Exhibit 10.1

 

ZipRealty Inc. Management Incentive Plan – Fiscal Year 2013

 

General Purpose: This ZipRealty Inc. (“Company”) Management Incentive Plan –
Fiscal Year 2013 (“Plan”) is designed to motivate and retain the Company’s
Eligible Employees (as defined herein) to achieve the Company’s financial and
operational goals for Fiscal Year 2013, as well as to retain such persons in the
employ of the Company.

 

Duration: This Plan will be in effect for the Company’s fiscal year ending
December 31, 2013 (“Fiscal Year 2013”), meaning that the performance period
determining whether bonuses will be paid upon satisfaction of performance
objectives is Fiscal Year 2013.

 

Plan Administrator: The Compensation Committee (the “Committee”) of the Board of
Directors (the “Board”) shall administer this Plan with respect to Eligible
Persons who are executive officers of the Company, and the Company’s Chief
Executive Officer, in consultation with the Committee, shall administer this
Plan with respect to other Eligible Persons (as applicable, the
“Administrator”).

 

Eligible Persons: Individuals eligible to earn an incentive payment under this
plan (“Eligible Persons”) include all headquarters-based “exempt” (pursuant to
federal and state wage and hour laws) employees who are employed by the Company
during Fiscal Year 2013, without interruption (except as set forth in the
“Proration” section of this Plan), continuously through the date following
completion of Fiscal Year 2013 when the Administrator completes its review of
performance and calculates and approves the payment of bonuses under this Plan.
“Eligible Persons” specifically excludes the President of Broker Operations,
Regional Vice Presidents, including Joseph Pucillo and Jacob Stanton, and all
other sales management covered pursuant to a Sales Management Incentive Plan for
2013.

 

Proration: In the sole discretion of the Administrator, a prorated incentive may
be paid under this Plan for any person who would otherwise be an Eligible Person
but who became eligible to participate in the Plan after the beginning of Fiscal
Year 2013. Additionally, in the sole discretion of the Administrator, a modified
incentive amount may be paid under this Plan to any Eligible Person who works a
reduced work schedule.

 

Incentive Pool: The Committee, in consultation with the Company’s Chief
Executive Officer, will establish an incentive pool of funds available for
payout only if the Company achieves its plan for both Adjusted EBITDA and
revenue for Fiscal Year 2013. Thereafter, the incentive pool shall be funded as
follows:

 

(i)If the Company achieves its plan for Adjusted EBITDA but does not exceed that
plan by at least $700,000, and the Company does not exceed its plan for revenue
by at least $1 million, then eighteen percent (18%) of Adjusted EBITDA in excess
of the plan;

 

(ii)If the Company exceeds its plan for Adjusted EBITDA by at least $700,000,
and the Company does not exceed its plan for revenue by at least $1 million,
then eighteen percent (18%) of total Adjusted EBITDA;

 

 

 

 

(iii)If the Company achieves its plan for Adjusted EBITDA but does not exceed
that plan by at least $700,000, and the Company exceeds its plan for revenue by
at least $1 million, then twelve percent (12%) of all revenue in excess of the
Company’s plan, in all events to be capped at and not to exceed 35% of total
Adjusted EBITDA; or

 

(iv)If the Company exceeds its plan for Adjusted EBITDA by at least $700,000,
and the Company exceeds its plan for revenue by at least $1 million, then both
eighteen percent (18%) of total Adjusted EBITDA and twelve percent (12%) of all
revenue in excess of the Company’s plan, in all events to be capped at and not
to exceed 35% of total Adjusted EBITDA.

  

For purposes of this Plan, “Adjusted EBITDA” shall be defined as net income
(loss) less interest income plus interest expense, provision for income taxes,
depreciation and amortization expense, stock-based compensation and further
adjusted to eliminate the impact of certain items that the Company does not
consider representative of its ongoing core operating performance.

 

Incentive Amount: Subject to the terms and conditions of this Plan, Eligible
Persons may earn payment of “Incentive Amounts” based on a percentage of the
funded incentive pool, with the Committee to determine the percentage to be paid
to each Eligible Person who is an executive officer and the Chief Executive
Officer to determine the percentage to be paid to other Eligible Persons. The
Committee has determined the following Incentive Amount percentages for
executive officers: Chief Executive Officer, 18%, Chief Financial Officer, 9%,
President/General Manager of Powered by Zip, 8%, Senior Vice President of
Business Development/General Counsel, 7.5%, and Senior Vice President of
Technology, 7.5%. The Committee retains the right to determine Incentive Amount
percentages for any additional executive officers of the Company.

