Document:

exv10w1

 

LODGENET ENTERTAINMENT CORPORATION

LODGENET 2003 STOCK OPTION AND INCENTIVE PLAN

(as amended and adopted by the stockholders May 10, 2006)

Section 1. Purpose.

     The purpose of the LodgeNet Entertainment Corporation (“LodgeNet”) 2003 Stock Option and
Incentive Plan (the “Plan”) is to benefit LodgeNet by recognizing the contributions made to
LodgeNet by officers and other employees (“Employees”) (including Directors of LodgeNet who are
also Employees) of LodgeNet and its subsidiaries, to provide such persons with additional incentive
to devote themselves to the future success of LodgeNet, and to improve the ability of LodgeNet to
attract, retain and motivate individuals, by providing such persons with a favorable opportunity to
acquire or increase their proprietary interest in LodgeNet over a period of years through receipt
of options and other awards relating to the common stock of LodgeNet. In addition, the Plan is
intended as an additional incentive to members of the Board of Directors of LodgeNet (“Board”) who
are not Employees of LodgeNet (“Non-Employee Directors”) to serve on the Board and to devote
themselves to the future success of LodgeNet by providing them with a favorable opportunity to
acquire or increase their proprietary interest in LodgeNet through receipt of options to acquire
common stock of LodgeNet or shares of Restricted Stock.

     LodgeNet may grant stock options that constitute “incentive stock options” (“ISOs”) within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended, and any Regulations issued
thereunder (the “Code”), stock options that do not constitute ISOs (“NSOs”) (ISOs and NSOs being
hereinafter collectively referred to as “Options”), Restricted Stock Awards, Stock Appreciation
Rights (“SARs”) and Phantom Stock Units (Options and other types of specified grants being
hereinafter collectively referred to as “Awards”). Subsequent amendments to the Code or
Regulations governing ISOs shall be automatically incorporated into the Plan. Except as otherwise
provided in the Plan, the terms and conditions of Awards need not be identical with respect to each
Participant, each Award, or both.

Section 2. Eligibility.

     Non-Employee Directors shall participate in the Plan only in accordance with the provisions of
Sections 5 and 10 of the Plan. The Plan Administrator (as defined in Section 3) shall initially,
and from time to time thereafter, (a) select those Employees to participate in the Plan on the
basis of the special importance of their services in the management, development and operations of
LodgeNet and (b) recommend to the Board of Directors Awards for the Non-Employee Directors (each
such Non-Employee Director and Employee receiving Awards granted under the Plan is referred to
herein as a “Participant”).

Section 3. Administration.

     3.1 The Committee. The Plan shall be administered by the Board or a committee authorized by
the Board (the “Plan Administrator”). If the Board does not delegate administration to a
committee, the Board shall function as the Plan Administrator, subject to other requirements of
this

 

 

Section 3.1. All grants to LodgeNet’s covered employees, as that term is defined in Treasury
Regulation 1.162-27(c)(2), of qualified performance-based compensation, as described in Treasury
Regulation 1. 162-27(e)(2), and the performance goals for such covered employees, shall be
established, if the Board so determines, by a committee comprised of at least two “outside
directors” within the meaning of Section 162(m) of the Code. If required by the rules of NASDAQ
(or any other stock market or exchange on which LodgeNet’s securities are traded), the members of
the Plan Administrator shall, in addition, for all applicable grants, satisfy such rules. Grants
to LodgeNet’s officers and Directors who are subject to Section 16 of the Securities Exchange Act
of 1934, as amended (“Exchange Act”), shall be administered by a committee authorized by the Board
that satisfies the “non-employee directors” requirements of Rule 16b-3, promulgated under the
Exchange Act.

     3.2 Authority of the Plan Administrator. No person, other than the Plan Administrator, shall
have any authority concerning decisions regarding the Plan. Subject to the express provisions of
the Plan, including but not limited to Sections 5 and 10, the Plan Administrator shall have sole
discretion concerning all matters relating to the Plan and Awards granted hereunder. The Plan
Administrator in its sole discretion shall determine the Non-Employee Directors and Employees of
LodgeNet to whom, and the time or times at which, Awards will be granted, the type of Award to be
granted, the number of shares to be subject to each Award, the expiration date of each Award, the
time or times within which the Award may be exercised, the cancellation of the Award (with the
consent of the holder thereof), and the other terms and conditions of the grant of the Award;
provided, however, that the Plan Administrator shall have no authority to reprice existing Options
under the Plan. Without limiting the generality of the foregoing, the Plan Administrator may grant
Options which have exercise prices which increase over time.

     The Plan Administrator may, subject to the provisions of the Plan, establish such rules and
regulations as it deems necessary or advisable for the proper administration of the Plan, and may
make determinations and may take such other action in connection with or in relation to the Plan as
it deems necessary or advisable. Each determination or other action made or taken pursuant to the
Plan, including interpretation of the Plan and the specific terms and conditions of the Awards
granted hereunder by the Plan Administrator shall be final and conclusive for all purposes and upon
all persons including, but without limitation, LodgeNet, the Board, officers and the affected
Participants and their respective successors in interest.

     No individual serving as a member of the Plan Administrator shall, in the absence of bad
faith, be liable for any act or omission with respect to his or her service. Such service shall
constitute service as a Director of LodgeNet so that he or she shall be entitled to indemnification
pursuant to LodgeNet’s Certificate of Incorporation and By-Laws.

     3.3 Limitations. Without the approval of LodgeNet’s stockholders, the exercise price of
Options granted hereunder shall not, subsequent to the date of grant, be modified or reduced in any
way, other than in connection with a stock split or comparable adjustment in connection with a
recapitalization, plan of exchange, acquisition, or similar event.

-2-

 

     In any fiscal year, no Participant shall be granted more than $1,000,000 in value of
Restricted Stock or more than 100,000 Options.

Section 4. Shares of Common Stock Subject to Plan.

