Form 10-Q ZILLOW GROUP, INC. For: Mar 31
Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (“Agreement”) is entered into as of January 29, 2018, by and between Arik Prawer (“Executive”) and Zillow, Inc., a Washington corporation (the “Company”).
RECITALS
A.The Company wishes to secure the services of Executive pursuant to the terms set forth in this Agreement.
B.Executive wishes to be employed by Company pursuant to the terms set forth in this Agreement.
C.The Company’s offer of employment pursuant to this Agreement is contingent upon Executive’s submission to, and successful completion of, the Company’s background check process.
D.The effective date of this Agreement shall be Executive’s first day of actual work for the Company (should that date come later in time than the date Executive signs this Agreement) (“Effective Date”).
E.The Company and Executive intend that, while his initial title under this Agreement will be Chief Business Development Officer, Executive will transition to the title of President of a future entity related to the Company within approximately twelve (12) months of the execution of this Agreement by both parties; provided that, Executive’s eventual title is also subject to change via mutual agreement between Company and Executive. Notwithstanding such transition, Executive’s employment shall continue to be governed by the terms of this Agreement.
1. | EMPLOYMENT |
Executive will report to the Company’s Chief Executive Officer. Subject to Section 3.4, changes may be made from time to time by the Company in its sole discretion to the duties, reporting relationships and title of Executive. Executive will perform the duties as are commensurate and consistent with Executive’s position and will devote Executive’s full working time, attention and efforts to the Company and to discharging the responsibilities of Executive’s position, and such other duties as may be assigned from time to time by the Company, which relate to the business of the Company and are reasonably consistent with Executive’s position (excluding periods of vacation, holidays, illness, incapacity and sick leave). During Executive’s employment, Executive will not engage in any business activity that, in the reasonable judgment of the Company’s Chief Executive Officer, conflicts with the duties of Executive under this Agreement, whether or not such activity is pursued for gain, profit or other advantage; notwithstanding the foregoing, Executive's continued board service with Western Property Fund, LLC and status as a limited partner in various investment funds previously identified by Executive to the Company are not in conflict with the duties of Executive under this Agreement. Executive agrees to comply with the Company’s standard policies and procedures, including the Company’s Confidential Information, Inventions, Nonsolicitation and Noncompetition
Agreement (“Confidentiality Agreement”) and Mutual Agreement to Arbitrate Claims (“Arbitration Agreement”), both of which are to be executed by Executive contemporaneously with Executive’s execution of this Agreement, and with all applicable laws and regulations.
2. | COMPENSATION AND BENEFITS |
The Company agrees to pay or cause to be paid to Executive, and Executive agrees to accept in exchange for the services rendered hereunder, the following compensation and benefits:
2.1 Annual Salary
Executive’s compensation shall consist of an annual base salary in the gross amount of Four Hundred Eighty-Six Thousand dollars ($486,000.00), payable in semi-monthly installments in accordance with the payroll practices of the Company and subject to customary deductions and withholdings (“Salary”). Executive’s Salary shall be reviewed, and shall be subject to change, by the Company’s Board of Directors (or the Compensation Committee thereof) at least annually while Executive is employed hereunder.
2.2 Signing Bonus
In connection with his hire and anticipated successful integration into the Company, Executive shall also receive a signing bonus in the gross amount of Seven Hundred Fifty Thousand dollars ($750,000.00) (“Signing Bonus”). The Company will pay the Signing Bonus to Executive in two installments. The first installment will be a lump sum payment in the gross amount of Five Hundred Thousand dollars ($500,000.00), less customary deductions and withholdings, made by the Company within thirty (30) days of the commencement of Executive’s initial employment with the Company. The second installment will be a lump sum payment in the gross amount of Two Hundred Fifty Thousand dollars ($250,000.00), less customary deductions and withholdings, made by the Company within thirty (30) days of the Executive’s completion of twelve (12) months of consecutive work for the Company, as measured from the Effective Date of this Agreement; provided that, the second installment of the Signing Bonus shall not be due or payable to Executive if he has been or is in the process of being terminated for Cause, or resigned or announced his intention to resign without Good Reason, by the date when the installment payment would otherwise be due. Payment of the Signing Bonus shall be made by direct deposit of the relevant installment into Executive’s bank account then on file with the Company.
2.3 Bonus and Equity Awards
Executive shall be eligible to participate in the Company’s incentive bonus plans as may be adopted from time to time by the Board of Directors (or the Compensation Committee thereof), subject to and in accordance with the terms and conditions of such plans. Subject to approval by the Board of Directors (or the Compensation Committee thereof), Executive shall be eligible to receive the following equity awards (“Awards”) under the Zillow Group Amended and Restated 2011 Incentive Plan (“Plan”):
(a) A nonqualified stock option for a number of shares of the Company’s Class C Capital Stock calculated by dividing $1,000,000 by the Black-Scholes-Merton value of an option on the Company’s Class C Capital Stock applying the valuation model inputs (i.e., expected volatility, expected dividend yield, risk-free interest rate, weighted-average expected life) used by the Company to value its stock options for financial reporting purposes for the fiscal quarter preceding the Effective Date, except that the current share price applied in the Black-Scholes-Merton model shall be equal to the average closing price of the Company’s Class C Capital Stock during the 30-day period preceding the Effective Date (the “Initial Option”). The Initial Option will have a ten (10)-year term (subject to earlier termination in the event of Executive’s termination of employment), a per share exercise price equal to the closing price of the Company’s Class C Capital Stock on the date of grant, and will vest in accordance with the following schedule: 1/4th of the total number of shares subject to the Initial Option shall vest on the one (1)-year anniversary of the Effective Date and an additional 1/16 shall vest quarterly thereafter over the next three (3) years. The Initial Option shall have the terms and conditions as set forth in a Nonqualified Stock Option Grant Notice and a Nonqualified Stock Option Agreement to be executed by Executive and the Company pursuant to the Plan.
(b) Restricted Stock Units for that number of shares of the Company’s Class C Capital Stock calculated by dividing $4,500,000 by the average closing price of the Company’s Class C Capital Stock on the sixty (60) trading days preceding the Effective Date (“Initial RSUs”), such Initial RSUs to vest and be settled in one (1) share of Class C Capital Stock for each share subject to the Initial RSUs in accordance with the following vesting schedule: 1/4th of the total number of Initial RSUs shall vest on the one (1)-year anniversary of the Effective Date, and an additional 1/16th of the Initial RSUs shall vest quarterly thereafter over the next three (3) years. The Initial RSUs shall have the terms and conditions as set forth in a Restricted Stock Unit Award Notice and a Restricted Stock Unit Award Agreement to be executed by Executive and the Company pursuant to the Plan.
(c) Vesting of the Awards shall be subject to Executive’s continued employment with the Company on an applicable vesting date. Awards shall be subject to applicable payroll taxes and withholding upon vesting or exercise of the Awards, as applicable, and shall be subject to the terms and conditions of individual agreements evidencing the Awards and the equity plan under which the Awards are granted. For the avoidance of doubt, any adjustments to the Initial Options and Initial RSUs shall be governed by Section 15 of the Plan and shall be consistent with adjustments made to other awards outstanding under the Plan held by the Company’s executive officers.
