Document:

exv10w13

 

Exhibit 10.13

ZipRealty Inc. Management Incentive Plan — Fiscal Year 2006

General Purpose: This ZipRealty Inc. (“Company”) Management Incentive Plan — Fiscal Year
2006 (this “Plan”) is designed to motivate the Company’s Management (defined below) to achieve the
Company’s financial and operational goals for Fiscal Year 2006, 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,
2006 (“Fiscal Year 2006”), meaning that the performance period determining whether bonuses will be
paid upon satisfaction of performance objectives is Fiscal Year 2006 (thought such payments, if
earned, will be made following the end of this Fiscal Year as set forth below).

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

Eligible Persons: For the purposes of this Plan, “Management” includes all employees of
the Company holding the position of Vice President or higher, and all headquarters-based Directors
and Managers, in each case, and as a condition to such each such person earning and becoming
entitled to any bonus payment hereunder, provided that such person is employed by the Company both
(i) on December 31, 2006, and (ii) on the date following the end of Fiscal Year 2006 on which the
Plan Administrator completes its review of Fiscal Year 2006 performance and approves the payment of
bonuses under this Plan. “Management” specifically excludes all District Directors, District
Managers and all other employees not specifically identified above in this paragraph.

Proration: In the sole discretion of the Administrator, an incentive bonus may be paid
under this Plan on a pro-rated basis for any member of Management who became eligible to
participate in the Plan after the beginning of Fiscal Year 2006.

Incentive Pool Requirement: The Committee will establish an incentive pool of funds
available for payout under this Plan only if the Company achieves both (i) the minimum revenue
threshold, as determined by the Committee on adoption of this Plan, and (ii) a minimum of 85% of
Target. “Target” for this purpose means:

	•	 	The Company’s targeted net operating income before taxes less certain one-time,
extraordinary charges (such as, without limitation, charges related to litigation or
restructuring matters) for Fiscal Year 2006, as determined by the Committee on adoption of
this Plan. The determination of any extraordinary charges referred to in the preceding
sentence shall be determined in the sole discretion by the Board or the Committee. The
net operating income factor shall be weighted at 25% in calculating the amount of bonuses
to be paid hereunder (but subject to adjustment as set forth in the second bullet point
below).

	•	 	Specified other corporate performance objectives relating to revenue and certain other
strategic initiatives as established by the Administrator. The separate components of
these other corporate performance objectives shall be equally weighted in determining the
value for this “other corporate performance objectives” factor, which shall in the
aggregate be weighted at 25% of the amount of bonuses to be paid hereunder (but subject to
adjustment as set forth in the following bullet point).

	•	 	Such individual performance objectives (meaning, objectives determined based upon an
individual participant’s own performance) as shall be determined with respect to any
participant by the Administrator. This “individual performance objectives” factor shall
generally be weighted at 50% of the amount of bonuses to be paid hereunder.

     Incentive Eligibility: Subject to the terms and conditions of this Plan, members of
Management will be eligible to receive payment of a bonus amount (the “Target Incentive Amount”),
determined as a percentage of such individual’s annual base salary at December 31, 2006 (“Base
Salary”), upon the Company’s 100% achievement of Target:

 

 

	 	 	 	 	 	 
	 	Position
	 	 	Target Incentive Amount at 100% Achievement of Target	 
	 	 
	 	 	(“Target Incentive Percentage”)	 
	 	President and CEO
	 	 	50% of Base Salary	 
	 	Executive Vice President
	 	 	25% of Base Salary	 
	 	Senior Vice President
	 	 	25% of Base Salary	 
	 	Vice President
	 	 	25% of Base Salary	 
	 	HQ Directors
	 	 	10% of Base Salary	 
	 	HQ Managers
	 	 	5% of Base Salary	 
	 

Reduction in Target Incentive Amount for less than 100% Achievement of Target: If the
Company achieves a performance level for Fiscal Year 2006 of at least 85% but less than 100% of
Target, a participant’s Target Incentive Amount shall be reduced as follows:

	 	 	 	 	 	 
	 	Percentage of Target Achieved
	 	 	“Adjusted Incentive Amount"	 
	 	At least 85% but less than 90%
	 	 	81.25% of Target Incentive Percentage	 
	 	At least 90% but less than 95%
	 	 	87.5% of Target Incentive Percentage	 
	 	At least 95% but less than 100%
	 	 	93.75% of Target Incentive Percentage	 
	 

No payment hereunder shall be made for Target achievement at less than 85% and all participants’
Incentive Amounts hereunder shall in such case be $0. Likewise, no payment hereunder shall be made
if the minimum revenue threshold is not met.