     4.1 The total number of shares of common stock, par value $.01 per share, of LodgeNet (the
“Common Stock”), that may be issued under the Plan initially shall be 1,500,000. Any shares of
Common Stock subject to issuance upon exercise of Awards but which are not issued because of a
surrender (other than pursuant to Sections 8.2 or 17 of the Plan), forfeiture, expiration,
termination or cancellation of any such Award, shall once again be available for issuance pursuant
to subsequent Awards. If either the purchase price of the shares of Common Stock upon exercise of
any Award or the tax withholding requirement is satisfied by tendering or withholding of shares of
Common Stock or by tendering exercisable Awards, only the number of shares of Common Stock issued
net of the shares of Common Stock tendered or withheld shall be deemed delivered for purposes of
determining the number of shares of Common Stock available for Awards under the Plan.

     4.2 The number of shares of Common Stock subject to the Plan and to Awards granted under the
Plan, the exercise price with respect to Options and Tandem SARs (as defined below) and the base
price with respect to Nontandem SARs and Non-Option Stock Appreciation Rights (each as defined
below) shall be adjusted as follows: (a) in the event that the number of outstanding shares of
Common Stock is changed by any stock dividend, stock split or combination of shares, the number of
shares subject to the Plan and to Awards previously granted thereunder shall be proportionately
adjusted; (b) in the event of any merger, consolidation or reorganization of LodgeNet with any
other corporation or corporations, there shall be substituted on an equitable basis as determined
by the Board, in its sole discretion, for each share of Common Stock then subject to the Plan and
for each share of Common Stock then subject to an Award granted under the Plan, the number and kind
of shares of stock, other securities, cash or other property to which the holders of Common Stock
of LodgeNet are entitled pursuant to the transaction; and (c) in the event of any other change in
the capitalization of LodgeNet, the Committee, in its sole discretion, shall provide for an
equitable adjustment in the number of shares of Common Stock then subject to the Plan and to each
share of Common Stock then subject to an Award granted under the Plan. In the event of any such
adjustment, the exercise price per share shall be proportionately adjusted. Adjustments to this
Section 4.2 shall be made by the Plan Administrator whose decision as to the amount and timing of
any such adjustment shall be conclusive and binding on all persons.

Section 5. Grant of Options to Non-Employee Directors.

     5.1 Grants. Each individual who becomes a Non-Employee Director of LodgeNet shall, if the
Plan Administrator so determines, be granted an Award on the date of his or her initial election or
appointment to the Board and may also receive an Award on each anniversary of such election.
Non-Employee Directors shall also be eligible to receive discretionary Awards as determined by the
Plan Administrator from time to time.

-3-

 

     5.2 Exercise Price and Period. The per share exercise price of each NSO granted to a
Non-Employee Director shall be the Fair Market Value (as defined below), on the date on which the
NSO is granted, of the Common Stock subject to the NSO.

     In addition to the terms and conditions set forth in this Section 5, NSOs also shall be
subject to such terms and conditions applicable to Options according to Sections 6.2, 6.3, 6.4, 6.5
and 8, provided, however, such additional terms and conditions are not inconsistent with the terms
and conditions set forth in this Section 5.

     5.3 Payment of Non-Employee Directors’ Fees in Common Stock.

     A Non-Employee Director shall receive fifty percent (50%) of his or her annual retainer
payments from LodgeNet in the form of shares of Common Stock. The grants described in Section 5.1
of the Plan shall not be counted towards the fifty percent (50%) in this Section 5.3.

Section 6. Grants of Options to Employees.

     6.1 Grant. Subject to the terms of the Plan, the Plan Administrator may from time to time
grant Options, which may be ISOs or NSOs, to Employees of LodgeNet. Unless otherwise expressly
provided at the time of the grant, Options granted under the Plan to Employees will be ISOs.

     6.2 Option Agreement. Each Option shall be evidenced by a written Option Agreement specifying
the type of Option granted, the exercise price, the terms for payment of the exercise price, the
expiration date of the Option, the number of shares of Common Stock to be subject to each Option,
the time frame in which an Option shall become vested and exercisable, the circumstances under
which an Option which has not become vested and exercisable can be forfeited, the circumstances
under which an Option which has not become vested and exercisable can become immediately vested and
exercisable, the effect on any outstanding Options of an Employee’s termination of employment with
LodgeNet, and such other terms and conditions established by the Plan Administrator, in its sole
discretion, not inconsistent with the Plan.

     6.3 Expiration. Except to the extent otherwise provided in an Option Agreement, each Option
shall expire, and all rights to purchase shares of Common Stock shall expire, on the tenth
anniversary of the date on which the Option was granted.

     6.4 Required Terms and Conditions of ISOs. Each ISO granted to an Employee shall be in such
form and subject to such restrictions and other terms and conditions as the Plan Administrator may
determine, in its sole discretion, at the time of grant, subject to the general provisions of the
Plan, the applicable Option Agreement, and the following specific rules:

     (a) Except as provided in Section 6.4(c), the per share exercise price of each
ISO shall be the Fair Market Value of the shares of Common Stock on the date such
ISO is granted.

-4-

 

     (b) The aggregate Fair Market Value (determined with respect to each ISO at the
time such Option is granted) of the shares of Common Stock with respect to which
ISOs are exercisable for the first time by an individual during any calendar year
(under all incentive stock option plans of LodgeNet) shall not exceed $100,000. If
the aggregate Fair Market Value (determined at the time of grant) of the Common
Stock subject to an Option, which first becomes exercisable in any calendar year
exceeds the limitation of this Section 6.4(b), so much of the Option that does not
exceed the applicable dollar limit shall be an ISO and the remainder shall be a NSO;
but in all other respects, the original Option Agreement shall remain in full force
and effect.

     (c) Notwithstanding anything herein to the contrary, if an ISO is granted to an
individual who owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of LodgeNet, within the meaning of
Section 422(b)(6) of the Code, (i) the exercise price of each share of Common Stock
subject to the ISO shall be not less than one hundred ten percent (110%) of the Fair
Market Value of the Common Stock on the date the ISO is granted, and (ii) the ISO
shall expire and all rights to purchase shares thereunder shall cease no later than
the fifth anniversary of the date the ISO was granted.

     (d) No ISOs may be granted under the Plan after May 13, 2013.