(d) Executive will be eligible to participate in the Company's 2018 year-end annual review process and will be eligible to receive annual equity awards beginning in calendar year 2019 and each subsequent year of employment. Executive shall be eligible to receive an annual equity award (beginning in calendar year 2019) in the aggregate amount of $2,000,000 per year, and Executive may elect to receive such annual equity award in the form of 100% restricted stock units, 100% nonqualified stock options or a combination of the two in 25% increments. The number of shares of capital stock of the
Company, or any successor company, underlying any elected restriction stock unit award, shall be determined by dividing (i) the portion of the $2,000,000 annual equity award elected by Executive to be in the form of a restricted stock unit award, by (ii) the average closing price of the Company’s capital stock during the 30-day period preceding January 15th of the applicable year, with any fractional share rounded to the nearest whole share (0.5 to be rounded up). The number of shares of the capital stock of the Company, or any successor company, underlying any elected nonqualified stock option, shall be determined using a Black-Scholes-Merton value applying the valuation model inputs (i.e., expected volatility, expected dividend yield, risk-free interest rate, weighted-average expected life) used by the Company to value its stock options for financial reporting purposes for the fiscal quarter preceding January 15th of the applicable year, except that the current share price applied in the Black-Scholes-Merton model shall be equal to the average closing price of the Company’s capital stock during the 30-day period preceding January 15th of such year, in an amount equal to the portion of the $2,000,000 annual equity award elected by Executive to be in the form of a nonqualified stock option award with any fractional share rounded to the nearest whole share (0.5 to be rounded up). The vesting schedule, grant date, exercise price and other terms of such annual equity awards shall be determined by the Company and generally shall be consistent with the Company’s equity award policies and practices with respect to individuals serving in comparable positions receiving equity awards in connection with the annual review process.
2.4 Benefits
Executive shall be eligible to participate, subject to and in accordance with applicable eligibility requirements, in such employee benefit plans, policies, programs and arrangements as are generally provided to the Company’s other similarly situated executives, which shall include, at a minimum, basic health, dental and vision insurance.
2.5 Vacation and Other Paid Time Off Benefits
Each calendar year, Executive shall be entitled to that number of weeks of paid vacation per year equal to those provided to similarly situated executives of the Company, in accordance with the plans, policies, programs and arrangements of the Company applicable to similarly situated executives of the Company generally. Executive also shall be provided such holidays and sick leave as the Company makes available to all of its other employees.
3. | TERMINATION |
3.1 Employment At Will
Executive acknowledges and understands that employment with the Company is terminable at will and can be terminated by either party for no reason or for any reason not otherwise specifically prohibited by law. Nothing in this Agreement is intended to alter Executive’s at-will employment status or obligate the Company to continue to employ Executive for any specific period of time, or in any specific role or geographic location. Except as expressly provided for in this Agreement, upon any termination of employment, Executive shall not be entitled to receive any payments or benefits under this Agreement other than unpaid Salary earned through the date of termination and unused vacation that has accrued as of the date
of Executive’s termination of employment that would be payable under the Company’s standard policy (collectively, the “Accrued Obligations”).
3.2 Automatic Termination on Death or Total Disability
This Agreement and Executive’s employment hereunder shall terminate automatically upon the death or Total Disability of Executive. “Total Disability” shall mean a mental or physical impairment of Executive that is expected to result in death or that has lasted or is expected to last for a continuous period of twelve (12) months or more and that causes Executive (i) to be unable to perform his or her material duties for the Company, (ii) to be unable to engage in any substantial gainful activity, or (iii) to lose legal capacity. Executive and the Company hereby acknowledge that Executive’s ability to perform Executive’s duties is the essence of this Agreement. Termination hereunder shall be deemed to be effective (a) at the end of the calendar month in which Executive’s death occurs or (b) immediately upon a determination by the Board of Directors (or the Compensation Committee thereof) of Executive’s Total Disability. In the case of termination of employment under this Section 3.2, Executive shall not be entitled to receive any payments or benefits under this Agreement other than any Accrued Obligations and full accelerated vesting of any unvested outstanding Initial Option or Initial RSUs granted to Executive under Section 2.3(a) or Section 2.3(b) of this Agreement.
3.3 Termination for Cause; Resignation
The Company may terminate Executive’s services and this Agreement for Cause (as defined in Appendix A), effective immediately upon notice of termination. Upon termination of Executive’s employment for Cause, or upon Executive’s voluntary separation from Employment without Good Reason (as defined in Appendix A), all compensation described herein shall cease as of the termination date, and Executive shall have no rights to any other compensation or payments under this Agreement or otherwise, other than any Accrued Obligations.
3.4 Termination of Employment Without Cause or for Good Reason
(a) If (1) the Company terminates Executive’s employment without Cause, or (2) Executive resigns for Good Reason, before Executive completes twelve (12) months of consecutive work for the Company (as measured from the Effective Date of this Agreement), then Executive shall be entitled to receive the below termination payments and benefits; provided, however, that this Section 3.4(a) shall not apply to, and shall have no effect in connection with, any termination to which Section 3.2 or Section 3.3 of this Agreement applies:
(i) any Accrued Obligations, payable in a lump sum on the next regularly scheduled payroll date following the date on which Executive’s employment terminated;
(ii) COBRA continuation coverage for Executive and his eligible dependents paid in full by the Company, so long as Executive has not become actually covered by the medical plan of a subsequent employer during any such month and is otherwise entitled to COBRA continuation coverage, with such payments for up to a maximum of six (6)
months following the date of termination. After such period, Executive is responsible for paying the full cost for any additional COBRA continuation coverage to which Executive is then entitled;
(iii) payment of the second installment of the Signing Bonus described in Section 2.2 of this Agreement, in a gross amount of Two Hundred Fifty Thousand dollars ($250,000.00), within thirty (30) days from the date on which Executive’s employment terminated; provided that, no payment shall be due under this Section 3.4 (a)(iii) if the Company has already paid the second installment of the Signing Bonus to Executive by the time of his separation from employment;
(iv) full accelerated vesting of any unvested outstanding Initial Option or Initial RSUs granted to Executive under Section 2.3(a) or Section 2.3(b) of this Agreement; and
(v) an extension of the time period during which Executive may exercise Executive's then outstanding and vested Initial Option (taking into account the accelerated vesting provided in this Section 3.4(a)), until the earlier of (A) twelve (12) months from the date of termination, or (B) the latest date upon which such Initial Option would have expired by its original terms under any circumstances.
(b) If (1) the Company terminates Executive’s employment without Cause, or (2) Executive resigns for Good Reason on or after Executive completes twelve (12) months of consecutive work for the Company (as measured from the Effective Date of this Agreement), then Executive shall be entitled to receive the below termination payments and benefits; provided, however, that this Section 3.4(b) shall not apply to, and shall have no effect in connection with, any termination to which Section 3.2 or Section 3.3 of this Agreement applies:
(i) any Accrued Obligations, payable in a lump sum on the next regularly scheduled payroll date following the date on which Executive’s employment terminated;
(ii) COBRA continuation coverage for Executive and his eligible dependents paid in full by the Company, so long as Executive has not become actually covered by the medical plan of a subsequent employer during any such month and is otherwise entitled to COBRA continuation coverage, with such payments for up to a maximum of six (6) months following the date of termination. After such period, Executive is responsible for paying the full cost for any additional COBRA continuation coverage to which Executive is then entitled;
(iii) an amount equal to six (6) months’ Salary, at the rate in effect immediately prior to termination, payable to Executive in accordance with the terms below (“Severance Payments”);
(iv) payment of the second installment of the Signing Bonus described in Section 2.2 of this Agreement, in a gross amount of Two Hundred Fifty Thousand dollars ($250,000.00), within thirty (30) days from the date on which Executive’s employment terminated; provided that, no payment shall be due under this Section 3.4 (b)(iv) if the
Company has already paid the second installment of the Signing Bonus to Executive by the time of his separation from employment;
(v) full accelerated vesting of any unvested outstanding Initial Option or Initial RSUs granted to Executive under Section 2.3(a) or Section 2.3(b) of this Agreement, and accelerated vesting by an additional twelve (12) months of any other then outstanding equity-based awards that vest based on Executive’s continued employment or service; and
(vi) an extension of the time period during which Executive may exercise Executive's then outstanding and vested Initial Option (taking into account the accelerated vesting provided in this Section 3.4(b)), until the earlier of (A) twelve (12) months from the date of termination, or (B) the latest date upon which such Initial Option would have expired by its original terms under any circumstances.
