As filed with the Securities and Exchange Commission on August 8, 2019
Registration No. 333-
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
ZILLOW GROUP, INC.
(Exact name of registrant as specified in its charter)

Washington
 
 
 
47-1645716
(State or other jurisdiction
of incorporation or organization)
 
 
 
(I.R.S. Employer
Identification No.)
1301 Second Avenue, Floor 31
Seattle, Washington 98101
(Address of principal executive offices, including zip code)
 
ZILLOW GROUP, INC. AMENDED AND RESTATED 2011 INCENTIVE PLAN
ZILLOW GROUP, INC. 2019 EQUITY INDUCEMENT PLAN
(Full title of the plans)
 
Richard Barton
Chief Executive Officer
Zillow Group, Inc.
1301 Second Avenue, Floor 31
Seattle, Washington 98101
(206) 470-7000
(Name, address and telephone number, including area code, of agent for service)
 
Copies to:
Jennifer Rock
Allison C. Handy
Chief Accounting Officer
Kelly Reinholdtsen
Zillow Group, Inc.
Perkins Coie LLP
1301 Second Avenue, Floor 31
1201 Third Avenue, Suite 4900
Seattle, Washington 98101
Seattle, Washington 98101-3099
(206) 470-7000
(206) 359-8000
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
 
x

 
Accelerated filer
 
☐
 
 
 
 
 
 
 
Non-accelerated filer
 
☐  
 
Smaller reporting company
 
☐
 
 
 
 
 
 
 
 
 
 
 
Emerging growth company
 
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.   ☐
 




CALCULATION OF REGISTRATION FEE
 
 
 
 
 
 
 
 
Title of Securities to Be Registered
Amount to Be Registered (1)
Proposed Maximum Offering Price Per Share (2)
Proposed Maximum Aggregate Offering Price (2)
Amount of Registration Fee
Class C Capital Stock, par value $0.0001 per share
 
 
 
 
 
Zillow Group, Inc. Amended and Restated 2011 Incentive Plan
913,098
(3)
$47.23
$43,125,618.54
$5,226.82
 
 
Zillow Group, Inc. 2019 Equity Inducement Plan
10,000,000
 
$47.23
$472,300,000.00
$57,242.76
 
 
TOTAL
10,913,098
 
 
$515,425,618.54
$62,469.58
(4)
(1)
Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement (the “Registration Statement”) also covers any additional shares of Class C capital stock of Zillow Group, Inc. (the “Registrant”) that may become issuable under the Registrant’s Amended and Restated 2011 Incentive Plan (the “2011 Plan”) and the Registrant’s 2019 Equity Inducement Plan as a result of any future stock splits, stock dividends or similar adjustments of the Registrant’s outstanding Class C capital stock.
(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and Rule 457(h)(1) of the Securities Act. The proposed maximum offering price per share is estimated to be $47.23, based on the average of the high sales price ($48.20) and the low sales price ($46.25) for the Registrant’s Class C capital stock as reported by The Nasdaq Global Select Market on August 5, 2019.
(3)
The shares of Class C capital stock being registered on the Registration Statement were previously registered by the Registrant as shares of Class A common stock (the “Class A Shares”) for issuance under the 2011 Plan on a Registration Statement on Form S-8 (File No. 333-202132) (the “Class A Registration Statement”) filed on February 17, 2015. The Class A Shares are not subject to outstanding awards under the 2011 Plan and have not been issued under the 2011 Plan and, therefore, remain available for future issuance under the 2011 Plan, either as Class A common stock or Class C capital stock, pursuant to the terms of the 2011 Plan. Following the Registrant’s payment of a dividend on August 14, 2015 (the “Dividend”), pursuant to which (i) holders of Class A common stock as of July 31, 2015, the record date for the Dividend, received a dividend of two shares of Class C capital stock for each share of Class A common stock held, and (ii) outstanding awards under the 2011 Plan and the 2011 Plan’s share reserve also were proportionately adjusted to reflect the Dividend, the Registrant grants awards for Class C capital stock under the 2011 Plan. The Registrant is now re-registering the Class A Shares for issuance as Class C capital stock under the 2011 Plan. Contemporaneously with the filing of the Registration Statement, the Registrant is filing a post-effective amendment to the Class A Registration Statement to deregister the Class A Shares being registered on the Registration Statement as Class C capital stock.
(4)
The Registrant previously paid an aggregate of $120,052.68 in registration fees for the registration of an aggregate of 13,428,034 shares of Class A common stock on the Class A Registration Statement, of which $10,761 remains unutilized with respect to the Class A Shares and is being applied, pursuant to Rule 457(p) of the Securities Act, to the registration fee for the Class C capital stock being registered on the Registration Statement.
 


PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3.
Incorporation of Certain Documents by Reference
The Registrant hereby incorporates by reference into this Registration Statement the following documents filed with the Securities and Exchange Commission (the “Commission”) by the Registrant (Commission File No. 001-36853) (except for the portions of Current Reports on Form 8-K furnished pursuant to Item 2.02 or Item 7.01 thereof, and any associated exhibits furnished pursuant to Item 9.01 thereof, or otherwise not filed with the Commission):
(a)
the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed on February 21, 2019 , which contains the audited consolidated financial statements of the Registrant for the latest fiscal year for which such statements have been filed;
(b)
the Registrant’s Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 2019, filed on May 9, 2019 , and for the quarterly period ended June 30, 2019, filed on August 7, 2019 ;




(c)
the Registrant’s Current Reports on Form 8-K filed on February 21, 2019 , May 3, 2019 , and June 5, 2019 ; and
(d)
the description of the Registrant’s Class C capital stock contained in the Registrant’s registration statement on Form 8-A filed on July 29, 2015 , pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including any amendment or report filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof (excluding any documents or portions of such documents that are furnished pursuant to Item 2.02 or Item 7.01 of a current report on Form 8-K, and any associated exhibits furnished pursuant to Item 9.01 thereof, that are otherwise not filed with the Commission), and prior to the filing of a post-effective amendment that indicates that all the securities offered hereby have been sold or that deregisters the securities offered hereby then remaining unsold, shall also be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in this Registration Statement or in a document incorporated or deemed to be incorporated by reference in this Registration Statement will be deemed to be modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this Registration Statement modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
Item 4.
Description of Securities
Not applicable.
Item 5.
Interests of Named Experts and Counsel
Not applicable.
Item 6.
Indemnification of Directors and Officers
Washington law provides that a director of a corporation shall not be personally liable for reasonable expenses incurred in the wholly successful defense of a proceeding to which the director was a party because of being a director. Washington law provides further that a director may be indemnified against liability incurred in a proceeding to which he or she is a party because of being a director so long as:
•
the director acted in good faith;
•
the director reasonably believed, in the case of conduct in the director’s official capacity, that his or her conduct was in the corporation’s best interests or, in all other cases, that his or her conduct was not opposed to the best interests of the corporation; and
•
in the case of a criminal proceeding, the director had no reasonable cause to believe his or her conduct was unlawful.
Directors generally may not, however, be indemnified:
•
in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation;
•
in connection with any other proceeding in which the director was adjudged liable for receiving improper personal benefit;
•
for acts or omissions of the director that involve intentional misconduct or knowing violation of law; or
•
for unlawful distributions to shareholders.