     6.5 Required Terms and Conditions of NSOs. Each NSO granted to an Employee shall be in such
form and subject to such restrictions and other terms and conditions as the Plan Administrator may
determine, in its sole discretion, at the time of grant, subject to the general provisions of the
Plan and the applicable Option Agreement; provided, however, that the per share exercise price of
each NSO shall not be less than the Fair Market Value of the shares of Common Stock on the date
such NSO is granted.

     6.6 “Fair Market Value.” Unless modified by the Plan Administrator, for purposes of the Plan,
including but not limited to the grant of Non-Option Stock Appreciation Rights and Option
Appreciation Rights, and any Option Agreement, “Fair Market Value” shall mean the higher of the
average of the closing price for the Common Stock at the close of trading as reported by the NASDAQ
stock market (or such other stock market or exchange on which LodgeNet’s securities may be traded)
for the ten consecutive trading days immediately preceding such given date or the closing price for
the Common Stock as so reported for the day on which a grant is made. If no trades occur on such
given date, the closing price for the last preceding day on which trading occurred will be used as
the closing price for that date. Notwithstanding any provision of the Plan to the contrary, no
determination made with respect to the Fair Market Value of Common Stock subject to an ISO shall be
inconsistent with Section 422 of the Code or Regulations issued thereunder.

Section 7. Expiration of Options Granted to Employees; Termination of Employment, Disability,
Death, Retirement, or Occurrence of Specified Events.

-5-

 

     (a) General Rule. Except with respect to Options expiring pursuant to
subsection 7(b), (c) or (d) below, each Option granted to an Employee shall expire
on the expiration date or dates set forth in the applicable Option Agreement. Each
Option expiring pursuant to subsection 7(b), (c) or (d) below shall expire on the
date set forth in subsection 7(b), (c) or (d) notwithstanding any restrictions and
conditions that may be contained in an Employee’s Option Agreement.

     (b) Expiration Upon Termination of Employment. An Option granted to an
Employee shall expire on the first to occur of (i) the applicable date or dates
determined pursuant to subsection 7(a) or (ii) the date that the employment of the
Employee with LodgeNet terminates for any reason other than death or disability
pursuant to subsection 7(c) or retirement pursuant to subsection 7(d).
Notwithstanding the preceding provisions of this subsection 7(b), the Plan
Administrator, in its sole discretion, may permit an Employee (i) to exercise an
Option that is exercisable immediately prior to the termination of employment,
notwithstanding any restrictions and conditions that may be contained in his or her
Option Agreement, during a period not to exceed ninety days following his or her
termination of employment, and/or (ii) to exercise an Option that becomes
exercisable after termination of employment and prior to the termination of such
ninety-day period, during such period. In no event, however, may the Plan
Administrator permit such Employee to exercise an Option under this subsection 7(b)
after the expiration date or dates set forth in the applicable Option Agreement and
in no event may the unvested portion of an Option be exercised during such period.

     (c) Expiration Upon Disability or Death. If the employment of an Employee with
LodgeNet terminates by reason of disability (as determined by the Plan
Administrator) or death, his or her unexpired Options or portions thereof, if any,
held on the date of disability or death that would expire pursuant to the terms of
his or her Option Agreement during the twelve month period commencing on the date of
disability or death, shall expire on the last day of such twelve-month period.
During such twelve-month period, any such Option or portion thereof referred to in
the preceding sentence may be exercised by such Employee, or pursuant to Section
12.2, with respect to the same number of shares and in the same manner and to the
same extent as if the Employee had continued as a full-time employee of LodgeNet
during such twelve-month period; provided, that the Employee may not exercise any
Option or portion thereof which has not vested prior to or during such twelve-month
period. Any unexpired Option or portion thereof held by the Employee on the date of
disability or death, that would expire pursuant to the terms of his or her Option
Agreement on a date more than twelve months after the date of disability or death,
shall expire unexercised on the date of disability or death.

     (d) Expiration Upon Retirement. If the employment of an Employee with LodgeNet
terminates due to retirement under any qualified retirement plan maintained by
LodgeNet, his or her Option shall expire on the earlier to occur of (i) the
applicable expiration date or dates set forth in the applicable Option

-6-

 

Agreement(s) or (ii) the third anniversary of the date of such termination of
employment. If an Employee who has so retired dies prior to exercising in full an
Option that has not expired pursuant to the preceding sentence, then notwithstanding
the preceding sentence, such Option shall expire on the first anniversary of the
date of the Employee’s death. During the period commencing on the date of
retirement or death, as the case may be, and ending on the applicable later
expiration date, the Options may be exercised by such Employee with respect to the
same number of shares and in the same manner and to the same extent as if the
Employee had continued as a full-time employee of LodgeNet during such period;
provided, that no Option or portion thereof which has not vested prior to or during
such period may be exercised.

Section 8. Exercise of Options.

     8.1 Notice. A person entitled to exercise an Option may do so by delivery of a written notice
to that effect specifying the number of shares of Common Stock with respect to which the Option is
being exercised and any other information the Plan Administrator may prescribe. The notice shall
be accompanied by payment as described in Section 8.2. The notice of exercise shall be accompanied
by the Optionee’s copy of the writing or writings evidencing the grant of the Option. All notices
or requests provided for herein shall be delivered to the Corporate Secretary of LodgeNet.