(c) As a condition to receiving the payments and benefits under this Section 3.4 other than the Accrued Obligations, Executive shall execute (and not revoke within the applicable revocation period) a general release and waiver of all claims against the Company, which release and waiver shall be in a form mutually acceptable to the Company and Executive. Such release and waiver shall be delivered to the Company no later than the date specified by the Company (which date shall in no event be later than twenty-one (21) days or forty-five (45) days, as applicable, after the date on which Executive is presented with the terms of the release and waiver). In addition, payment of the amounts and benefits under this Section 3.4, other than the Accrued Obligations, are contingent on Executive’s full and continued compliance with the Company’s Confidentiality Agreement, as the same may be amended from time to time.
(d) Notwithstanding the foregoing, termination of employment by Executive will not be for Good Reason unless (1) Executive notifies the Company in writing of the existence of the condition which Executive believes constitutes Good Reason within thirty (30) days of the initial existence of such condition (which notice specifically identifies such condition), (2) the Company fails to remedy such condition within thirty (30) days after the date on which it receives such notice (the “Remedial Period”), and (3) Executive actually terminates employment within thirty (30) days after the expiration of the Remedial Period and before the Company remedies such condition. If Executive terminates employment before the expiration of the Remedial Period or after the Company remedies the condition (even if after the end of the Remedial Period), then Executive’s termination will not be considered to be for Good Reason.
(e) Subject to Section 3.4(c), Severance Payments under Section 3.4(b)(iii) shall be paid to Executive through the Company’s normally scheduled payroll during the six (6) month period commencing within sixty (60) days following the date on which Executive’s employment was terminated without Cause or Executive resigned for Good Reason; provided, however, that in the event such sixty (60) day period begins in one taxable year of Executive and ends in a second taxable year of Executive, the Company shall not make any Severance Payments to Executive until the second taxable year. Each such
payment shall be treated as a separate payment for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), including the rules and regulations thereunder (“Code Section 409A”). Notwithstanding the foregoing, if any payments and benefits payable pursuant to Section 3.4(b) constitute a “deferral of compensation” subject to Code Section 409A (after taking into account, to the maximum extent possible, any applicable exemptions), then the applicable provisions of Section 13 hereof shall apply.
4. | ASSIGNMENT |
This Agreement is personal to Executive and shall not be assignable by Executive. The Company may assign its rights hereunder to (a) any successor employer; (b) any other corporation resulting from any merger, consolidation or other reorganization to which the Company is a party; (c) any other corporation, partnership, association or other person to which the Company may transfer all or substantially all of the assets and business of the Company existing at such time; or (d) any subsidiary, parent or other affiliate of the Company. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.
5. | AMENDMENTS IN WRITING |
No amendment, modification, waiver, termination or discharge of any provision of this Agreement, or consent to any departure therefrom by either party hereto, shall in any event be effective unless the same shall be in writing, specifically identifying this Agreement and the provision intended to be amended, modified, waived, terminated or discharged and signed by the Company and Executive, and each such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by the Company and Executive.
6. | NOTICES |
Every notice relating to this Agreement shall be in writing and shall be given by personal delivery, by a reputable same-day or overnight courier service (charges prepaid), by registered or certified mail (postage prepaid, return receipt requested) or by facsimile to the recipient with a confirmation copy to follow the next day to be delivered by personal delivery or by a reputable same-day or overnight courier service to the appropriate party’s address or fax number below (or such other address and fax number as a party may designate by notice to the other parties):
If to the Company: | Zillow, Inc. |
1301 Second Avenue, Floor 31
Seattle, Washington 98101
Email: [email protected]
Attn: General Counsel
If to the Executive: | Arik Prawer |
(to address most recently on file with Company)
7. | APPLICABLE LAW |
This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by, and construed and enforced in accordance with, the laws of the State of Washington, without regard to any rules governing conflicts of laws.
8. | ENTIRE AGREEMENT |
This Agreement, on and as of the Effective Date, constitutes the entire agreement between the Company and Executive with respect to the subject matter hereof, and all prior or contemporaneous oral or written communications, understandings or agreements between the Company and Executive with respect to such subject matter are hereby superseded in their entirety, except as otherwise provided herein. Executive expressly acknowledges that he has contemporaneously executed, and is bound by, the Confidentiality Agreement and Arbitration Agreement, during and after his employment with Company.
9. | SEVERABILITY |
If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any action in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
10. | WAIVERS |
No delay or failure by any party hereto in exercising, protecting, or enforcing any of its rights, titles, interests, or remedies hereunder, and no course of dealing or performance with respect thereto, shall constitute a waiver thereof. The express waiver by a party hereto of any right, title, interest, or remedy in a particular instance or circumstance shall not constitute a waiver thereof in any other instance or circumstance. All rights and remedies shall be cumulative and not exclusive of any other rights or remedies.
11. | HEADINGS |
All headings used herein are for convenience only and shall not in any way affect the construction of, or be taken into consideration in interpreting, this Agreement.
12. | COUNTERPARTS |
This Agreement, and any amendment or modification entered into pursuant to Section 5 hereof, may be executed in any number of counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same instrument.
13. | CODE SECTION 409A |
The Company makes no representations or warranties to Executive with respect to any tax, economic or legal consequences of this Agreement or any payments or other benefits provided hereunder, including without limitation under Code Section 409A, and no provision of this Agreement shall be interpreted or construed to transfer any liability for failure to comply with Code Section 409A from Executive or any other individual to the Company or any of its affiliates. Executive, by executing this Agreement, shall be deemed to have waived any claim against the Company and its affiliates with respect to any such tax, economic or legal consequences. However, the parties intend that this Agreement and the payments and benefits provided hereunder be exempt from the requirements of Code Section 409A, and the rules and regulations issued thereunder, to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation pay plan exception described in Treasury Regulation Section 1.409A-1(b)(9)(iii), or otherwise. To the extent Code Section 409A is applicable to this Agreement, the parties intend that this Agreement and any payments and benefits hereunder comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A so as to avoid the imputation of any tax, penalty or interest under Code Section 409A. Notwithstanding anything herein to the contrary, this Agreement shall be construed, interpreted, operated and administered in a manner consistent with such intentions. Without limiting the generality of the foregoing, and notwithstanding any other provision of this Agreement to the contrary:
(a) To the extent Code Section 409A is applicable to this Agreement, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder (a “Separation from Service”), and, for purposes of any such provision of this Agreement, references to “terminate,” “termination,” “termination of employment,” “resigns” and like terms shall mean Separation from Service.