The Registrant’s amended and restated articles of incorporation and amended and restated bylaws provide that the Registrant will indemnify its directors and officers to the fullest extent permitted by law. The Registrant’s amended and restated bylaws also permit the Registrant to secure insurance on behalf of any officer or director for any liability arising out of his or her actions in connection with his or her services to the Registrant, regardless of whether the Registrant’s bylaws permit such indemnification.
The Registrant has entered into agreements to indemnify its directors and certain of its officers to the fullest extent allowed under Washington law. These agreements provide, among other things, that the Registrant will indemnify its directors and certain of its officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts reasonably




incurred by such person in any action or proceeding, including any action by or in the Registrant’s right, on account of any services undertaken by such person on the Registrant’s behalf or that person’s status as a director or officer of the Registrant. The Registrant also has obtained directors’ and officers’ liability insurance.
Item 7.
Exemption From Registration Claimed
Not applicable.
Item 8.
Exhibits

Exhibit
Number
  
Description
 
 
 
5.1+
 
 
 
 
23.1+
 
 
 
 
23.2+
 
 
 
 
23.3+
 
 
 
 
24.1+
 
 
 
 
99.1*
 
 
 
 
99.2+
 
 
 
 
+
Filed herewith.
*
Incorporated herein by reference.
Item 9.
Undertakings
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(b) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and
(c) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
provided , however , that paragraphs (1)(a) and (1)(b) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.




B.    The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
C.    Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.




SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Seattle, State of Washington, on August 8, 2019.
 
 
ZILLOW GROUP, INC.
 
 
 
 
 
 
By:
/s/ R ICHARD B ARTON
 
 
Name:
Richard Barton
 
 
Title:
Chief Executive Officer

POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Richard Barton and Allen Parker, or either of them, as his or her attorneys-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Registration Statement, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated below on August 8, 2019.
Signature
  
Title
 
 
 
          /s/ R ICHARD  B ARTON
  
Chief Executive Officer (Principal Executive Officer) and Director
          Richard Barton
 
 
 
          /s/ A LLEN  P ARKER
  
Chief Financial Officer (Principal Financial Officer)
          Allen Parker
 
 
 
 
          /s/  J ENNIFER  R OCK
  
Chief Accounting Officer (Principal Accounting Officer)
          Jennifer Rock
 
 
 
          /s/  L LOYD  D. F RINK
  
Executive Chairman, President and Director
          Lloyd D. Frink
 
 
 
          /s/  A MY  B OHUTINSKY
  
Director
          Amy Bohutinsky
 
 
 
          /s/  E RIK  B LACHFORD
  
Director
          Erik Blachford
 
 
 
          /s/  J AY  C. H OAG
  
Director
          Jay C. Hoag
 
 
 
          /s/  G REGORY  B. M AFFEI
  
Director
          Gregory B. Maffei
 
 
 
          /s/  S PENCER  M. R ASCOFF
  
Director
          Spencer M. Rascoff
 
 
 
          /s/  G ORDON  S TEPHENSON
  
Director
          Gordon Stephenson
 
 
 
          /s/  A PRIL  U NDERWOOD
  
Director
          April Underwood
 





Exhibit 5.1

[Perkins Coie LLP Letterhead]
August 8, 2019

Zillow Group, Inc.
1301 Second Avenue, Floor 31
Seattle, Washington 98101


Re:
Registration Statement on Form S-8 of shares of Class C capital stock, par value $0.0001 per share, of Zillow Group, Inc.
Ladies and Gentlemen:

We have acted as counsel to you in connection with the preparation of a Registration Statement on Form S-8 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), which you are filing with the Securities and Exchange Commission (the “Commission”) with respect to an additional 10,913,098 shares of Class C capital stock, par value $0.0001 per share (the “Shares”), of Zillow Group, Inc. (“Zillow Group”), of which (a) 913,098 shares may be issued under the Zillow Group, Inc. Amended and Restated 2011 Incentive Plan and (b) 10,000,000 shares may be issued under the Zillow Group, Inc. 2019 Equity Inducement Plan (collectively, the “Plans”).

We have examined the Registration Statement and such documents and records of Zillow Group as we have deemed necessary for the purposes of this opinion. In giving this opinion, we are assuming the authenticity of all instruments presented to us as originals, the conformity with originals of all instruments presented to us as copies and the genuineness of all signatures.

Based upon and subject to the foregoing, we are of the opinion that any original issuance Shares that may be issued pursuant to the Plans, upon the registration by its registrar of such Shares and the issuance thereof by Zillow Group in accordance with the terms of the applicable Plans, and the receipt of consideration therefor in accordance with the terms of the applicable Plans, will be validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Perkins Coie LLP






Exhibit 23.1

Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Registration Statement on Form S-8 of our reports dated February 21, 2019, relating to the consolidated financial statements of Zillow Group, Inc. (the “Company”) (which report expresses an unqualified opinion on the consolidated financial statements and includes an explanatory paragraph relating to a change in method of accounting for costs to obtain customer contracts during 2018), and the effectiveness of the Company’s internal control over financial reporting, appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

/s/ DELOITTE & TOUCHE LLP
Seattle, Washington
August 7, 2019





Exhibit 23.2

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Zillow Group, Inc. Amended and Restated 2011 Incentive Plan and the Zillow Group, Inc. 2019 Equity Inducement Plan of our report dated February 7, 2017, with respect to the consolidated financial statements of Zillow Group, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 2018, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP

Seattle, Washington
August 7, 2019





Exhibit 99.2
ZILLOW GROUP, INC.
2019 EQUITY INDUCEMENT PLAN

SECTION 1. PURPOSE
The purpose of the Zillow Group, Inc. 2019 Equity Inducement Plan is to attract, retain and motivate certain new employees of the Company and its Related Companies by providing them the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of the Company ’ s shareholders. Each Award under the Plan is intended to qualify as an employment inducement award pursuant to Listing Rule 5635(c) of the corporate governance rules of the NASDAQ Stock Market (the “ Listing Rule ” ).
SECTION 2. DEFINITIONS
Certain capitalized terms used in the Plan have the meanings set forth in Appendix A .
SECTION 3. ADMINISTRATION
3.1
Administration of the Plan
(a)      The Plan shall be administered by the independent members of the Board or the Compensation Committee, which shall be composed of two or more directors, each of whom is (i) a “ non‑employee director ” within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act, or any successor definition adopted by the Securities and Exchange Commission, and (ii) an “ independent ” director within the meaning of any applicable stock exchange listing rules.
(b)      All references in the Plan to the “ Committee ” shall be, as applicable, to the independent members of the Board or the Compensation Committee.
3.2
Administration and Interpretation by Committee
(a)      Subject to the terms and conditions of the Plan and applicable law, the Committee shall have full power and exclusive authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Committee, to (i) select the Eligible Persons to whom Awards may from time to time be granted under the Plan; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by each Award granted under the Plan; (iv) determine the terms and conditions of any Award granted under the Plan; (v) approve the forms of notice or agreement for use under the Plan; (vi) determine whether, to what extent and under what circumstances Awards may be settled in cash, Shares or other property or canceled or suspended; (vii) interpret and administer the Plan and any instrument evidencing an Award, notice or agreement executed or entered into under the Plan; (viii) establish such rules and regulations as it shall deem appropriate for the proper administration of the Plan; (ix) delegate ministerial duties to such of the Company ’ s employees as it so determines; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.




(b)      In no event, however, shall the Committee have the right, without shareholder approval, to (i) lower the exercise or grant price of an Option or SAR after it is granted, except in connection with adjustments provided in Section 14.1; (ii) cancel an Option or SAR at a time when its exercise or grant price exceeds the Fair Market Value of the underlying stock, in exchange for cash, another option or stock appreciation right, restricted stock, or other equity award; or (iii) take any other action that is treated as a repricing under generally accepted accounting principles.
(c)      The effect on the vesting of an Award of a Company-approved leave of absence or a Participant ’ s reduction in hours of employment or service shall be determined by the Company ’ s chief human resources officer or other person performing that function or, with respect to executive officers, by the Compensation Committee, whose determination shall be final.
(d)      Decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, any Participant, any shareholder and any Eligible Person. A majority of the members of the Committee may determine its actions.
SECTION 4. SHARES SUBJECT TO THE PLAN
4.1
Authorized Number of Shares
Subject to adjustment from time to time as provided in Section 14.1, 10,000,000 Shares are available for issuance under the Plan. Shares issued under the Plan shall be drawn from authorized and unissued Shares.
4.2
Share Usage
(a)      Shares covered by an Award shall not be counted as used unless and until they are actually issued and delivered to a Participant. If any Award lapses, expires, terminates or is canceled prior to the issuance of Shares thereunder or if Shares are issued under the Plan to a Participant and thereafter are forfeited to or otherwise reacquired by the Company, the Shares subject to such Awards and the forfeited or reacquired Shares shall again be available for issuance under the Plan. Any Shares (i) tendered by a Participant or retained by the Company as full or partial payment to the Company for the purchase price of an Award or to satisfy tax withholding obligations in connection with an Award, or (ii) covered by an Award that is settled in cash, or in a manner such that some or all of the Shares covered by the Award are not issued, shall be available for Awards under the Plan. The number of Shares available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional Shares or credited as additional Shares subject or paid with respect to an Award.
(b)      Notwithstanding any other provision of the Plan to the contrary, the Committee may grant Substitute Awards under the Plan. Substitute Awards shall not reduce the number of Shares authorized for issuance under the Plan. In the event that the Board approves a written agreement between the Company and an Acquired Entity pursuant to which a merger, consolidation or statutory share exchange is completed and that agreement sets forth the terms and conditions of the substitution for or assumption of outstanding awards of the Acquired Entity, those terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with Rule 16b‑3 under the Exchange Act, and the persons holding such awards shall be deemed to be Participants.




SECTION 5. ELIGIBILITY
An Award may be granted to any employee of the Company or a Related Company whom the Committee from time to time selects; provided, however, that Awards may be granted only to employees who (a) were not previously an employee or director of the Company or any Related Company or (b) previously provided services to the Company or any Related Company as an employee or director, but subsequently have completed a period of bona fide non-employment by the Company or any Related Company. In either case, an Award may be granted to an employee only as an incentive material to such employee entering into employment with the Company or any Related Company as provided in the Listing Rule. An “ employee ” as used in this Section 5 means any person, including an officer, employed by the Company or any Related Company. The payment of a director ’ s fee by the Company shall not be sufficient to constitute employment by the Company or any Related Company. A person eligible for an Award under the Plan may be granted more than one Award under the Plan.
SECTION 6. AWARDS
6.1
Form, Grant and Settlement of Awards
The Committee shall have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan. Such Awards may be granted either alone or in addition to or in tandem with any other type of Award. Any Award settlement may be subject to such conditions, restrictions and contingencies as the Committee shall determine.
6.2
Evidence of Awards
Awards granted under the Plan shall be evidenced by a written, including an electronic, instrument that shall contain such terms, conditions, limitations and restrictions as the Committee shall deem advisable and that are not inconsistent with the Plan.
6.3
Dividends and Distributions
Participants may, if the Committee so determines, be credited with dividends or dividend equivalents paid with respect to Shares underlying an Award in a manner determined by the Committee in its sole discretion. The Committee may apply any restrictions to the dividends or dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, Shares, Restricted Stock or Stock Units. Notwithstanding the foregoing, the right to any dividends or dividend equivalents declared and paid on the number of Shares underlying an Option or a Stock Appreciation Right may not be contingent, directly or indirectly, on the exercise of the Option or Stock Appreciation Right. Also notwithstanding the foregoing, the right to any dividends or dividend equivalents declared and paid on Awards must comply with or qualify for an exemption under Section 409A.
SECTION 7. OPTIONS
7.1
Grant of Options
The Committee may grant Options designated as Nonqualified Stock Options; provided, however, that Incentive Stock Options may be granted as Substitute Awards in exchange for incentive stock options granted by an Acquired Entity to the extent permitted by and in accordance with Sections 422 and 424 of the Code.