     8.2 Exercise Price. Except as otherwise provided in the Plan or in any Option Agreement, the
Participant shall pay the exercise price of the shares of Common Stock upon exercise of any Option:
(a) in cash; (b) in cash received from a broker-dealer to whom the Participant has submitted an
exercise notice consisting of a fully endorsed Option (however, in the case of an Participant
subject to Section 16 of the Exchange Act, this payment option shall only be available to the
extent such person complies with Regulation T issued by the Federal Reserve Board); (c) by
delivering (either actual delivery or by attestation procedures established by LodgeNet) previously
owned shares of Common Stock (which the Participant has held for at least six months prior to the
delivery of such shares or which the Participant purchased on the open market and in each case for
which the Participant has good title, free and clear of all liens and encumbrances) having an
aggregate Fair Market Value on the date of exercise equal to the exercise price; (d) by directing
LodgeNet to withhold such number of shares of Common Stock otherwise issuable upon exercise of such
Option having an aggregate Fair Market Value on the date of exercise equal to the exercise price;
(e) by agreeing to surrender Options then exercisable valued at the excess of the aggregate Fair
Market Value of the shares of Common Stock subject to such Options on the date of exercise over the
aggregate exercise price of such shares; (f) by such other medium of payment as the Plan
Administrator, in its discretion, shall authorize at the time of grant; or (g) by any combination
of (a), (b), (c), (d) (e) and (f). In the case of an election pursuant to (a) or (b) above, cash
shall mean cash or a check issued by a federally insured bank or savings and loan, and made payable
to LodgeNet. LodgeNet shall issue, in the name of the Participant, stock certificates representing
the total number of shares of Common Stock issuable pursuant to the exercise of any Option as soon
as reasonably practicable after such exercise, provided that any shares of Common Stock purchased
by an Participant through a broker-dealer pursuant to clause (b) above shall be
delivered to such broker-dealer in accordance with 12 C.F.R. § 220.3(e)(4) or other applicable
provision of law.

-7-

 

Section 9. Stock Appreciation Rights.

     The Plan Administrator may grant either Non-Option Stock Appreciation Rights or Option Stock
Appreciation Rights as outlined below.

     9.1 Grant of Non-Option Stock Appreciation Rights. If an Award is designated by the Plan
Administrator as a Non-Option Stock Appreciation Right, the value of such Non-Option Stock
Appreciation Right shall be related to the appreciation in the value of the Common Stock. If any
Non-Option Stock Appreciation Rights awarded under the Plan shall be forfeited or canceled, such
Non-Option Stock Appreciation Rights may again be awarded under the Plan. Non-Option Stock
Appreciation Rights shall be granted at such time or times and shall be subject to such terms and
conditions, in addition to the terms and conditions set forth in the Plan, as the Plan
Administrator shall determine.

     The receipt of the value of Non-Option Stock Appreciation Rights may be contingent upon either
performance or employment standards as determined by the Committee.

     9.2 Non-Option Stock Appreciation Rights Agreements. Non-Option Stock Appreciation Rights
issued to an Employee under the Plan shall be governed by a Non-Option Stock Appreciation Rights
Agreement that shall set forth the performance or employment standards applicable to the award of
Non-Option Stock Appreciation Rights and such other provisions as the Plan Administrator shall
determine.

     9.3 Payment for Non-Option Stock Appreciation Rights. Except as otherwise set forth in a
Non-Option Stock Appreciation Rights Agreement, upon termination of employment of an Employee with
LodgeNet for any reason, the Employee shall be entitled to receive an amount in a lump sum cash
payment equal to the number of Non-Option Stock Appreciation Rights Units granted to him with
respect to which the applicable employment and/or performance standards have been satisfied,
multiplied by the Fair Market Value of a share of Common Stock of LodgeNet determined pursuant to
the provisions of Section 6.6.

     9.4 Grant of Option Stock Appreciation Rights. Option Stock Appreciation Rights (“SARs”) will
be granted, if at all, at the time of granting of an Option and may be granted either in addition
to the related Option (“Nontandem SAR”) or in tandem with the related Option (“Tandem SAR”). At
the time of grant of a Nontandem SAR, the Plan Administrator shall specify the base price of Common
Stock to be used in connection with the calculation described in Section 9.5 below. The base price
of a Nontandem SAR shall be 100% of the Fair Market Value of a share of Common Stock on the date of
grant. The number of shares of Common Stock subject to a Tandem SAR shall be one for each share of
Common Stock subject to the Option. The number of shares of Common Stock subject to a Nontandem
SAR shall be one for each share of Common Stock subject to the Option. No Tandem SAR may be
granted to an Employee in connection with an ISO in a
manner that will disqualify the ISO under Section 422 of the Code unless the Employee consents
thereto.

-8-

 

     9.5 Value of SARs. Upon exercise, a SAR shall entitle the Employee to receive from LodgeNet
the number of shares of Common Stock having an aggregate Fair Market Value equal to the following:

     (a) in the case of a Nontandem SAR, the excess of the Fair Market Value of one share of
Common Stock as of the date on which the SAR is exercised over the base price specified in
such SAR, multiplied by the number of shares of Common Stock then subject to the SAR, or the
portion thereof being exercised.

     (b) in the case of a Tandem SAR, the excess of the Fair Market Value of one share of
Common Stock as of the date on which the SAR is exercised over the exercise price per share
specified in such Option, multiplied by the number of shares then subject to the Option, or
the portion thereof as to which the SAR is being exercised.

     Cash shall be delivered in lieu of any fractional shares. The Committee, in its discretion,
shall be entitled to cause LodgeNet to elect to settle any part or all of its obligation arising
out of the exercise of an SAR by the payment of cash in lieu of all or part of the shares of Common
Stock it would otherwise be obligated to deliver in an amount equal to the Fair Market Value of
such shares on the date of exercise.

     9.6 Exercise of Tandem SARs. A Tandem SAR shall be exercisable during such time, and be
subject to such restrictions and conditions and other terms, as the Plan Administrator shall
specify in the applicable Option Agreement at the time such Tandem SAR is granted. Notwithstanding
the preceding sentence, the Tandem SAR shall be exercisable only at such time as the Option to
which it relates is exercisable and shall be subject to the restrictions and conditions and other
terms applicable to such Option. Upon the exercise of a Tandem SAR, the unexercised Option, or the
portion thereof to which the exercised portion of the Tandem SAR is related, shall expire. The
exercise of any Option shall cause the expiration of the Tandem SAR related to such Option, or
portion thereof, that is exercised.

     9.7 Exercise of Nontandem SARs.

     (a) A Nontandem SAR granted under the Plan shall be exercisable during such time, and
be subject to such restrictions and conditions and other terms, as the Plan Administrator
shall specify in the Option Agreement at the time the Nontandem SAR is granted, which
restrictions and conditions and other terms need not be the same for all Employees. Without
limiting the generality of the foregoing, the Plan Administrator may specify a minimum
number of full shares with respect to which any exercise of a Nontandem SAR must be made.