(b) If Executive is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Executive’s Separation from Service, Executive shall not be entitled to any payment or benefit on account of Executive’s Separation from Service, until the earlier of (1) the date which is six (6) months after Executive’s Separation from Service for any reason other than death, or (2) the date of Executive’s death. The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Code Section 409A on
Executive. Any amounts otherwise payable to Executive upon or in the six (6) month period following Executive’s Separation from Service that are not so paid by reason of this Section 13(b) shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after Executive’s Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of Executive’s death).
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date first set forth above.
ARIK PRAWER | |
/s/ ARIK PRAWER | |
ZILLOW, INC. | |
By | /s/ SPENCER M. RASCOFF |
Its | Chief Executive Officer |
APPENDIX A
DEFINITIONS
Capitalized terms used below that are not defined in this Appendix A have the meanings set forth in the Executive Employment Agreement (“Agreement”) to which this Appendix A is attached. As used in the Agreement.
1. “Cause” means the occurrence of one or more of the following events:
(a) willful misconduct, insubordination or dishonesty in the performance of Executive’s duties or a knowing and material violation of the Company’s policies and procedures in effect from time to time which results in a material adverse effect on the Company;
(b) the continued failure of Executive to satisfactorily perform his duties after receipt of written notice that identifies the areas in which Executive’s performance is deficient; provided that, only for purposes of determining whether Executive is entitled to any benefit under Sections 3.4(a)(iii) through 3.4(a)(v), 3.4(b)(iv) through 3.4(b)(vi) of this Agreement, this subsection (b) shall be replaced with “Executive’s willful neglect of duties;”
(c) willful actions in bad faith or intentional failures to act in good faith by Executive with respect to the Company that materially impair the Company business, goodwill or reputation;
(d) conviction of Executive of a felony or misdemeanor, conduct by Executive that the Company reasonably believes violates any statute, rule or regulation governing the Company, or conduct by Executive that the Company reasonably believes constitutes unethical practices, dishonesty or disloyalty and that results in a material adverse effect on the Company;
(e) current use by Executive of illegal substances; or
(f) any material violation by Executive of this Agreement or the Company’s Confidential Information, Inventions, Nonsolicitation and Noncompetition Agreement.
2. “Good Reason” means that Executive, without Executive’s express, written consent, has:
(a) incurred a material reduction in Executive’s annual Salary or bonus opportunity (except for reductions in connection with a general reduction in annual Salary for all executives of the Company by an average percentage that is not less than the percentage reduction of Executive’s annual Salary);
(b) suffered a material breach of this Agreement by the Company;
(c) incurred a material reduction in authority, duties or responsibilities at the Company, although Executive’s anticipated transition to a new role or title with a future entity as noted in Recital E in the Agreement shall not trigger this provision; or
(d) been required to relocate more than fifty (50) miles from Executive’s residence located in the Los Angeles area, or in the event the parties mutually agree that Executive would reside elsewhere, Executive’s then current place of
residence, in order to continue to perform the duties and responsibilities of Executive’s position (not including customary travel as may be required by the nature of Executive’s position).
Exhibit 10.3
ZILLOW, INC.
Proprietary Rights Agreement
This Proprietary Rights Agreement (the “Agreement”) is entered into and between me and Zillow, Inc., a Washington corporation, for and on behalf of Zillow, Inc. and its parents, subsidiaries, affiliates, successors, and assigns. In consideration of my offer of new or continued employment with the Company, the compensation paid to me, including but not limited to any stock, restricted stock units, or stock options which may be granted to me, and other good and valuable consideration, the receipt and sufficiency of which I hereby acknowledge, I agree to the following terms1:
Section 1. Definitions
1.1 “Company” means Zillow, Inc. and any and all parents, subsidiaries, affiliates, successors, and assigns, including, but not limited to, Zillow Group, Inc. and Zillow Home Loans, LLC to which I provide services (such affiliated entities are included within the term “Company” and “Zillow” herein). The parties acknowledge that the Company is currently a media advertising, technology, and residential real estate company with a portfolio of home- related brands and services for consumers and real estate professionals, including but not limited to (a) mobile applications and websites, as well as advertising, software, and other products and services for real estate, rental, and mortgage professionals; (b) an online marketplace for consumer purchase and sale of residential real estate; and (c) origination of mortgage loans.
1.2 “Competing Business” means any business whose efforts involve any products or services in competition with products or services which are, during the Relationship, either (a) produced, marketed or otherwise commercially exploited by the Company (including any parent, subsidiary, or affiliate) or (b) in actual or demonstrably anticipated research or development by the Company (including any parent, subsidiary or affiliate), and as to which I have or had business-related involvement or about which I possess or received Confidential Information during the Look Back Period.
1.3 “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, business plans, product plans, products, services, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the term of my employment with the Company), market research, methods of operations, techniques, personnel
1 Appendix A hereto contains important limitations for persons employed by the Company in certain jobs, as well as state specific modifications for employees working in certain states. You are encouraged to read Appendix A first so you understand which provisions of this Agreement apply to you currently and which may apply to you in the future should you relocate during employment with the Company.
information, works of original authorship, intellectual property (including, but not limited to, unpublished works and
undisclosed patents), photographs, negatives, digital images, software, computer programs, algorithms, tools, ideas, developments, inventions (whether or not patentable), processes, formulas, technology, designs, drawings, forecasts, strategies, marketing plans, legal affairs that are privileged or work product protected, finances, suppliers, clients, prospects, opportunities, contracts or assets of the Company, or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation or inspection of parts or equipment. Confidential Information does not include any of the foregoing items that has become publicly known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved. Confidential Information also does not include information lawfully acquired by a non- management employee about wages, hours or other terms and conditions of employment when used for purposes protected by §7 of the National Labor Relations Act. For purpose of clarity, it shall still be a violation of this Agreement for a non-management employee to wrongfully compete by sharing Confidential Information with a competitor about other employees’ compensation and benefits which was obtained through the course of employment with the Company for purposes of assisting such competitor in soliciting Company employees.
1.4 “Intellectual Property” means any patent, copyright, trade secret, trademark, trade name, service mark, maskwork, original works of authorship, domain names, inventions, concepts, improvements, processes, methods, Invention, or other protected intellectual property right in any Confidential Information, whether or not patentable or registrable under copyright or similar laws, that I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the service of the Company.
1.5 “Invention” means any product, device, technique, article of manufacture, composition of matter, know-how, machine, computer program, algorithm, method, process, procedure, improvement, discovery, invention or new uses for any of the preceding items, whether or not patentable or copyrightable and whether or not reduced to practice, that (a) is within the scope of the Company’s business, research or investigations or results from or is suggested by any work performed by me for the Company and (b) is created, conceived, reduced to practice, developed, discovered, invented or made by me during the Relationship, whether solely or jointly with others, and whether or not while engaged in performing work for the Company, except as otherwise provided herein.
1.6 “Look Back Period” means the last three years of my employment or such shorter period of time as I have been employed.
1.7 “Material” means any product, prototype, model, document, diskette, tape, picture, design, recording, writing or other tangible item which contains or manifests, whether in printed, handwritten, coded, magnetic or other form, any Confidential Information, Invention or Intellectual Property.
1.8 “Person” means any individual, corporation, partnership, trust, association, governmental authority, educational institution, or other entity.
1.9 “Relationship” means the term of my employment with the Company, whether on a full-time, part-time, or consulting basis.