7.2
Option Exercise Price
Options shall be granted with an exercise price per Share not less than 100% of the Fair Market Value of a Share on the Grant Date, except in the case of Substitute Awards.
7.3
Term of Options
Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Option shall be ten years from the Grant Date.
7.4
Exercise of Options
(a)      The Committee shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable.
(b)      To the extent an Option has vested and become exercisable, the Option may be exercised in whole or from time to time in part by delivery to or as directed or approved by the Company of a properly executed stock option exercise agreement or notice, in a form and in accordance with procedures established by the Committee, setting forth the number of Shares with respect to which the Option is being exercised, the restrictions imposed on the Shares purchased under such exercise agreement or notice, if any, and such representations and agreements as may be required by the Committee, accompanied by payment in full as described in Section 7.5. An Option may be exercised only for whole Shares and may not be exercised for less than a reasonable number of Shares at any one time, as determined by the Committee.
7.5
Payment of Exercise Price
The exercise price for Shares purchased under an Option shall be paid in full to the Company by delivery of consideration equal to the product of the Option exercise price and the number of Shares purchased. Such consideration must be paid before the Company will issue the Shares being purchased and must be in a form or a combination of forms acceptable to the Committee for that purchase, which forms may include:
(a)      cash;
(b)      check or wire transfer;
(c)      having the Company withhold Shares that would otherwise be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the Shares being purchased under the Option;
(d)      tendering (either actually or, so long as the Shares are registered under Section 12(b) or 12(g) of the Exchange Act, by attestation) Shares owned by the Participant that have an aggregate Fair Market Value equal to the aggregate exercise price of the Shares being purchased under the Option;
(e)      so long as the Shares are registered under Section 12(b) or 12(g) of the Exchange Act, and to the extent permitted by law, delivery of a properly executed exercise agreement or notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of proceeds to pay the Option exercise price and any withholding tax obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board; or




(f)      such other consideration as the Committee may permit.
7.6
Effect of Termination of Service
The Committee shall establish and set forth in each instrument that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service. If not otherwise established in the instrument evidencing the Option, the Option shall be exercisable according to the following terms and conditions:
(a)      Any portion of an Option that is not vested and exercisable on the date of a Participant ’ s Termination of Service shall expire on such date.
(b)      Any portion of an Option that is vested and exercisable on the date of a Participant ’ s Termination of Service shall expire on the earliest to occur of:
(i)      if the Participant ’ s Termination of Service occurs for reasons other than Cause, Retirement, Disability or death, the date that is three months after such Termination of Service;
(ii)      if the Participant ’ s Termination of Service occurs by reason of Retirement, Disability or death, the one‑year anniversary of such Termination of Service; and
(iii)      the Option Expiration Date.
Notwithstanding the foregoing, if a Participant dies after his or her Termination of Service but while an Option is otherwise exercisable, the portion of the Option that is vested and exercisable on the date of such Termination of Service shall expire upon the earlier to occur of (y) the Option Expiration Date and (z) the one‑year anniversary of the date of death, unless the Committee determines otherwise.
Also notwithstanding the foregoing, in case a Participant ’ s Termination of Service occurs for Cause, all Options granted to the Participant shall automatically expire upon first notification to the Participant of such termination, unless the Committee determines otherwise. If a Participant ’ s employment or service relationship with the Company is suspended pending an investigation of whether the Participant shall be terminated for Cause, all the Participant ’ s rights under any Option shall likewise be suspended during the period of investigation. If any facts that would constitute termination for Cause are discovered after a Participant ’ s Termination of Service, any Option then held by the Participant may be immediately terminated by the Committee, in its sole discretion.
(c)      Notwithstanding the foregoing, if exercise of the Option following a Participant ’ s Termination of Service, but while the Option is otherwise exercisable, would be prohibited solely because the issuance of Shares upon exercise of the Option would violate the registration requirements under the Securities Act, then the Option shall remain exercisable until the earlier of (i) the Option Expiration Date and (ii) the expiration of a total period of three months, which time period need not be consecutive, after the Participant ’ s Termination of Service during which exercise of the Option would not be in violation of the Securities Act.
SECTION 8. STOCK APPRECIATION RIGHTS
8.1
Grant of Stock Appreciation Rights
The Committee may grant Stock Appreciation Rights to Participants on such terms and conditions as the Committee shall determine in its sole discretion, which terms and conditions shall be set forth in the




instrument evidencing the Award. An SAR may be granted in tandem with an Option (a “ tandem SAR ” ) or alone (a “ freestanding SAR ” ). The grant price of a tandem SAR shall be equal to the exercise price of the related Option. The grant price of a freestanding SAR shall be established in accordance with procedures for Options set forth in Section 7.2. An SAR may be exercised upon such terms and conditions and for such term as the Committee determines in its sole discretion; provided, however, that, subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the SAR, the maximum term of a freestanding SAR shall be ten years, and in the case of a tandem SAR, (a) the term shall not exceed the term of the related Option and (b) the tandem SAR may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option, except that the tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable.
8.2
Payment of SAR Amount
Upon the exercise of an SAR, a Participant shall be entitled to receive payment in an amount determined by multiplying: (a) the difference between the Fair Market Value of a Share on the date of exercise over the grant price of the SAR by (b) the number of Shares with respect to which the SAR is exercised. At the discretion of the Committee as set forth in the instrument evidencing the Award, the payment upon exercise of an SAR may be in cash, in Shares, in some combination thereof or in any other manner approved by the Committee in its sole discretion.
SECTION 9. STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS
9.1
Grant of Stock Awards, Restricted Stock and Stock Units
The Committee may grant Stock Awards, Restricted Stock and Stock Units on such terms and conditions and subject to such repurchase or forfeiture restrictions, if any, which may be based on continuous service with the Company or a Related Company or the achievement of any performance goals, as the Committee shall determine in its sole discretion, which terms, conditions and restrictions shall be set forth in the instrument evidencing the Award.
9.2
Vesting of Restricted Stock and Stock Units
Upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Stock Units, or upon a Participant ’ s release from any terms, conditions and restrictions on Restricted Stock or Stock Units, as determined by the Committee, (a) the Shares covered by each Award of Restricted Stock shall become freely transferable by the Participant, and (b) Stock Units shall be paid in Shares or, if set forth in the instrument evidencing the Awards, in cash or a combination of cash and Shares. Any fractional Shares subject to such Awards shall be paid to the Participant in cash.
SECTION 10. PERFORMANCE AWARDS
10.1
Performance Shares
The Committee may grant Awards of Performance Shares, designate the Participants to whom Performance Shares are to be awarded and determine the number of Performance Shares and the terms and conditions of each such Award. Performance Shares shall consist of a unit valued by reference to a designated number of Shares, the value of which may be paid to the Participant by delivery of Shares or, if set forth in the instrument evidencing the Award, of such property as the Committee shall determine, including, without limitation, cash, Shares, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions




specified by the Committee. The amount to be paid under an Award of Performance Shares may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.
10.2
Performance Units
The Committee may grant Awards of Performance Units, designate the Participants to whom Performance Units are to be awarded and determine the number of Performance Units and the terms and conditions of each such Award. Performance Units shall consist of a unit valued by reference to a designated amount of property other than Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including, without limitation, cash, Shares, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. The amount to be paid under an Award of Performance Units may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.
SECTION 11. OTHER STOCK OR CASH-BASED AWARDS
Subject to the terms of the Plan and such other terms and conditions as the Committee deems appropriate, the Committee may grant other incentives payable in cash or in Shares under the Plan.
SECTION 12. WITHHOLDING
(a)      The Company may require the Participant to pay to the Company or a Related Company, as applicable, the amount of (i) any taxes that the Company or a Related Company is required by applicable federal, state, local or foreign law to withhold with respect to the grant, vesting or exercise of an Award ( “ tax withholding obligations ” ) and (ii) any amounts due from the Participant to the Company or any Related Company ( “ other obligations ” ). Notwithstanding any other provision of the Plan to the contrary, the Company shall not be required to issue any Shares or otherwise settle an Award under the Plan until such tax withholding obligations and other obligations are satisfied.
(b)      The Committee, in its sole discretion, may permit or require a Participant to satisfy all or part of the Participant ’ s tax withholding obligations and other obligations by (i) paying cash to the Company or a Related Company, as applicable, (ii) having the Company or a Related Company, as applicable, withhold an amount from any cash amounts otherwise due or to become due from the Company or a Related Company, as applicable, to the Participant, (iii) having the Company withhold a number of Shares that would otherwise be issued to the Participant (or become vested, in the case of Restricted Stock) having a Fair Market Value equal to the tax withholding obligations and other obligations, (iv) surrendering a number of Shares the Participant already owns having a value equal to the tax withholding obligations and other obligations, (v) selling Shares issued under an Award on the open market or to the Company, or (vi) taking such other action as may be necessary in the opinion of the Committee to satisfy any applicable tax withholding obligations. The value of the Shares so withheld or tendered may not exceed the employer ’ s applicable minimum required tax withholding rate or such other applicable rate as is necessary to avoid adverse treatment for financial accounting purposes, as determined by the Committee in its sole discretion.
SECTION 13. ASSIGNABILITY
No Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the performance of an obligation or for any other purpose) or transferred by a Participant or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and




distribution, except to the extent the Participant designates one or more beneficiaries on a Company-approved form who may exercise the Award or receive payment under the Award after the Participant ’ s death. During a Participant ’ s lifetime, an Award may be exercised only by the Participant. Notwithstanding the foregoing, the Committee, in its sole discretion, may permit a Participant to assign or transfer an Award subject to such terms and conditions as the Committee shall specify.
SECTION 14. ADJUSTMENTS
14.1
Adjustment of Shares
(a)      In the event, at any time or from time to time, a stock dividend, stock split, spin‑off, combination or exchange of shares, recapitalization, merger, consolidation, statutory share exchange, distribution to shareholders other than a normal cash dividend, or other change in the Company ’ s corporate or capital structure results in (i) the outstanding Shares, or any securities exchanged therefor or received in their place, being exchanged for a different number or kind of securities of the Company or (ii) new, different or additional securities of the Company or any other company being received by the holders of Shares, then the Committee shall make proportional adjustments in (1) the maximum number and kind of securities available for issuance under the Plan and (2) the number and kind of securities that are subject to any outstanding Award and the per Share price of such securities, without any change in the aggregate price to be paid therefor. In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Shares, the Committee, in its sole discretion, may make appropriate adjustments to one or both of the items listed in clauses (1) and (2) above. The determination by the Committee as to the terms of any of the foregoing adjustments shall be conclusive and binding.
(b)      Notwithstanding the foregoing, the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services rendered, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding Awards. Also notwithstanding the foregoing, a dissolution or liquidation of the Company or a Change of Control shall not be governed by this Section 14.1 but shall be governed by Sections 14.2 and 14.3, respectively.
14.2
Dissolution or Liquidation
To the extent not previously exercised or settled, and unless otherwise determined by the Committee in its sole discretion, Awards shall terminate immediately prior to the dissolution or liquidation of the Company. To the extent a vesting condition, forfeiture provision or repurchase right applicable to an Award has not been waived by the Committee, the Award shall be forfeited immediately prior to the consummation of the dissolution or liquidation.
14.3
Change of Control
Notwithstanding any other provision of the Plan to the contrary, unless the Committee shall determine otherwise in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, in the event of a Change of Control:
(a)      All outstanding Awards that are subject to vesting based on continued employment or service with the Company or a Related Company shall become fully vested and immediately exercisable or payable, and all applicable restrictions or forfeiture provisions shall lapse, immediately prior to the Change of