     (b) A Nontandem SAR granted under the Plan shall expire on the date specified by the
Plan Administrator in the Option Agreement, provided that such date shall not be
more than ten years after the date of grant. The Plan Administrator shall specify in
the Option Agreement at the time each Nontandem SAR is granted, the time during which the
Nontandem SAR may be exercised prior to its expiration and other provisions relevant to the

-9-

 

SAR. The Committee, in its discretion, shall have the power to accelerate the dates for
exercise of any or all Nontandem SARs or any part thereof, granted under the Plan.

     9.8 Parties Entitled to Exercise SARs. A SAR may be exercised only by the Employee (or by a
legatee or legatees of such SAR under his last will, by his executors, personal representatives or
distributees, or by an assignee or assignees pursuant to Section 12 below).

     9.9 Settlement of SARs. As soon as is reasonably practicable after the exercise of an SAR,
LodgeNet shall (i) issue, in the name of the Employee, stock certificates representing the total
number of full shares of Common Stock to which the Employee is entitled pursuant to Section 9.5
hereof and cash in an amount equal to the Fair Market Value, as of the date of exercise, of any
resulting fractional shares, and (ii) if the Plan Administrator causes LodgeNet to elect to settle
all or part of its obligations arising out of the exercise of the SAR in cash, deliver to the
Employee an amount in cash equal to the Fair Market Value, as of the date of exercise, of the
shares of Common Stock it would otherwise be obligated to deliver.

Section 10. Restricted Stock Awards To Employees and Non-Employee Directors.

     The Plan Administrator may from time to time cause LodgeNet to grant shares of Restricted
Stock under the Plan to such Employees and Non-Employee Directors, and subject to such restrictions
and conditions and other terms, as the Plan Administrator may determine at the time of grant,
subject to the general provisions of the Plan, the applicable Restricted Stock Agreement, and the
following specific rules:

     10.1 Performance or Employment Standards. The restrictions applicable to Restricted Stock may
be based either on performance or employment or Board service standards. If the restrictions are
based upon the performance of LodgeNet, the performance standards shall relate to corporate or
business segment performance and may be established in terms including but not limited to growth of
gross revenue, cash flow, earnings per share, return on assets, increase in the market price of
LodgeNet’s common stock, or return on investment or utilization of assets. Multiple standards may
be used and may have the same or different weighting and may relate to absolute performance or
relative performance as measured against comparable companies.

     10.2 Restricted Stock Agreements. Shares of Restricted Stock issued to an Employee or
Non-Employee Director under the Plan shall be governed by a Restricted Stock Agreement which shall
set forth the restrictions applicable to the Award of Restricted Stock and such other provisions as
the Plan Administrator shall determine.

     10.3 Issuance of Restricted Stock. LodgeNet shall issue, in the name of the Employee or
Non-Employee Director, stock certificates representing the total number of shares of Restricted
Stock granted to the Employee or Non-Employee Director, as soon as may be reasonably practicable
after such grant, which shall be held by the Corporate Secretary of LodgeNet as provided in
Section 10.7 hereof.

-10-

 

     10.4 Rights of Stockholders. Subject to the provisions of Sections 10.3 and 10.5 hereof and
Section 11.2, and the restrictions set forth in the related Restricted Stock Agreement, the
Employee or Non-Employee Director receiving a grant shall thereupon be a stockholder with respect
to all of the shares represented by such certificate or certificates and shall have the rights of a
stockholder with respect to such shares, including the right to vote such shares and to receive
dividends and other distributions paid with respect to such shares.

     10.5 Restrictions; Forfeiture. Any share of Restricted Stock granted to an Employee or
Non-Employee Director pursuant to the Plan shall be forfeited, and such shares shall revert to
LodgeNet, if (i) the Employee or Non-Employee Director violates a non-competition or
confidentiality agreement or other condition set forth in the Restricted Stock Agreement, (ii) the
Employee’s employment with LodgeNet, or the service of the Non-Employee Director on the Board,
terminates prior to a date or dates for expiration of the forfeiture, (iii) the date on which
performance standards set forth in the Restricted Stock Agreement fail to be satisfied, or (iv) the
date there occurs a violation of any provision of the Restricted Stock Agreement. LodgeNet shall
require a forfeiture of Restricted Stock pursuant to this Section 10.5, by giving notice to the
Employee or Non-Employee Director at any time within the 30-day period following the applicable
date of forfeiture. Upon receipt of such notice, the Corporate Secretary of LodgeNet shall
promptly cancel shares of Restricted Stock that are forfeited to LodgeNet.

     10.6 Acceleration. The Plan Administrator, in its discretion, shall have the power to
accelerate the date on which the restrictions of this Section 10 or contained in any Restricted
Stock Agreements shall lapse with respect to any or all shares of Restricted Stock granted under
the Plan.

     10.7 Restricted Stock Certificates. The Corporate Secretary of LodgeNet shall hold the
certificate or certificates representing shares of Restricted Stock issued under the Plan on behalf
of each Participant who holds such shares until such time as the Restricted Stock is forfeited or
the restrictions lapse.

     10.8 Terms and Conditions. The Plan Administrator may prescribe such other restrictions and
conditions and other terms applicable to the shares of Restricted Stock issued to an Employee or
Non-Employee Director under the Plan that are neither inconsistent with nor prohibited by the Plan
or any Restricted Stock Agreement, including, without limitation, terms providing for a lapse of
the restrictions of this Section 10 or in any Restricted Stock Agreement, in installments.

Section 11. Terms and Conditions of Awards.

     11.1 Each Participant shall agree to such restrictions and conditions and other terms in
connection with the grant and exercise of an Award, including restrictions and conditions on the
disposition of the Common Stock acquired upon the exercise, grant or sale thereof, as the Plan
Administrator may deem appropriate and as is set forth in the applicable Award Agreement. The
certificates delivered to a Participant or to the Corporate Secretary of LodgeNet evidencing the
shares of Common Stock acquired upon exercise of an Award may, and upon the grant of
Restricted Stock to an Employee or Non-Employee Director shall, bear a legend referring to the
restrictions and conditions and other terms contained in the respective Award Agreement and the
Plan, and LodgeNet

-11-

 

may place a stop transfer order with its transfer agent against the transfer of
such shares. If requested to do so by the Plan Administrator at the time of exercise of an Option
or sale of Restricted Stock, each Participant shall execute a written instrument stating that he is
purchasing the Common Stock for investment and not with any present intention to sell the same.