1.10 “Territory” will depend upon my position as follows: (i) if I am in a position where my responsibilities are not geographically limited to an assigned location or territory (such as, by way of example but not limitation, senior management positions) and where I am provided Confidential Information that is not geographically limited to an assigned location or territory (such as, by way of example but not limitation, executives, directors, and management positions), then Territory means the United States and any other countries in which the Company is doing business during the Look Back Period (including state and state-equivalents and county and county-equivalents within the United States and such other countries); (ii) if I am in a position with responsibilities and Confidential Information that are limited to an assigned territory or territories during the Look Back Period, then Territory shall be the specific geographic territory or territories assigned to me during the Look Back Period; and (iii) in the rare event that neither (i) nor (ii) apply, then the Territory is the county or counties that I performed services in or on behalf of the Company during the Look Back Period.
Section 2. Ownership and Use
2.1 Ownership. The Company will be the exclusive owner of all Confidential Information, Inventions, Materials and Intellectual Property. To the extent applicable, all Materials will constitute “works for hire” under applicable copyright laws.
2.2 Duty to the Company. I will promptly disclose to the Company all Confidential Information, Inventions, Materials or Intellectual Property, as well as any business opportunity which comes to my attention during my Relationship with the Company and which relates to the business of the Company or which arises as a result of my employment with the Company. I will not take advantage of or divert any such opportunity for the benefit of myself or anyone else either during or after my Relationship with the Company without the prior written consent of the Company.
2.3 Assignment of Intellectual Property. I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign and transfer to the Company, or its designee, all my rights, title, interest, ownership and/or any appurtenant goodwill in and to any Intellectual Property that I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the service of the Company and that (i) are developed using the equipment, supplies, facilities or Confidential Information of the Company, (ii) result from or are suggested by work performed by me for the Company, or (iii) relate to the Company business or to the actual or demonstrably anticipated research or development of the Company. The Intellectual
Property will be the sole and exclusive property of the Company. I further acknowledge that all original works of authorship that are made by me (solely or jointly with others) within the scope of and during the period of my Relationship with the Company and that are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act. To the extent that any Intellectual Property is not deemed to be work made for hire, I hereby assign all my rights, title, interest, ownership and/or any appurtenant goodwill in and to such Intellectual Property to the Company, except as provided in Section 2.8.
2.4 Patent and Copyright Registrations. I agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Intellectual Property and any copyrights, patents, trademarks, domain names or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto and the execution of all applications, specifications, oaths, assignments and other instruments that the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company and its successors, assigns and nominees the sole and exclusive right, title and interest in and to such Intellectual Property and any copyrights, patents, trademarks, domain names or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of my Relationship with the Company. If the Company is unable because of my mental or physical incapacity or for any other reason to secure my assistance in perfecting the rights transferred in this Agreement, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent and copyright, trademark or domain name registrations thereon with the same legal force and effect as if executed by me. The designation and appointment of the Company and its duly authorized officers and agents as my agent and attorney in fact shall be deemed to be coupled with an interest and therefore irrevocable.
2.5 Maintenance of Records. I agree to keep and maintain adequate and current written records of all inventions and Intellectual Property during the Relationship. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times. I will not contest the validity of any Intellectual Property, or aid or encourage any third party to contest the validity of any Intellectual Property of the Company.
2.6 Non-Disclosure or Use. Except as required for performance of my work for the Company or as authorized in writing by the Company, I will not (a) use, disclose, publish or distribute any Confidential Information, Inventions, Materials or Intellectual Property or (a) remove any Materials from the Company’s premises. If I have any questions about what constitutes Confidential Information I agree to contact the Company’s Legal Department prior to use, disclosure, publication, or
distribution of such information. The Company and I also recognize that state law provides additional protection for statutorily defined trade secrets and this Agreement does not waive, alter, or reduce any such additional protections. Likewise, the Company and I agree that this Agreement does not alter, reduce or modify any obligations I owe to the Company under any other applicable statute or the common law. However, nothing in this Agreement prohibits me from (1) disclosing sexual harassment or sexual assault occurring in the workplace, at work-related events coordinated by or through the Company, or between employees, or between the Company and an employee, off the workplace premises; or (2) reporting possible violations of law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of any law or regulation. I do not need the prior authorization of the Company to make any such reports or disclosures and I am not required to notify the Company that I have made such reports or disclosures. I am hereby provided notice that under the 2016 Defend Trade Secrets Act (DTSA): (1) no individual (consultant, contractor or employee) will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that: (A) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual (consultant, contractor or employee) who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order. In the event that I file a trade secret of the Company under seal in a matter in which the Company is not a party, I agree to provide notice to the Company contemporaneously with the filing of the trade secret under seal so that the Company can take whatever additional efforts are necessary to maintain the confidentiality of the trade secret information.
2.7 Intellectual Property Retained and Licensed. I will identify on Exhibit A all original works of authorship, inventions, developments, improvements, trademarks, designs, domain names, processes, methods and trade secrets that were made by me prior to my Relationship with the Company (collectively referred to as “Prior Intellectual Property”), that belong to me, that relate to the Company’s proposed business, products or research and development, and that are not assigned to the Company hereunder; or, if no such list is attached, I represent that there is no such Prior Intellectual Property. If in the course of my Relationship with the Company, I incorporate into Company property any Prior Intellectual Property owned by me or in which I have an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Intellectual Property as part of or in connection with such Company property.
2.8 Exception to Assignments. This Agreement’s assignment provisions are limited to only those inventions that can be lawfully assigned by an employee to an employer. Some examples of state laws limiting the scope of assignable inventions are: Delaware Code Title 19 Section 805; Kansas Statutes Section 44-130; Minnesota Statutes 13A Section 181.78; North Carolina General Statutes Article 10A, Chapter 66, Commerce and Business, Section 66-57.1; Utah Code Sections 34-39-l through 34-39-3, "Employment Inventions Act"; Washington Rev. Code, Title 49 RCW: Labor Regulations, Chapter 49.44.140. NOTICE: I acknowledge notice that to the extent one of the foregoing laws applies, my invention assignment agreement will not apply to an invention for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on my own time, unless: (1) the invention relates directly to the business of the Company or to the Company's actual or demonstrably anticipated research or development; or (2) the invention results from any work performed by me for the Company. Similarly, to the extent California Labor Code Section 2870, or Illinois 765ILCS1060/1-3, "Employees Patent Act", controls then the same notice will apply absent the word “directly” in part (1).
Section 3. Further Obligations
3.1 My execution, delivery and performance of this Agreement and the performance of my other obligations and duties to the Company will not cause any breach, default or violation of any other employment, nondisclosure, confidentiality, consulting or other agreement to which I am a party or by which I may be bound. Attached as Exhibit B is a list of all prior agreements now in effect under which I have agreed to keep information confidential or not to compete or solicit employees of any Person.
3.2 I will not use in performance of my work for the Company or disclose to the Company any trade secret, confidential or proprietary information of any prior employer or other Person if and to the extent that such use or disclosure may cause a breach, default or violation of any obligation or duty that I owe to such other Person (e.g., under any agreement or applicable law). My compliance with this paragraph, which is an essential term of my employment with the Company, will not prohibit, restrict or impair the performance of my work, obligations and duties to the Company.