Control and shall terminate at the effective time of the Change of Control; provided, however, that with respect to a Change of Control that is a Company Transaction in which such Awards could be converted, assumed, substituted for or replaced by the Successor Company, such Awards shall become fully vested and immediately exercisable or payable, and all applicable restrictions or forfeiture provisions shall lapse, only if and to the extent such Awards are not converted, assumed, substituted for or replaced by the Successor Company. If and to the extent that the Successor Company converts, assumes, substitutes for or replaces an Award, the vesting restrictions and/or forfeiture provisions applicable to such Award shall not be accelerated or lapse, and all such vesting restrictions and/or forfeiture provisions shall continue with respect to any shares of the Successor Company or other consideration that may be received with respect to such Award.
For the purposes of Section 14.3(a), an Award shall be considered converted, assumed, substituted for or replaced by the Successor Company if following the Company Transaction the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Company Transaction, the consideration (whether stock, cash or other securities or property) received in the Company Transaction by holders of Shares for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Company Transaction is not solely common stock of the Successor Company, the Committee may, with the consent of the Successor Company, provide for the consideration to be received pursuant to the Award, for each Share subject thereto, to be solely common stock of the Successor Company substantially equal in fair market value to the per Share consideration received by holders of Shares in the Company Transaction. The determination of such substantial equality of value of consideration shall be made by the Committee, and its determination shall be conclusive and binding.
(b)      All Performance Shares, Performance Units and other outstanding Awards that are subject to vesting based on the achievement of specified performance goals and that are earned and outstanding as of the date the Change of Control is determined to have occurred and for which the payout level has been determined shall be payable in full in accordance with the payout schedule pursuant to the instrument evidencing the Award. All Performance Shares, Performance Units and other outstanding Awards that are subject to vesting based on the achievement of specified performance goals for which the payout level has not been determined as of the date the Change of Control is determined to have occurred shall be prorated at the target payout level up to and including the date of such Change of Control and shall be payable in accordance with the payout schedule set forth in the instrument evidencing the Award. Any existing deferrals or other restrictions not waived by the Committee in its sole discretion shall remain in effect.
(c)      Notwithstanding the foregoing, the Committee, in its sole discretion, may instead provide in the event of a Change of Control that is a Company Transaction that a Participant ’ s outstanding Awards shall terminate upon or immediately prior to such Company Transaction and that such Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (x) the value of the per Share consideration received by holders of Shares in the Company Transaction, or, in the event the Company Transaction is one of the transactions listed under subsection (c) in the definition of Company Transaction or otherwise does not result in direct receipt of consideration by holders of Shares, the value of the deemed per Share consideration received, in each case as determined by the Committee in its sole discretion, multiplied by the number of Shares subject to such outstanding Awards (to the extent then vested and exercisable or whether or not then vested and exercisable, as determined by the Committee in its sole discretion) exceeds (y) if applicable, the respective aggregate exercise price or grant price for such Awards.




(d)      For the avoidance of doubt, nothing in this Section 14.3 requires all outstanding Awards to be treated similarly.
14.4
Further Adjustment of Awards
Subject to Sections 14.2 and 14.3, the Committee shall have the discretion, exercisable at any time before a sale, merger, consolidation, statutory share exchange, reorganization, liquidation, dissolution or change of control of the Company, as defined by the Committee, to take such further action as it determines to be necessary or advisable with respect to Awards. Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise, lifting restrictions and other modifications, and the Committee may take such actions with respect to all Participants, to certain categories of Participants or only to individual Participants. The Committee may take such action before or after granting Awards to which the action relates and before or after any public announcement with respect to such sale, merger, consolidation, statutory share exchange, reorganization, liquidation, dissolution or change of control that is the reason for such action.
14.5
No Limitations
The grant of Awards shall in no way affect the Company ’ s right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
14.6
Fractional Shares
In the event of any adjustment in the number of Shares covered by any Award, each such Award shall cover only the number of full Shares resulting from such adjustment, and any fractional Shares resulting from such adjustment shall be disregarded.
14.7
Section 409A
Notwithstanding any other provision of the Plan to the contrary, (a) any adjustments made pursuant to this Section 14 to Awards that are considered “ deferred compensation ” within the meaning of Section 409A shall be made in compliance with the requirements of Section 409A and (b) any adjustments made pursuant to this Section 14 to Awards that are not considered “ deferred compensation ” subject to Section 409A shall be made in such a manner as to ensure that after such adjustment the Awards either (i) continue not to be subject to Section 409A or (ii) comply with the requirements of Section 409A.
SECTION 15. AMENDMENT AND TERMINATION
15.1
Amendment, Suspension or Termination
The Committee may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable. Subject to Section 15.3 and compliance with the Listing Rule, the Committee may amend the terms of any outstanding Award, prospectively or retroactively.
15.2
Term of the Plan
Unless sooner terminated as provided herein, the Plan shall automatically terminate on the tenth anniversary of the Effective Date. After the Plan is terminated, no future Awards may be granted, but




Awards previously granted shall remain outstanding in accordance with their terms and conditions and the Plan ’ s terms and conditions.
15.3
Consent of Participant
The amendment, suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant ’ s consent, materially adversely affect any rights under any Award theretofore granted to the Participant under the Plan. Notwithstanding the foregoing, any adjustments made pursuant to Section 14 shall not be subject to these restrictions.
SECTION 16. GENERAL
16.1
No Individual Rights
No individual or Participant shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Participants under the Plan.
Furthermore, nothing in the Plan or any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate a Participant ’ s employment or other relationship at any time, with or without cause.
16.2
Issuance of Shares
(a)      Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue or deliver any Shares under the Plan or make any other distribution of benefits under the Plan unless, in the opinion of the Company ’ s counsel, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity.
(b)      The Company shall be under no obligation to any Participant to register for offering or resale or to qualify for exemption under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any Shares, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made.
(c)      As a condition to the exercise of an Option or any other receipt of Shares pursuant to an Award under the Plan, the Company may require (i) the Participant to represent and warrant at the time of any such exercise or receipt that such Shares are being purchased or received only for the Participant ’ s own account and without any present intention to sell or distribute such Shares and (ii) such other action or agreement by the Participant as may from time to time be necessary to comply with federal, state and foreign securities laws. At the option of the Company, a stop-transfer order against any such Shares may be placed on the official stock books and records of the Company, and a legend indicating that such Shares may not be pledged, sold or otherwise transferred, unless an opinion of counsel is provided (concurred in by counsel for the Company) stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates to ensure exemption from registration. The Committee may also require the Participant to execute and deliver to the Company a purchase agreement or such other agreement as may be in use by the Company at such time that describes certain terms and conditions applicable to the Shares.




(d)      To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of Shares, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.
16.3
Indemnification
(a)      Each person who is or shall have been a member of the Committee shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company ’ s approval, or paid by such person in satisfaction of any judgment in any such claim, action, suit or proceeding against such person, unless such loss, cost, liability or expense is a result of such person ’ s own willful misconduct or except as expressly provided by statute; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person ’ s own behalf.
(b)      The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person may be entitled under the Company ’ s articles of incorporation or bylaws, as a matter of law, or otherwise, or of any power that the Company may have to indemnify or hold harmless.
16.4
No Rights as a Shareholder
Unless otherwise provided by the Committee or in the instrument evidencing the Award or in a written employment, services or other agreement, no Award, other than a Stock Award, shall entitle the Participant to any cash dividend, voting or other right of a shareholder unless and until the date of issuance under the Plan of the Shares that are the subject of such Award.
16.5
Compliance with Laws and Regulations
(a)      The Plan and Awards granted under the Plan are intended to be exempt from the requirements of Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the exclusion applicable to stock options, stock appreciation rights and certain other equity-based compensation under Treasury Regulation Section 1.409A-1(b)(5), or otherwise. To the extent Section 409A is applicable to the Plan or any Award granted under the Plan, it is intended that the Plan and any Awards granted under the Plan shall comply with the deferral, payout and other limitations and restrictions imposed under Section 409A. Notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with such intentions. Without limiting the generality of the foregoing, and notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, with respect to any payments and benefits under the Plan or any Award granted under the Plan to which Section 409A applies, all references in the Plan or any Award granted under the Plan to the termination of the Participant ’ s employment or service are intended to mean the Participant ’ s “ separation from service, ” within the meaning of Section 409A(a)(2)(A)(i). In addition, if the Participant is a “ specified employee, ” within the meaning of Section 409A, then to the extent necessary to avoid subjecting the Participant to the imposition of any additional tax under Section 409A, amounts that would otherwise be payable under the Plan or any Award granted under the Plan during the six-month period immediately following the Participant ’ s “ separation from service, ” within the meaning of Section 409A(a)(2)(A)(i), shall not be paid to the Participant during such period, but shall instead be accumulated and paid to the Participant (or, in the event of the Participant ’ s death, the