     11.2 The obligation of LodgeNet to sell and deliver Common Stock under the Plan shall be
subject to all applicable laws, regulations, rules and approvals, including, but not by way of
limitation, the effectiveness of a registration statement under the Securities Act of 1933, as
amended (the “Act”), if deemed necessary or appropriate by the Committee, of the Common Stock,
Options, SARs, Restricted Stock, and other securities reserved for issuance or that may be offered
under the Plan.

Section 12. Nontransferability.

     12.1 Except in connection with unrestricted Common Stock issued pursuant to an Award, Awards
granted under the Plan and any rights and privileges pertaining thereto, may not be transferred,
assigned, pledged or hypothecated in any manner, by operation of law or otherwise, other than by
will or by the laws of descent and distribution and shall not be subject to execution, attachment
or similar process. The granting of an Award shall impose no obligation upon the applicable
Participant to exercise such Award.

Section 13. Rights as Shareholder.

     A Participant or an assignee of a Participant pursuant to Section 12 shall have no rights as a
shareholder with respect to any Common Stock covered by an Award or receivable upon the exercise of
an Award until the Participant or transferee shall have become the holder of record of such Common
Stock, and, except as provided in Section 14, no adjustments shall be made for dividends in cash or
other property or other distributions or rights in respect to such Common Stock for which the
record date is prior to the date on which the Participant shall have in fact become the holder of
record of the shares of Common Stock acquired pursuant to the Award.

Section 14. Postponement of Exercise.

     The Plan Administrator may postpone any exercise of an Award for such time as the Plan
Administrator in its sole discretion may deem necessary in order to permit LodgeNet (a) to effect,
amend or maintain any necessary registration of the Plan or the shares of Common Stock issuable
upon the exercise of an Award under the Act, or the securities laws of any applicable jurisdiction,
(b) to permit any action to be taken in order to (i) list such shares of Common Stock on a stock
exchange if shares of Common Stock are then listed on such exchange or (ii) comply with
restrictions or regulations incident to the maintenance of a public market for shares of Common
Stock, including any rules or regulations of any stock exchange on which the shares of Common
Stock are listed, or (c) to determine that such shares of Common Stock and the Plan are exempt
from such registration or that no action of the kind referred to in (b)(ii) above needs to be
taken; and LodgeNet shall not be obligated by virtue of any terms and conditions of any Award or
any provision of the Plan to

-12-

 

recognize the exercise of an Award or to sell or issue shares of
Common Stock in violation of the Act or the law of any government having jurisdiction thereof. Any
such postponement shall not extend the term of an Award and neither LodgeNet nor its directors or
officers shall have any obligation or liability to a Participant, to the Participant’s successor or
assignee, or any other person, with respect to any shares of Common Stock as to which the Award
shall lapse because of such postponement.

Section 15. Withholding Taxes.

     Whenever LodgeNet proposes or is required to issue or transfer shares of Common Stock to a
Participant under the Plan, LodgeNet shall have the right to require the Participant to remit to
LodgeNet an amount sufficient to satisfy all federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such shares. If such certificates
have been delivered prior to the time a withholding obligation arises, LodgeNet shall have the
right to require the Participant to remit to LodgeNet an amount sufficient to satisfy all federal,
state or local withholding tax requirements at the time such obligation arises and to withhold from
other amounts payable to the Participant, as compensation or otherwise, as necessary. Whenever
payments under the Plan are to be made to a Participant in cash, such payments shall be net of any
amounts sufficient to satisfy all federal, state and local withholding tax requirements. In
connection with an Award in the form of shares of Common Stock, a Participant may elect to satisfy
his tax withholding obligation incurred with respect to the Taxable Date (as defined below) of the
Award by (a) directing LodgeNet to withhold a portion of the shares of Common Stock otherwise
distributable to the Participant, or (b) by transferring to LodgeNet a certain number of shares
(either subject to a Restricted Stock Award or previously owned), such shares being valued at the
Fair Market Value thereof on the Taxable Date. Notwithstanding any provisions of the Plan to the
contrary, a Participant’s election pursuant to the preceding sentence (a) must be made on or prior
to the Taxable Date with respect to such Award, and (b) must be irrevocable. In lieu of a separate
election on each Taxable Date of an Award, a Participant may make a blanket election with the Plan
Administrator that shall govern all future Taxable Dates until revoked by the Participant. If the
holder of shares of Common Stock purchased in connection with the exercise of an ISO disposes of
such shares within two years of the date such an ISO was granted or within one year of such
exercise, he shall notify LodgeNet of such disposition and remit an amount necessary to satisfy
applicable minimum withholding requirements including those arising under federal income tax laws.
If such holder does not remit such amount, LodgeNet may withhold all or a portion of any salary or
other amounts then or in the future owed to such holder as necessary to satisfy such minimum
requirements. Taxable Date means the date a Participant recognizes income with respect to an Award
under the Code or any applicable state or local income tax law.

-13-

 

Section 16. Leave of Absence.

     The Plan Administrator shall be entitled to make such rules, regulations and determinations as
it deems appropriate under the Plan in respect of any leave of absence taken by any Participant.
Without limiting the generality of the foregoing, the Plan Administrator shall be entitled to
determine (i) whether or not any such leave of absence shall constitute a termination of employment
or service on the Board within the meaning of the Plan, and (ii) the impact, if any, of any such
leave of absence on Awards under the Plan theretofore granted to any Participant who takes such
leave of absence.

Section 17. Termination or Amendment of Plan.