3.3 I recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party.
Section 4. Restrictive Covenants
4.1 Employee Non-Solicitation. In consideration for my employment with the Company and other valuable consideration, I agree that during the period of my Relationship with the Company and for a period of twelve (12) months thereafter, I will not, directly or indirectly, solicit any person who shall then be employed by the Company (as an employee or consultant) or who shall have been employed by the Company (as an employee or consultant) within the prior twelve (12) month period, on behalf of myself or any other person, firm, corporation, association or other entity, for the purpose of: (a) soliciting such employee to terminate his or her employment by the Company; or (b) encouraging such person to go to work for a Competing Business. The foregoing employee non-solicitation provision shall be limited to individuals: who (i) are uniquely essential to the management, organization, sales, research and development, or service of the business, or similar role; and (ii) with whom I am working or have worked, as to whom I have or have had supervisory responsibilities, or regarding whom I received Confidential Information, in each case during the Look Back Period. In the event the Company loses an employee due, in whole or in part, to conduct by me that violates this Agreement prior to the issuance of injunctive relief, I shall pay the Company a sum equal to thirty percent (30%) of the annual wages of the person(s) who were improperly solicited and left the Company, based on such person’s last rate of pay with the Company. This payment shall not preclude or act as a substitute for any remedy that would otherwise be available, including but not limited to, injunctive relief to prevent further violations. Nothing herein is intended or to be construed as a prohibition against general advertising such as “help wanted” ads that are not targeted at the Company’s employees. This provision also does not preclude conduct protected by Section 7 of the National Labor Relations Act (NLRA) such as joining or forming a union, engaging in collective bargaining, or engaging in other concerted activity for mutual aid and protection.
4.2 Customer Non-Solicitation. In consideration for my employment with the Company and other valuable consideration, I agree that, during the period of my Relationship with the Company and for a period of twelve (12) months thereafter, I will not, directly or indirectly, attempt to solicit for, divert to, appropriate to, or accept on behalf of, any Competing Business, any business from any customer or actively sought prospective customer of the Company with which I have or have had material business-related dealings, or whose dealings with the Company have been supervised by me, or about which I have acquired Confidential Information during the Look Back Period. This provision does not preclude conduct protected by Section 7 of the NLRA such as joining or forming a union, engaging in collective bargaining, or engaging in other concerted activity for mutual aid and protection.
4.3 Non-Competition. In consideration for my employment with the Company and other valuable consideration, I agree that, during the period of my Relationship with the Company and for a period of twelve (12) months thereafter, I will not, within the Territory or for the benefit of a Competing Business’s operations within the Territory, directly or indirectly, engage in, be employed by, perform services for, participate in the ownership, management, control or operation of, or
otherwise be connected with, any Competing Business, in a capacity that is the same as or similar to the capacity in which I performed services for the Company during the Look Back Period or any such other capacities that would result in the use or disclosure of Confidential Information. For purposes of this paragraph, I will not be considered to be connected with any Competing Business solely on account of: my ownership of less than five percent of the outstanding capital stock or other equity interests in any Person carrying on the Competing Business. The Company, in its sole discretion, may determine to waive the noncompetition provisions of this Section 4.3 in whole or in part. Any such waiver shall not constitute a waiver of any noncompetition or forfeiture provisions of any other agreement between the Company and me.
4.4 Direct or Indirect Violations. I acknowledge and agree that I will be in violation of Sections 4.1, 4.2, and/or 4.3 if I engage in any or all of the activities set forth in those Sections directly as an individual on my own account, or indirectly for, through, or with assistance from, any other person or entity, whether as partner, joint venturer, employee, agent, salesperson, employee, officer, manager and/or director of any person or entity, or as an equity holder of any person or entity in which I or my spouse, child, or parent owns, directly or indirectly, any of the outstanding equity interests.
4.5 Reasonableness of Restrictions. I acknowledge and agree that, given the electronic and global nature of the environment in which the Company conducts business, a broad geographic limitation to the above restrictions is reasonable to protect the Company’s interests. I further acknowledge and agree that the length of the time periods applicable to the restrictive covenants are appropriate and reasonable, in view of the nature of the Company’s business and my employment with the Company and knowledge of its business. I acknowledge that I have carefully considered the terms of this Agreement, including the restrictive covenants contained herein, and acknowledge that if this Agreement is enforced according to its terms, I will be able to earn a reasonable living in commercial activities in locations satisfactory to me. I also acknowledge that the restrictive covenants set forth herein are a vital part of and intrinsic to the ongoing operations of the Company, in light of the nature of the business and my unique position, skills, and knowledge with and of the Company.
4.6 Tolling of Covenants. I acknowledge and agree that if it is judicially determined that I have violated any of my obligations under Sections 4.1, 4.2, and/or 4.3, then the period applicable to each obligation that I have been determined to have violated shall automatically toll from the date of the first breach, and all subsequent breaches, until the resolution of the breach through private settlement, judicial or other action, including all appeals.
Section 5. Termination of Relationship
5.1 I agree that, at the time of leaving the service of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all works of original authorship, domain names, original registration certificates, photographs, negatives, digital images, devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment or other documents or property, or
reproductions of any aforementioned items, and any and all Confidential Information, developed by me pursuant to my Relationship with the Company or otherwise belonging to the Company or its successors or assigns. I agree to sign and deliver the “Termination Certification” attached as Exhibit C.
5.2 At the end of my Relationship with the Company, I agree to provide the name of my new employer, if any, and consent to notification by the Company to my new employer about my rights and obligations under this Agreement in the form of Exhibit D.
Section 6. Employment At Will
Except as provided for in this Section 6, I agree that my employment is “at will,” which means that it can be terminated at any time by the Company or by me, with or without cause and with or without notice. I agree that any promise or obligation that my employment be on any other basis than “at will” is invalid unless in writing signed by the Chief Executive Officer of the Company. I agree to abide by the Company’s rules, regulations, policies and practices as revised from time to time.
Section 7. Miscellaneous
7.1 Survival; Subsidiaries and Affiliates. I agree that my obligations under this Agreement will survive the end of my Relationship with the Company. I understand and agree that this Agreement is executed by Zillow, Inc. on its own behalf and on behalf of each of its parents, subsidiaries, affiliates, successors, or assignees, that my obligations under this Agreement shall apply equally to each of Zillow, Inc.’s parent companies, subsidiaries, affiliates, successors, or assignees, and that such entities may enforce this Agreement in their own name as if they were parties to this Agreement.
7.2 Assignability. I understand and agree that this Agreement will be binding upon my heirs, executors, assigns, administrators, agents, and other legal representatives, and will be for the benefit of the Company, its successors, and its assigns. Without limiting the foregoing, the Company may assign this Agreement and its rights and obligations under this Agreement to any successor to any of the Company’s relevant assets, whether by merger, consolidation, reorganization, reincorporation, sale of assets or stock, or otherwise.
7.3 Injunctive Relief; Costs. I acknowledge that my obligations under this Agreement are important to the Company, and that the Company would not employ or continue to employ me without my agreement to such obligations. I also acknowledge that if I do not abide by my obligations in this Agreement, the Company will suffer immediate and irreparable harm, and that the damage to the Company will be difficult to measure and financial relief will be incomplete. Accordingly, the Company will be entitled to injunctive relief and other equitable remedies in the event of a breach by me of any obligation under this Agreement. Furthermore, no bond need be posted in conjunction with the application for, or issuance of, an injunction (which requirement I hereby specifically and expressly waive) (however, if a court or arbitrator requires a bond
notwithstanding the foregoing waiver, the parties agree that $1,000 is an adequate amount of bond that need be posted). The rights and remedies of the Company under this section are in addition to all other remedies. Further, in any legal action or other proceeding in connection with this Agreement (e.g., to recover damages or other relief), the prevailing party will be entitled to recover its reasonable attorneys’ fees and other costs incurred.
