ZipRealty Announces Stock Option Exchange Program - 26 June 2009
ZipRealty Announces Stock Option Exchange Program
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Press Release
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Source: ZipRealty, Inc.
- On Friday June 26, 2009, 9:09 am EDT
EMERYVILLE, Calif.--(BUSINESS WIRE)--ZipRealty, Inc. (Nasdaq: ZIPR - News) today announced that the Company is
commencing a stock option exchange program for stock options held by its
current employees and officers. The Company believes the stock option
exchange program will have a positive effect on the retention and
motivation of participating employees. The tender offer will commence
today and will expire, unless otherwise extended by the Company, in its
sole discretion, at 9:00 p.m. (Pacific Time) on July 24, 2009.
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Under the terms of the exchange offer, participants will be able to
tender options which have significantly higher exercise prices than the
current market value in exchange for a lesser number of newly granted
options. The exercise price of the new options will be the closing price
of ZipRealty’s common stock on The NASDAQ Stock Market on the exchange
date, which is expected to be the day the tender offer expires (July 24,
2009). The stock options eligible for tender are those with an exercise
price at or above $4.59 per share, the 52 week closing high at the time
the Board of Directors approved the program. As of June 23, 2009, there
were 3,584,710 stock options eligible for tender.
As a result of the tender offer, the Company will recognize the
incremental non-cash compensation cost of the new stock options granted
in the exchange offer. The incremental compensation cost will be
measured as the excess, if any, of the fair value of the new options
granted in the exchange over the fair value of the eligible options
surrendered in exchange for the new options. The incremental cost will
be recognized as compensation expense ratably over the three year
vesting period of the new options in addition to the remaining
unamortized compensation expense associated with the eligible options
surrendered in the exchange. The amount of the incremental cost will
depend on a number of factors which will not be known until the
expiration date of the tender offer, and, therefore, the Company cannot
predict the exact amount of the incremental compensation cost that will
result from the exchange offer. However, the Company expects the
incremental compensation cost will be between approximately $550,000 and
$900,000.
The exchange offer is not contingent on any minimum number of options
being tendered. The exchange offer is, however, subject to a number of
other terms and conditions as set forth in the offering documents.
Neither the Company’s management nor its Board of Directors makes any
recommendation in connection with the exchange offer.
This press release is for informational purposes only, and does not
constitute an offer to exchange or the solicitation of an offer to
exchange any stock options. The full details of the tender offer,
including instructions on how to tender options, along with the related
materials, are expected to be delivered promptly to each holder of
eligible options. Each holder of eligible options should carefully read
the exchange offer materials, as they contain important information,
including various terms and conditions of the tender offer. A tender
offer statement on Schedule TO has been filed with the Securities and
Exchange Commission (the “SEC”) and is available along with other filed
documents for free on the website of the SEC at www.sec.gov.
Copies of the tender offer statement may also be obtained on the
Company’s website, www.ziprealty.com.
Eligible holders of eligible options are urged to carefully read the
tender offer statement prior to making any decision with respect to the
exchange offer.
About ZipRealty, Inc.
ZipRealty is a full-service residential real estate brokerage firm, an
operator of a leading website and online services focused on residential
real estate. The Company utilizes its user-friendly website and employee
real estate agents to provide homebuyers and sellers with high-quality
service and value. ZipRealty's website provides users with access to
comprehensive local Multiple Listing Services home listings data, as
well as other relevant market and neighborhood information. The
Company's proprietary business management system and technology platform
help to improve productivity and reduce costs, allowing the Company to
pass on significant savings to consumers as permitted by law. Founded in
1999, the Company operates in 36 major markets in 22 states and the
District of Columbia. For more information on ZipRealty, visit www.ziprealty.com
or call 1-800-CALL-ZIP.
Cautionary Language
This release contains forward-looking statements within the meaning of
the "safe harbor" provisions of the federal securities laws including
the statement regarding the Company’s belief that the option exchange
program will have a positive effect on motivation and retention of
employees, the tender offer is expected to close in the third quarter of
2009, and the Company will recognize a non-cash compensation expense
attributable to the incremental cost of the new options granted in the
exchange which the Company expects approximately will be between
$550,000 and $900,000 (and recognized ratably over the three year
vesting period of the new options in addition to the remaining
unamortized compensation expense associated with the eligible options
surrendered in the exchange). The forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ
materially from those projected. The risks and uncertainties include,
but are not limited to, the Company’s ability to retain and incent its
personnel amidst a volatile real estate market, unexpected events could
occur which could result in an increase to the expected non-cash
compensation expense, and a condition to closing may not
occur, which conditions include that there has been no threatened,
instituted, or pending action or proceeding that challenges or is deemed
applicable to the tender offer that in the Company’s reasonable judgment
might adversely affect the Company’s business or the tender offer. The
forward-looking statements included in this release are made as of
today’s date and, except as otherwise required by law, ZipRealty does
not intend to update these forward-looking statements to reflect events
or circumstances after the date hereof.
Contact:
ZipRealty, Inc.
Investor Relations:
Tom Ryan / Raphael Gross, 866-947-4663
or
Media:
Marcus Gamo / Aimee Grove, 415-277-4925
ziprealty@allisonpr.com