Effective
Date”).
     6. The Parties agree that any and all disputes arising out of the terms of
this Agreement, their interpretation, and any of the matters herein released,
shall be subject to binding arbitration in Alameda County, California by an
arbitrator agreed to by both parties. In the event of any legal action relating
to or arising out of this Agreement, the prevailing party shall be entitled to
recover from the losing party its attorneys’ fees and costs incurred in that
action to the extent permissible by law. The parties agree that the prevailing
party in any arbitration shall be entitled to injunctive relief in any court of
competent jurisdiction to enforce the arbitration award. The Parties hereby
agree to waive their right to have any dispute between them resolved in a court
of law by a judge or jury. This paragraph will not prevent either party from
seeking injunctive relief (or any other provisional remedy) from any court
having jurisdiction over the Parties and the subject matter of their dispute
relating to Executive’s obligations under this Agreement.
     7. If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or application of the
Agreement which can be given effect without the invalid provisions or
application and to this end the provisions of this Agreement are declared to be
severable.
     8. The Company makes no representations or warranties with respect to the
tax consequences of the payment of any sums to Executive under the terms of
Section 1 of this Agreement. Executive agrees and understands that he is
responsible for payment, if any, of local, state and/or federal taxes on the
sums paid hereunder by the Company and any penalties or assessments thereon.
Executive further agrees to indemnify and hold the Company harmless from any
claims, demands, deficiencies, penalties, assessments, executions, judgments, or
recoveries by any government agency against the Company for any amounts claimed
due on account of Executive’s failure to pay federal or state taxes or damages
sustained by the Company by reason of any such claims, including reasonable
attorneys’ fees.
     9. This Agreement contains the entire agreement of the undersigned with
respect to the matters covered by this Agreement and no promise made by any
party or by an officer, attorney, or agent of any party that is not expressly
contained in this Agreement shall be binding or valid. This Agreement supersedes
any prior agreement between the parties with the exception of the
Confidentiality Agreement, the Plans and the Stock Option Agreements.
Additionally, any modification of any provision of this Agreement, to be
effective, must be in writing and signed by both parties.
     10. This Agreement shall be governed by and construed under the laws of the
State of California.

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     11. This Agreement may be executed by facsimile and in counterparts, and
the counterparts, taken together, shall constitute the original.
     12. Each of the undersigned executing this Agreement on behalf of a party
represents and warrants that he or she is a duly appointed agent or duly elected
officer of the party and is fully authorized to execute this Agreement on that
party’s behalf.
     13. Each party to this Agreement has consulted with, or had the opportunity
to consult with, legal and tax counsel concerning all paragraphs of this
Agreement. Each party has read the Agreement and has been fully advised by legal
counsel with respect to the rights and obligations under the Agreement, or has
had the opportunity to obtain such advice. Each party is fully aware of the
intent and legal effect of the Agreement, and has not been influenced to any
extent whatsoever by any representation or consideration other than as stated
herein. After consultation with and advice from, or the opportunity for
consultation with and advice from, legal counsel, each party voluntarily enters
into this Agreement.

                 
 
               
 
  DATED: September 14, 2007   /s/ Richard Williams                              
Richard Williams    
 
               
 
                    DATED: September 14, 2007   ZipRealty, Inc.    
 
               
 
      By:   /s/ Patrick Lashinsky    
 
         
 
Patrick Lashinsky    
 
          Chief Executive Officer    

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