Increase in Target Incentive Amount for greater than 100% Achievement of Target. If the
Company achieves a performance level for Fiscal Year 2006 that exceeds 100% of Target, then the
Administrator shall have discretion (but not the obligation) to increase a participant’s Target
Incentive Amount as follows:

	 	 	 	 	 	 
	 	Percentage of Target Achieved
	 	 	“Adjusted Incentive Amount"	 
	 	More than 105% but less than 110%
	 	 	106.25% of Target Incentive Percentage	 
	 	More than 110% but less than 115%
	 	 	112.5% of Target Incentive Percentage	 
	 	More than 115% but less than 120%
	 	 	118.75% of Target Incentive Percentage	 
	 	More than 120%
	 	 	125% of Target Incentive Percentage	 
	 

Performance achievement for Fiscal Year 2006 above 100% but less than 105% will result in a Target
Incentive Amount equal to the Target Incentive Percentage (as set forth in the first table above).

Performance Adjustment: In addition to the adjustments reflected in the preceding two
tables, the Administrator will have the discretion to adjust any individual participant’s Target or
Adjusted Incentive Amount as a result of corporate or individual performance results for Fiscal
Year 2006 by reducing or increasing such amount otherwise determined as set forth in the above
tables by up to 10%.

 

 

Calculation and Approval. An individual’s Target or Adjusted Incentive Amount, as
determined in the manner set forth above, is that individual participant’s “Actual Incentive” with
respect to Fiscal Year 2006. All calculations of each participant’s 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 participants must be approved by the Committee
after such consultation with the Board as it deems appropriate.

Payouts: All amounts, if any, to be paid out hereunder shall be paid by March 14, 2007,
following determination by the Committee that there shall be a pool from which to make such
payments with respect to Fiscal Year 2006.

Future Incentive Periods: This Plan is in effect only with respect to Fiscal Year 2006.
Nothing in this Plan provides for or implies the establishment or payment of any bonuses 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 2006 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 necessary and
appropriate. 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 terminate the employment
relationship at any time, with or without cause.

General Terms and Conditions: Amounts to be paid under this Plan 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 will be made in the currency in which the individual
is regularly paid and 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.

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 Plan Year 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.exv10w8

 

Exhibit 10.8

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of May 31, 2005,
by and between THE SPORTSMAN’S GUIDE, INC., a Minnesota corporation (“Borrower”) and WELLS FARGO
BANK, NATIONAL ASSOCIATION (“Bank”).

RECITALS

     WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that
certain Credit Agreement between Borrower and Bank dated as of June 29, 2004, as amended from time
to time (“Credit Agreement”).

     WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set
forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said
changes.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

	 	1.	 	Section 5.8 is hereby deleted in its entirety, and the following substituted
therefor:

“SECTION 5.8 DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or
distribution either in cash, stock or any other property on Borrower’s
stock now or hereafter outstanding, nor redeem, retire, repurchase or
otherwise acquire any shares of any class of Borrower’s stock now or
hereafter outstanding without the prior written consent of Bank.
Notwithstanding the foregoing, Bank hereby expressly acknowledges and
agrees that Borrower shall be permitted to continue to repurchase up to
10% of its common stock through May 31, 2006.”

	 	2.	 	Except as specifically provided herein, all terms and conditions of the
Credit Agreement remain in full force and effect, without waiver or modification. All
terms defined in the Credit Agreement shall have the same meaning when used in this
Amendment. This Amendment and the Credit Agreement shall be read together, as one
document.
	 
	 	3.	 	Borrower hereby remakes all representations and warranties contained in the
Credit Agreement and reaffirms all covenants set forth therein. Borrower further
certifies that as of the date of this Amendment there exists no Event of Default as
defined in the Credit Agreement, nor any condition, act or event which with the giving
of notice or the passage of time or both would constitute any such Event of Default.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the
day and year first written above.

	 	 	 	 	 
	
THE SPORTSMAN’S GUIDE, INC.
	 	WELLS FARGO BANK,
NATIONAL ASSOCIATION
	By:	 	 	By:
	 	 

Charles Lingen, Chief Financial Officer
	 	 	 

Thomas Skalitzky, Relationship Manager

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