     The Plan Administrator may correct any defect or supply an omission or reconcile any
inconsistency in the Plan or in any Award granted hereunder in the manner and to the extent it
shall deem desirable, in its sole discretion, to effectuate the Plan. The Plan Administrator may
only materially alter or suspend the Plan or any Award granted hereunder or terminate the Plan
without further action on the part of the shareholders of LodgeNet to the extent permitted by law,
regulation, and stock exchange or interdealer quotation system requirements. With respect to ISOs,
the Plan Administrator may not effect a change inconsistent with Section 422 of the Code or
regulations issued thereunder.

     No amendment or termination of the Plan shall in any manner affect any Award theretofore
granted without the consent of the Participant, except that the Plan Administrator may amend the
Plan in a manner that does affect Awards theretofore granted upon a finding by the Plan
Administrator that such amendment is in the best interest of holders of outstanding Awards affected
thereby.

Section 18. Effective Date.

     The Plan shall be effective upon the date of approval of the Plan by an affirmative vote of a
majority of the shares of the voting stock of LodgeNet entitled to be voted by the holders of stock
represented at a duly held shareholders’ meeting, within 12 months after the date of adoption of
the Plan by the Board.

Section 19. Requirements of Law.

     The granting of Awards under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national securities exchanges or
national securities associations as may be required, including, but not limited to, the
requirements of Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes Act”) relating to the
mandatory forfeiture of certain incentive-based and equity-based compensation, which may also be
Awards under the Plan, by an issuer’s (as that term is defined in the Sarbanes Act) chief executive
officer and chief financial officer.

-14-

 

Section 20. Governing Law.

     The Plan and all agreements hereunder shall be construed in accordance with and governed by
the laws of the State of South Dakota, to the extent not inconsistent with Section 422 of the Code.

Section 21. Notice.

     Every direction, revocation or notice authorized or required by the Plan shall be deemed
delivered to LodgeNet (a) on the date it is personally delivered to the Corporate Secretary of
LodgeNet at its principal executive offices or (b) three business days after it is sent by
registered or certified mail; postage prepaid, addressed to the Corporate Secretary at such
offices; and shall be deemed delivered to a Participant or assignee (a) on the date it is
personally delivered to him or (b) three business days after it is sent by registered or certified
mail, postage prepaid, or (c) one business day after it is sent by a nationally recognized
overnight courier service, such as Federal Express, in each of (b) and (c), addressed to him at the
last address shown on the records of LodgeNet.

Section 22. Successors.

     In the event of a sale of substantially all of the assets of LodgeNet, or a merger,
consolidation or share exchange involving LodgeNet, or a change of control reportable under Item 1
of Form 8-K, the Board may, in its sole discretion, do any of the following or a combination
thereof: 1) terminate the Plan and cash out vested Awards; 2) provide for the successor to assume
all Awards and credit all service or provide for all vested Awards under this Plan to be exchanged
for equivalent Awards under an incentive plan of the successor; or 3) accelerate the vesting of any
non-vested Awards at the time of a transaction described in this Section.

Section 23. Indemnification of the Plan Administrator.

     In addition to such other rights of indemnification as they may have as members of the Board,
or as individuals serving as members of the Plan Administrator, the members of the Plan
Administrator shall be indemnified by LodgeNet against (a) the reasonable expenses (as such
expenses are incurred), including attorneys’ fees actually and necessarily incurred in connection
with the defense of any action, suit or proceeding (or in connection with any appeal therein), to
which they or any of them may be a party by reason of any action taken or failure to act under or
in connection with the Plan, or any Award granted hereunder; and (b) against all amounts paid by
them in settlement thereof (provided such settlement is approved by independent legal counsel
selected by LodgeNet) or paid by them in satisfaction of a judgment in such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Plan Administrator member is liable for gross negligence or misconduct in the
performance of his duties; provided that within 60 days after institution of such action, suit or
proceeding a Plan Administrator member shall in writing offer LodgeNet the opportunity, at its own
expense, to handle and defend the same.

-15-

 

Section 24. No Contract of Employment or Service on the Board.

     Neither the adoption of the Plan, nor the amendment and the restatement of the Plan, nor the
grant of any Award shall be deemed to obligate LodgeNet to continue the employment or service on
the Board of any Participant for any particular period, nor shall the granting of an Award
constitute a request or consent to postpone the retirement date of any Participant.

Section 25. Gender.

     Except when otherwise required by the context, any masculine terminology in this document
shall include the feminine, and any singular terminology shall include the plural.

Section 26. Forms.

     The Plan Administrator shall approve the forms, and terms, of all Awards granted under this
Plan.

-16-exv10w14

 

EXHIBIT 10.14

TERMINATION AGREEMENT AND RELEASE 

     This Termination Agreement and Release (the “Agreement”) is entered into between ZipRealty,
Inc. (the “Company”), on the one hand and Eric A. Danziger (the “Executive”) on the other hand with
reference to the following facts:

WHEREAS:

     Executive was employed by the Company.

     On or about April 27, 2001, Executive and Company entered into an Employment Agreement.

     On or about June 6, 2001, Executive and Company entered into an Executive Proprietary
Information Agreement (the “Confidentiality Agreement”).

     Company and Executive have entered into stock option agreements dated June 1, 2001, March 6,
2002, March 29, 2004, January 3, 2006, December 16, 2004, and January 3, 2006 (collectively, the
“Stock Option Agreements”), 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. A schedule of
Executive’s Options is attached hereto as Exhibit B.

     On or about May 2, 2006, Executive and Company decided that Executive’s employment with
Company would be terminated effective August 1, 2006 (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 Company agrees to pay Executive the equivalent of his base salary in the amount of
$28,437.50 per month, less applicable withholding, for six months. The first payment will be made
on the first regular payroll date following the Termination Date and will continue, thereafter, in
accordance with the Company’s regular payroll practices, for six months (the “Payment Period”).
During the Payment Period, Executive will not be entitled to accrual of any Executive benefits.
Executive agrees that during the Payment Period, he will not solicit or recruit any Company
Executive, employee, consultant or independent contractor on behalf of himself or any other person
or entity. Executive also agrees that during the Payment Period, he will not act as a consultant,

 

 

Executive, independent contractor, or serve as a board member with a Competitor of Company.
For purposes of this Agreement, “Competitor” is defined as any corporation, partnership or entity
that provides or that is actively exploring the opportunity to provide on-line real estate
brokerage services. Competitors include, but are not limited to those companies identified in
writing between Company and Executive

     (b)   Upon the final date of Executive’s employment with Company, he will be paid all accrued,
unused vacation. Executive acknowledges and agrees that, by this payment pursuant to subsection
(a), he will have received from Company each and all of the employment benefits, compensation,
wages, vacation pay, and other monies due and owing to him from Company.