Participant ’ s estate) in a lump sum on the first business day after the earlier of the date that is six months following the Participant ’ s separation from service or the Participant ’ s death. Notwithstanding any other provision of the Plan to the contrary, the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan and any Award granted under the Plan so that the Award qualifies for exemption from or complies with Section 409A; provided, however, that the Committee makes no representations that Awards granted under the Plan shall be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to Awards granted under the Plan.
(b)      Also notwithstanding any other provision of the Plan to the contrary, the Committee shall have broad authority to amend the Plan or any outstanding Award without the consent of the Participant to the extent the Committee deems necessary or advisable to comply with, or take into account, changes in applicable tax laws, securities laws, accounting rules or other applicable laws, rules or regulations.
16.6
Participants in Other Countries or Jurisdictions
Without amending the Plan, the Committee may grant Awards to Eligible Persons who are foreign nationals on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan and shall have the authority to adopt such modifications, procedures, subplans and the like as may be necessary or desirable to comply with provisions of the laws or regulations of other countries or jurisdictions in which the Company or any Related Company may operate or have employees to ensure the viability of the benefits from Awards granted to Participants employed in such countries or jurisdictions, meet the requirements that permit the Plan to operate in a qualified or tax-efficient manner, comply with applicable foreign laws or regulations and meet the objectives of the Plan.
16.7
No Trust or Fund
The Plan is intended to constitute an “ unfunded ” plan. Nothing contained herein shall require the Company to segregate any monies or other property, or Shares, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.
16.8
Successors
All obligations of the Company under the Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all the business and/or assets of the Company.
16.9
Severability
If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee ’ s determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.




16.10
Choice of Law and Venue
The Plan, all Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving effect to principles of conflicts of law. Participants irrevocably consent to the nonexclusive jurisdiction and venue of the state and federal courts located in the State of Washington.
16.11
Legal Requirements
The granting of Awards and the issuance of Shares under the Plan are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
16.12
Recoupment
Awards shall be subject to the requirements of (a) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder, (b) similar rules under the laws of any other jurisdiction, (c) any compensation recovery or clawback policies adopted by the Company to implement any such requirements, or (d) any other compensation recovery or clawback policies as may be adopted by the Company, all to the extent determined by the Committee in its discretion to be applicable to a Participant.
SECTION 17. EFFECTIVE DATE
The Plan shall become effective on the date the Board approves the Plan (the “ Effective Date ” ).




APPENDIX A
DEFINITIONS
As used in the Plan,
“ Acquired Entity ” means any entity acquired by the Company or a Related Company or with which the Company or a Related Company merges or combines.
“ Award ” means any Option, Stock Appreciation Right, Stock Award, Restricted Stock, Stock Unit, Performance Share, Performance Unit, cash-based award or other incentive payable in cash or Shares as may be designated by the Committee from time to time.
“ Board ” means the Board of Directors of the Company.
“ Cause , ” unless otherwise defined in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means dishonesty, fraud, serious or willful misconduct, unauthorized use or disclosure of confidential information or trade secrets, or conduct prohibited by law (except minor violations), in each case as determined by the Company ’ s chief human resources officer or other person performing that function or, in the case of executive officers, the Compensation Committee, whose determination shall be conclusive and binding.
“ Change of Control , ” unless the Committee determines otherwise with respect to an Award at the time the Award is granted or unless otherwise defined for purposes of an Award in a written employment, services or other agreement between the Participant and the Company or a Related Company, means the occurrence of any of the following events:
(a)      an acquisition by any Entity of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “ Outstanding Company Voting Securities ” ); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege where the security being so converted was not acquired directly from the Company by the party exercising the conversion privilege, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Company, (iv) any acquisition by a Founder Shareholder, provided that this clause (iv) shall terminate and be of no effect with respect to a Founder Shareholder at such time as such Founder Shareholder ’ s beneficial ownership of the Outstanding Company Voting Securities is less than 25%, or (v) any acquisition by any Entity pursuant to a transaction that meets the conditions of clauses (i), (ii) and (iii) set forth in the definition of Company Transaction;
(b)      a change in the composition of the Board during any two-year period such that the individuals who, as of the beginning of such two-year period, constitute the Board (the “ Incumbent Board ” ) cease for any reason to constitute at least a majority of the Board; provided, however, that for purposes of this definition, any individual who becomes a member of the Board subsequent to the beginning of the two-year period, whose election, or nomination for election by the Company ’ s shareholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; and provided further, however, that any




such individual whose initial assumption of office occurs as a result of or in connection with an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an Entity other than the Board shall not be considered a member of the Incumbent Board; or
(c)      the consummation of a Company Transaction.
“ Class B Common Stock ” means the Class B common stock, par value $0.0001 per share, of the Company.
“ Class C Capital Stock ” means the Class C capital stock, par value $0.0001 per share, of the Company.
“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.
“ Committee ” has the meaning set forth in Section 3.1.
“ Company ” means Zillow Group, Inc., a Washington corporation.
“ Company Transaction , ” unless the Committee determines otherwise with respect to an Award at the time the Award is granted or unless otherwise defined for purposes of an Award in a written employment, services or other agreement between the Participant and the Company or a Related Company, means consummation of:
(a)      a merger or consolidation of the Company with or into any other company;
(b)      a statutory share exchange pursuant to which all of the Company ’ s outstanding shares are acquired or a sale in one transaction or a series of transactions undertaken with a common purpose of all of the Company ’ s outstanding voting securities; or
(c)      a sale, lease, exchange or other transfer in one transaction or a series of related transactions undertaken with a common purpose of all or substantially all of the Company ’ s assets,
excluding, however, in each case, any such transaction pursuant to which
(i)      the Entities who are the beneficial owners of the Outstanding Company Voting Securities immediately prior to such transaction will beneficially own, directly or indirectly, at least 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Successor Company in substantially the same proportions as their ownership, immediately prior to such transaction, of the Outstanding Company Voting Securities;
(ii)      no Entity (other than the Company, any employee benefit plan (or related trust) of the Company, a Related Company or a Successor Company) will beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding voting securities of the Successor Company entitled to vote generally in the election of directors, unless such ownership resulted solely from ownership of securities of the Company prior to such transaction; and
(iii)      individuals who were members of the Incumbent Board will immediately after the consummation of such transaction constitute at least a majority of the members of the board of directors of the Successor Company.