 

The Incentive Amounts may be adjusted pursuant to the “Performance Adjustment”
section below.

 

Performance Adjustment: The Administrator shall have discretion to adjust any
Eligible Person’s Incentive Amount based on his or her job performance for
Fiscal Year 2013 by reducing or increasing the Incentive Amount as the
Administrator, in its sole discretion, deems appropriate, including elimination
of the Incentive Award. The Administrator shall also have the discretion to
determine that no Incentive Pool will be funded.

 

Calculation and Approval: An Eligible Person’s Incentive Amount or Adjusted
Incentive Amount, as determined in the manner set forth above, is that Eligible
Person’s “Actual Incentive” with respect to Fiscal Year 2013. All calculations
of each Actual Incentive must be approved by the Administrator with respect to
such participant and the total amount of the aggregate incentive pool to be paid
hereunder to all Eligible Persons must be approved by the Committee after such
consultation with the Board as it deems appropriate.

 

Payments: All amounts, if any, to be paid out hereunder shall be paid in
accordance with the Company’s standard payroll practices, within a reasonable
amount of time and in accordance with applicable law following determination by
the Committee that there shall be a pool from which to make such payments with
respect to Fiscal Year 2013 and calculation of applicable incentives. In all
cases, amounts, if any, to be paid out hereunder shall be paid no later than
March 15 of the year following the year in which the applicable amount is
earned.

 

 

 

 

Future Incentive Periods: This Plan is in effect only with respect to Fiscal
Year 2013. Nothing in this Plan provides for or implies the establishment or
payment of any incentives with respect to future periods.

 

Merger or Acquisition: The Board of Directors may modify this Plan, including
terminate it without making payments hereunder, with respect to Fiscal Year 2013
in its sole discretion in the event of a merger or acquisition of the Company.

  

Administration: The Committee has sole and exclusive discretionary authority to
interpret this Plan and adopt such rules and regulations for carrying out this
Plan as it deems appropriate. The Committee may, in its discretion, modify or
terminate this Plan. Decisions by the Committee are final and binding on all
parties to the maximum extent allowed by law.

 

Employment is Terminable At Will: Nothing in this Plan will interfere with or
limit in any way the right of the Company or the right of any individual to
alter or terminate the employment relationship at any time, with or without
cause.

 

General Terms and Conditions: Amounts to be paid under this Plan in cash will be
paid from the general funds of the Company. Nothing in this Plan will be
construed to create a trust or establish any evidence of any individual’s claim
of any right to payment other than as an unsecured general creditor of the
Company. All payments to be made in cash will be made in the currency in which
the individual is regularly paid.

 

Tax Withholding: All payments will be subject to the satisfaction of applicable
federal, state, local or similar income withholding requirements and to any
employment tax withholding requirements. The Company shall withhold all
applicable amounts required by law from any payments hereunder.

 

Section 409A: All cash payable under this Plan is intended to be exempt from or
comply with the requirements of Section 409A of the Internal Revenue Code of
1986, as amended and the regulations and guidance thereunder (together,
Section 409A) so that none of the payments and benefits to be provided under
this Plan will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein shall be interpreted to so comply or be exempt. Each
payment and benefit payable under this Plan is intended to constitute a separate
payment for purposes of Section 1.409A-2(b) (2) of the Treasury Regulations. The
Company may, in good faith and without the consent any Eligible Participant,
make any amendments to this Plan and take such reasonable actions which it deems
necessary, appropriate or desirable to avoid imposition of any additional tax or
income recognition under Section 409A prior to actual payment to an Eligible
Participant.

 

Governing Law; Severability: This Plan will be construed, administered and
governed in all respects in accordance with the internal laws of the State of
California. In the event that any provision of this Plan is held illegal or
invalid for any reason, such holding will not affect the remaining provisions of
this Plan, and this Plan will be construed and enforced as if the illegal and
invalid provision had not been included.

 

Entire Agreement: This Plan and any resolutions of the Compensation Committee
amending the Plan, is the entire understanding between the Company and any
participant regarding the subject matter of this Plan and supersedes all prior
bonus or commission incentive plans, or employment contracts whether with any
subsidiary or affiliate, or any written or verbal representations regarding the
subject matter of this Plan. Participation in this Plan during the Fiscal Year
2013 will not convey any entitlement to participate in this or future plans or
to the same or similar bonus benefits. Payments under this Plan are an
extraordinary item of compensation that is outside the normal or expected
compensation for the purpose of calculating any extra benefits, termination,
severance, redundancy, end-of-service premiums, bonuses, long-service awards,
overtime premiums, pension or retirement benefits or other similar payment.