     (c)   Executive’s health insurance benefits will cease on the Termination Date, subject to
Executive’s right to continue his health insurance under COBRA. 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)   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.

     (e)   Executive’s Options will continue to remain outstanding in accordance with the terms and
conditions of the Plans under which they were granted and the Stock Option Agreements.

     2.     Executive agrees that on the Termination Date, Executive will execute a Supplemental
Separation Agreement and Release of Claims identical in form and content to the Supplemental
Separation Agreement and Release of Claims attached hereto as Exhibit A. Upon Executive’s
execution of the Supplemental Separation Agreement, Company will pay Executive the consideration
set forth in Section 1 therein.

     3.     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 (the “Releasees”) and owed
to Company 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 Releasees and Company does hereby fully and forever release and discharge the Executive of and
from, and agrees 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 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 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, 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; and any and all applicable Arizona laws,
regulations or statutes.
	 
	 	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 obligations incurred under this Agreement.

 

 

     4.     Executive represents that he is not aware of any claim by him other than the claims that
are released by this Agreement. Executive acknowledges that he 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, being aware of said code section, agrees to expressly waive any rights he may
have under the above principal or any statute or common law principals of similar effect.

     5.     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;
	 
	 	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 authorized
by federal law.

     6.     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.

     7.     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”).

 

 

     8.     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 before the American Arbitration Association under its
National Rules for the Resolution of Employment Disputes of California Code of Civil Procedure.
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.

     9.     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.

     10.     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.

     11.     This Agreement shall be governed by and construed under the laws of the State of
California.

     12.     This Agreement may be executed by facsimile and in counterparts, and the counterparts,
taken together, shall constitute the original.

     13.     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.

 

 

     14.     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:  May 15, 2006 	/s/ Eric A Danziger
 	 
	 	Eric A. Danziger 	 
	 	 	 
	 

	 	 	 	 	 
	    DATED:  May 10, 2006 	ZipRealty, Inc.

 	 
	 	By:  	/s/ Donald F. Wood
 	 
	 	 	Name:  	Donald F. Wood 	 
	 	 	Title:  	Chairman of the Board 	 
	 

 

 

EXHIBIT A

SUPPLEMENTAL TERMINATION AGREEMENT AND RELEASE 

     This Supplemental Termination Agreement and Release (the “Agreement”) is entered into between
ZipRealty, Inc. (the “Company”), on the one hand and Eric Danziger (the “Executive”) on the other
hand with reference to the following facts:

WHEREAS:

     Executive was employed by the Company.

     On or about April 27, 2001, Executive and Company entered into an Employment Agreement.

     On or about June 6, 2001, Executive and Company entered into an Executive Proprietary
Information Agreement (the “Confidentiality Agreement”).

     Company and Executive have entered into stock option agreements dated June 1, 2001, March 6,
2002, March 29, 2004, January 3, 2006, December 16, 2004, and January 3, 2006 (collectively, the
“Stock Option Agreements”), granting Executive the option to purchase shares of the Company’s
common stock (each an “Option” and 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. A
schedule of Executive’s Options is attached to Executive’s Termination Agreement as Exhibit B.

     On or about May 2, 2006, Executive and Company decided that Executive’s employment with
Company would be terminated effective August 1, 2006 (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 Options will immediately vest and become exercisable as to the number of shares
subject to such Options that would have otherwise vested in accordance with the vesting schedules
set forth in the Stock Option Agreements as if Executive had remained employed by the Company for
one year following the Termination Date without taking into account any provisions in the Plans or
the Stock Option Agreements providing for the acceleration of vesting under any circumstances.
Executive agrees that as of one year following the Termination date he will have vested in
1,378,962 Options.

 

 

     (b)   Subject to any earlier termination of the Options that may be required by Section 12(c) of
the 1999 Plan or Section 13(c) of the 2004 Plan, as applicable, Executive shall be permitted to
exercise all vested Options (including Options that vest pursuant to subsection (a)) through
December 31, 2006.

     (c)   Beyond the amendments to the Options as provided for in subsections (a) and (b), the
Options will remain subject to the terms and conditions of the Plans under which they were granted
and the Stock Option Agreements.

     (d)   Executive acknowledges and agrees that, by this payment pursuant to subsections (a) and
(b), he will have received from Company each and all of the employment benefits, compensation,
wages, vacation pay, and other monies due and owing to him from Company.

     (e)   Executive’s health insurance benefits ceased on the Termination Date, subject to
Executive’s right to continue his health insurance under COBRA. Executive’s participation in all
other benefits and incidents of employment ceased on the Termination Date. Executive ceased
accruing Executive benefits, including but not limited to, vacation time and paid time off, as of
the Termination Date, accept as set forth in sections 1(a) and 1(b) herein.

     (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 represents 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 (the “Releasees”).
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 Releasees of and from,
and agrees 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 Executive
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 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, 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; and any and all applicable Arizona laws, regulations or
statutes.
	 
	 	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 obligations incurred under this Agreement.

     3.     Executive represents that he is not aware of any claim by him other than the claims that
are released by this Agreement. Executive acknowledges that he 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, being aware of said code section, agrees to expressly waive any rights he 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;
	 
	 	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 authorized by federal law.

     5.     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.

     6.     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”).

     7.     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 before the American Arbitration Association under its
National Rules for the Resolution of Employment Disputes of California Code of Civil Procedure.
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.

     8.     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.

     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.

     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:  _________________, 2006 	 
 	 
	 	Eric A. Danziger 	 
	 	 	 
	 

	 	 	 	 	 
	  DATED:  _________________, 2006 	ZipRealty, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}]]