Where a series of transactions undertaken with a common purpose is deemed to be a Company Transaction, the date of such Company Transaction shall be the date on which the last of such transactions is consummated.
“ Compensation Committee ” means the Compensation Committee of the Board.
“ Disability , ” unless otherwise defined by the Committee for purposes of the Plan in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means a mental or physical impairment of the Participant that is expected to result in death or that has lasted or is expected to last for a continuous period of 12 months or more and that causes the Participant to be unable to perform his or her material duties for the Company or a Related Company and to be engaged in any substantial gainful activity, in each case as determined by the Company ’ s chief human resources officer or other person performing that function or, in the case of executive officers, the Compensation Committee, whose determination shall be conclusive and binding.
“ Effective Date ” has the meaning set forth in Section 17.
“ Eligible Person ” means any person eligible to receive an Award as set forth in Section 5.
“ Entity ” means any individual, entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act).
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time.
“ Fair Market Value ” means the closing price of a Share on any given date during regular trading, or if not trading on that date, such price on the last preceding date on which the Shares were traded, unless determined otherwise by the Committee using such methods or procedures as it may establish.
“ Founder Shareholder ” means any holder of record of Class B Common Stock of the Company as of July 19, 2011.
“ Grant Date ” means the later of (a) the date on which the Committee completes the corporate action authorizing the grant of an Award or such later date specified by the Committee and (b) the date on which all conditions precedent to an Award have been satisfied, provided that conditions to the exercisability or vesting of Awards shall not defer the Grant Date.
“ Incentive Stock Option ” means an Option granted as a Substitute Award that is intended to qualify as an “ incentive stock option ” as that term is defined for purposes of Section 422 of the Code or any successor provision.
“ Incumbent Board ” has the meaning set forth in the definition of “ Change of Control. ”
“ Listing Rule ” has the meaning set forth in Section 1.
“ Nonqualified Stock Option ” means an Option other than an Incentive Stock Option.
“ Option ” means a right to purchase Shares granted under Section 7.
“ Option Expiration Date ” means the last day of the maximum term of an Option.
“ Outstanding Company Voting Securities ” has the meaning set forth in the definition of “ Change of Control. ”




“ Parent Company ” means a company or other entity which as a result of a Company Transaction owns the Company or all or substantially all of the Company ’ s assets either directly or through one or more subsidiaries.
“ Participant ” means any Eligible Person to whom an Award is granted.
“ Performance Award ” means an Award of Performance Shares or Performance Units granted under Section 10.
“ Performance Share ” means an Award of units denominated in Shares granted under Section 10.1.
“ Performance Unit ” means an Award of units denominated in cash or property other than Shares granted under Section 10.2.
“ Plan ” means the Zillow Group, Inc. 2019 Equity Inducement Plan, as amended and restated from time to time.
“ Related Company ” means any entity that is directly or indirectly controlled by, in control of or under common control with the Company.
“ Restricted Stock ” means an Award of Shares granted under Section 9, the rights of ownership of which are subject to restrictions prescribed by the Committee.
“ Restricted Stock Unit ” means a Stock Unit subject to restrictions prescribed by the Committee.
“ Retirement , ” unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means “ retirement ” as defined for purposes of the Plan by the Committee or the Company ’ s chief human resources officer or other person performing that function or, if not so defined, means Termination of Service on or after the date the Participant reaches “ normal retirement age, ” as that term is defined in Section 411(a)(8) of the Code.
“ Section 409A ” means Section 409A of the Code, including any regulations and other guidance issued thereunder by the Department of the Treasury and/or the Internal Revenue Service.
“ Securities Act ” means the Securities Act of 1933, as amended from time to time.
“ Share ” means a share of Class C Capital Stock.
“ Stock Appreciation Right ” or “ SAR ” means a right granted under Section 8.1 to receive the excess of the Fair Market Value of a specified number of Shares over the grant price.
“ Stock Award ” means an Award of Shares granted under Section 9, the rights of ownership of which are not subject to restrictions prescribed by the Committee.
“ Stock Unit , ” including a Restricted Stock Unit, means an Award denominated in units of Shares granted under Section 9.
“ Substitute Awards ” means Awards granted or Shares issued by the Company in substitution or exchange for awards previously granted by an Acquired Entity.




“ Successor Company ” means the surviving company, the successor company or Parent Company, as applicable, in connection with a Company Transaction.
“ Termination of Service , ” unless otherwise defined by the Committee for purposes of an Award in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means a termination of employment or service relationship with the Company or a Related Company for any reason, whether voluntary or involuntary, including by reason of death, Disability or Retirement. Any question as to whether and when there has been a Termination of Service for the purposes of an Award and the cause of such Termination of Service shall be determined by the Company ’ s chief human resources officer or other person performing that function or, with respect to executive officers, by the Compensation Committee, whose determination shall be conclusive and binding. Transfer of a Participant ’ s employment or service relationship between the Company and any Related Company shall not be considered a Termination of Service for purposes of an Award. Unless the Committee determines otherwise, a Termination of Service shall be deemed to occur if the Participant ’ s employment or service relationship is with an entity that has ceased to be a Related Company. A Participant ’ s change in status from an employee of the Company or a Related Company to a nonemployee director, consultant, advisor, or independent contractor of the Company or a Related Company shall not be considered a Termination of Service.
“ Vesting Commencement Date ” means the Grant Date or such other date selected by the Committee as the date from which an Award begins to vest.

















PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
SUMMARY PAGE
Date of Board
Action
Action
Section/Effect
of Amendment
Date of Shareholder
Approval
August 5, 2019
Initial Plan Adoption
 
Not Required