7.4 Severability and Modification. This Agreement will be enforced to the fullest extent permitted by applicable law. If for any reason any provision of this Agreement is held to be invalid or unenforceable to any extent (including with respect to scope, duration, territory, or terms of restrictive covenants), then I agree that (a) the court or arbitrator making such
determination shall have the power to reduce or modify the scope, duration, territory, and/or terms of such provision, and to delete specific words or phrases in such provision, so that the provision is enforceable by the court or arbitrator, and such provision as amended shall be enforced by the court or arbitrator; (b) such invalidity or unenforceability will not affect any other provision of this Agreement or any other agreement between the Company and me; and (a) that I will abide by the Agreement as modified by the court or arbitrator.
7.5 Governing Law. I acknowledge and agree that the Company has an interest in administering its agreements, plans, and programs under uniform law, and that it is fair to have all Company employees be subject to uniform laws in connection with agreements like this one. Therefore I agree that all disputes arising under or related to this Agreement or to my employment or relationship or dealings with the Company shall be governed by the laws of the State of Washington and construed in accordance therewith without giving effect to principles of conflicts of laws. I hereby irrevocably waive my rights, if any, to have the laws of any other state other than the State of Washington apply to this Agreement or my employment with the Company. Notwithstanding the foregoing, the Company and I acknowledge that the Federal Arbitration Act applies to the Mutual Agreement to Arbitrate Claims if entered into by the parties.
7.6 Venue and Personal Jurisdiction The parties acknowledge the Mutual Agreement to Arbitrate Claims entered into by the parties and the fact that the Mutual Agreement to Arbitrate Claims excludes claims for temporary equitable relief in aid of arbitration (“Temporary Injunction Proceedings”). To the maximum extent permitted by law, the parties expressly agree to submit to the exclusive jurisdiction and exclusive venue of courts located in the State of Washington, King County, for Temporary Injunction Proceedings, regardless of where I reside or where I perform services for the Company. I waive any right to have any Temporary Injunction Proceedings decided in any other jurisdiction or venue.
7.7 Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us, subject to the mutual Agreement to Arbitrate Claims entered into by the parties which shall be enforced to the maximum extent permitted by applicable law (after application of Federal Arbitration Act preemption principles). No modification of or amendment to this Agreement, or any waiver of any rights under this Agreement, will be effective unless in writing signed by the party to be charged or is by order of
a court of competent jurisdiction or duly-appointed arbitrator. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.
7.8 Waivers. No waiver of any breach shall be considered valid unless in writing signed by the party against whom waiver is asserted, and no waiver shall be a waiver of any subsequent breach.
7.9 Acknowledgment. I have carefully read all of the provisions of this Agreement and agree that (a) the same are necessary for the reasonable and proper protection of the Company’s business, (b) the Company has been induced to enter into and/or continue its relationship with me in reliance upon my compliance with the provisions of this Agreement, (a) every provision of this Agreement is reasonable with respect to its scope and duration, (d) I have executed this Agreement without duress or coercion from any source, and (e) I have received a copy of this Agreement.
This Agreement shall be effective as of | . | |
(Date) | ||
Signature |
FULL NAME (print or type) |
ACCEPTED: |
ZILLOW, INC. |
By |
Its Chief People Officer |
APPENDIX A
Interns:
If I am employed by the Company as an intern, Section 4.3 shall only apply during the period of time I am employed by the Company (and not post-employment). In addition, any applicable state specific modifications provided for below shall also apply while I am employed by the Company as an intern (and not post-employment).
Attorneys:
The parties agree that Section 4.3 shall not apply to restrict any attorney from the practice of law on behalf of any future client, subject to the applicable Rules of Professional Conduct. In addition, any applicable state specific modifications provided for below shall also apply.
Alabama:
If I reside in Alabama, for so long as I reside in Alabama and am subject to Alabama law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: Section 4.2 shall apply only to current customers and shall not apply to prospective customers.
Arizona:
If I reside in Arizona, for so long as I reside in Arizona and am subject to Arizona law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: (a) the obligations under Section 4.2 are limited to the Territory; and (b) with respect to Confidential Information which (1) is a Trade Secret, my confidentiality obligations shall continue indefinitely until the information is no longer considered a Trade Secret under applicable law; or (2) is not a Trade Secret, my confidentiality obligations shall continue in duration until the first to occur of the following: (i) three (3) years has elapsed since termination of my employment with the Company for any reason, or (ii) the Confidential Information has been made generally available to the public either by the Company or by a third party with the Company’s consent and through no wrongful action by me.
Arkansas, Connecticut, Montana:
If I reside in Arkansas, Connecticut, or Montana, for so long as I reside in Arkansas, Connecticut, or Montana and am subject to Arkansas, Connecticut, or Montana law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: with respect to Confidential Information which (1) is a Trade Secret, my confidentiality obligations shall continue indefinitely until the information is no longer considered a Trade Secret under applicable law; or (2) is not a Trade Secret, my confidentiality obligations shall continue in duration until the first to occur of the following: (i) three (3) years has elapsed since termination of my employment with the Company for any reason, or (ii) the Confidential Information has been made generally available to the public either by the Company or by a third party with the Company’s consent and through
no wrongful action by me.
California:
To the extent my employment or potential employment is governed by and subject to the laws of the State of California: (a) Section 4.1 shall only apply during the period of time I am employed by the Company (and not post-employment) and I acknowledge and agree that engaging in conduct while employed that violates Section 4.1 would create a conflict of interest with the Company; (b) Section 4.2 shall be limited to situations where I am aided in my conduct by the use or disclosure of the Company’s trade secrets (as defined by California law); (c) Section 4.3 shall only apply during the period of time that I am employed by the Company (and not post-employment,) and I acknowledge and agree that engaging in conduct while employed that violates Section 4.3 would create a conflict of interest with the Company; and (a) Sections 7.5 and 7.6 shall not apply.
Louisiana:
If I reside in Louisiana, for so long as I reside in Louisiana and am subject to Louisiana law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: Section 4.3 shall only apply during the period of time that I am employed by the Company (and not post-employment,) and I acknowledge and agree that engaging in conduct while employed that violates Section 4.3 would create a conflict of interest with the Company.
Massachusetts:
If I reside in Massachusetts, for so long as I reside in Massachusetts and am subject to Massachusetts law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: Section 4.3 shall only apply during the period of time that I am employed by the Company (and not post-employment,) and I acknowledge and agree that engaging in conduct while employed that violates Section 4.3 would create a conflict of interest with the Company.
Nebraska:
If I reside in Nebraska, for so long as I reside in Nebraska and am subject to Nebraska law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: (a) the Look Back Period in Section 1.6 is revised to mean the last two years of my employment or such shorter period of time as I have been employed; (b) Section 4.2 is limited to customers with whom the Company did business and as to which I had personal business-related contact during the Look Back Period; and (c) Section 4.3 shall only apply during the period of time that I am employed by the Company (and not post-employment,) and I acknowledge and agree that engaging in conduct while employed that violates Section 4.3 would create a conflict of interest with the Company.
Nevada:
If I reside in Nevada, for so long as I reside in Nevada and am subject to Nevada law (meaning the choice of law provision in Section 7.5 is disregarded), then Section 4.2 does not preclude me from providing services to any former client or
customer of the Company if: (a) I did not solicit the former customer or client; (b) the customer or client voluntarily chose to leave and seek services from me; and (c) I am otherwise complying with the limitations in this Agreement as to time and scope of activity to be restrained.
New York:
If I reside in New York, for so long as I reside in New York and am subject to New York law (meaning, the choice of law provision in Section 7.5 is disregarded), then the following applies to me: Section 4.2 shall be modified so that it excludes those customers who became a customer of the Company as a result of my independent contact and business development efforts with the customer prior to and independent from his/her employment with the Company.
North Carolina:
If I reside in North Carolina, for so long as I reside in North Carolina and am subject to North Carolina law (meaning, the choice of law provision in Section 7.5 is disregarded), then the following applies to me: the Look Back Period shall be two years and shall be calculated looking back two years from the date of enforcement and not from the date employment ends.
North Dakota:
If I reside in North Dakota, for so long as I reside in North Dakota and am subject to North Dakota law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: (a) Section 4.3 shall only apply during the period of time that I am employed by the Company (and not post-employment,) and I acknowledge and agree that engaging in conduct while employed that violates Section 4.3 would create a conflict of interest with the Company; and (b) Section 4.2 shall be limited to situations where I am aided in my conduct by the use or disclosure of the Company’s trade secrets (as defined by applicable law).
Oklahoma:
If I reside in Oklahoma, for so long as I reside in Oklahoma and am subject to Oklahoma law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: (i) Section 4.2 is rewritten is follows: “In consideration for my employment with the Company and other valuable consideration, I agree that, during the period of my Relationship with the Company and for a period of twelve (12) months thereafter, I will not directly solicit the established clients of the Company for the purpose of doing any business that would compete with the Company’s business. The foregoing shall be limited to clients with which I have or have had material business-related dealings, or whose dealings with the Company have been supervised by me, or about which I have acquired Confidential Information during the Look Back Period. This provision does not preclude conduct protected by Section 7 of the NLRA such as joining or forming a union, engaging in collective bargaining, or engaging in other concerted activity for mutual aid and protection.”; and (ii) Section 4.3 shall only
apply during the period of time that I am employed by the Company (and not post-employment,) and I acknowledge and agree that engaging in conduct while employed that violates Section 4.3 would create a conflict of interest with the Company.
Oregon:
If I reside in Oregon, for so long as I reside in Oregon and am subject to Oregon law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: the post-employment restrictions in Section 4.3 shall only apply if I: (a) am engaged in administrative, executive or professional work and perform predominantly intellectual, managerial, or creative tasks, exercise discretion and independent judgment and earn a salary or am otherwise exempt from Oregon's minimum wage and overtime laws; (b) the Company has a "protectable interest" (meaning, access to trade secrets or competitively sensitive confidential business or professional information); and (c) the total amount of my annual gross salary and commission, calculated on an annual basis, at the time of my termination, exceeds the median family income for a family of four, as determined by the United States Census Bureau. However, if I do not meet the requirements of either (a) or (c) (or both), the Company may, on a case-by-case basis, decide to make Section 4.3 enforceable as to me (as allowed by Oregon law), by paying me during the period of time I am restrained from competing the greater of: (i) compensation equal to at least 50 percent of my annual gross base salary and commissions at the time of my termination; or (ii) fifty percent of the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of my termination.
Wisconsin:
If I reside in Wisconsin, for so long as I reside in Wisconsin and am subject to Wisconsin law (meaning the choice of law provision in Section 7.5 is disregarded), then the following applies to me: (a) with respect to Confidential Information which (1) is a Trade Secret, my confidentiality obligations shall continue indefinitely until the information is no longer considered a Trade Secret under applicable law; or (2) is not a Trade Secret, my confidentiality obligations shall continue in duration until the first to occur of the following: (i) three (3) years has elapsed since termination of my employment with the Company for any reason, or (ii) the Confidential Information has been made generally available to the public either by the Company or by a third party with the Company’s consent and through no wrongful action by me; and (b) Section 4.6 shall not apply.
EXHIBIT A
LIST OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP
Title | Date | Identifying Number or Brief Description | ||
No inventions or improvements | ||
Additional Sheets Attached | ||
Signature of Employee: | |
Print Name of Employee: | |
Date: | |
EXHIBIT B
The following is a list of all prior agreements with former employers or others to which I am a party in which I agreed to maintain the confidentiality of the information of, or not to compete with or solicit the employees or customers of, a third party.
No Agreements | ||
See below | ||
Additional sheets attached | ||
I hereby acknowledge and affirm that I have complied with, and will comply with, my obligations under the agreements identified in this Exhibit B, including but not limited to any confidentiality, non-compete, and non-solicit obligations I owe or owed to any former employers or others, and that I do not reasonably anticipate that my employment with the Company may violate any existing obligations I have under the agreements.
Signature of Employee: | |
Print Name of Employee: | |
Date: | |
EXHIBIT C TERMINATION
CERTIFICATION
This is to certify that I do not have in my possession, and I have not failed to return, any Materials or other property belonging to Zillow, Inc., its subsidiaries, affiliates, successors or assigns (together, the “Company”).
I further certify that I have complied with all the terms of the Company’s Proprietary Rights Agreement signed by me, including the reporting of any Inventions conceived or made by me (solely or jointly with others) covered by that Agreement.
I further agree that, in compliance with the Agreement, I will not use, disclose, publish or distribute any Confidential Information, Inventions, Materials or Intellectual Property.
I will continue to be subject to written post-employment obligations that I entered into with the Company, which prohibit me from engaging in certain conduct. This prohibited conduct may (as allowed by applicable law) include, but not be limited to, restrictions on my ability to solicit employees and consultants, or to solicit customers or prospective customers of the Company, or to enter into certain types of prohibited relationships with Competing Businesses. The details of these restrictions are fully set forth in the Proprietary Rights Agreement signed by me, which I have received an additional copy of in conjunction with the termination of my employment.
Signature of Employee: | |
Print Name of Employee: | |
Date: | |
EXHIBIT D
NOTIFICATION TO NEW EMPLOYERS
Dear [name of new employer’s president]:
We understand that our former employee, [name of employee], has accepted employment with your company. This letter is to advise you that [name of employee] signed a Proprietary Rights Agreement with Zillow, Inc. that remains in full force and effect. At the time [name of employee] left our company, we advised [him/her] of [his/her] continuing obligations under the Agreement and [name of employee] signed a Termination Certificate affirming [his/her] obligations under the Agreement. A copy of the Termination Certificate, dated _________, 20_, is enclosed so that any conflict with these obligations can be avoided during [his/her] employment with you.
Very truly yours,
[Typed name] |
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13-14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard Barton, certify that:
1. | I have reviewed this report on Form 10-Q of Zillow Group, Inc. for the fiscal quarter ended March 31, 2019; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ RICHARD BARTON | |
Name: | Richard Barton | |
Title: | Chief Executive Officer | |
Date: | May 9, 2019 | |
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13-14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Allen Parker, certify that:
1. | I have reviewed this report on Form 10-Q of Zillow Group, Inc. for the fiscal quarter ended March 31, 2019; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ ALLEN PARKER | |
Name: | Allen Parker | |
Title: | Chief Financial Officer | |
Date: | May 9, 2019 | |
EXHIBIT 32.1
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Zillow Group, Inc. (the “Company”) for the fiscal quarter ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard Barton, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ RICHARD BARTON | |
Name: | Richard Barton | |
Title: | Chief Executive Officer | |
Date: | May 9, 2019 | |
EXHIBIT 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Zillow Group, Inc. (the “Company”) for the fiscal quarter ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Allen Parker, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ ALLEN PARKER | |
Name: | Allen Parker | |
Title: | Chief Financial Officer | |
Date: | May 9, 2019 | |