ZipRealty: Votes against chairman’s re-election unrelated to nondisclosure agreement

ZipRealty board Chairman Donald Wood was re-elected Thursday with 8.2 million votes, but 4 million votes were also cast against him as the company’s accumulated deficit climbed to $136.7 million as of the end of the first quarter, the San Francisco Business Times reported.

The only other director up for re-election last week, Elisabeth DeMarse, won with 10.4 million votes in her favor and 1.9 million against.

Wood has been on ZipRealty’s board since 1999 and has been chairman since 2006, the Business Times reported.

“We cannot speak on behalf of those who voted or offer comment on shareholders’ motivations for their votes,” ZipRealty CEO Lanny Baker told Inman News.

Also last week, ZipRealty signed a nondisclosure agreement with hedge fund and ZipRealty shareholder Osmium Partners “to explore a potential business opportunity under which each party may disclose its confidential information to the other party solely for the purpose of that potential business opportunity.”

On June 3, Osmium Partners disclosed that it has upped its stake in ZipRealty to 13.6 percent (from 12.8 percent a year ago). The nondisclosure agreement includes a “standstill agreement” in which Osmium Partners agreed to buy no more shares of ZipRealty for six months. According to Investopedia, a standstill agreement is sometimes employed as a strategy to thwart a hostile takeover.

“We signed a nondisclosure agreement with Osmium Partners, which means we are under agreement not to disclose anything. The agreement is not related to the shareholder vote,” Baker said.

Shares in ZipRealty, which have traded in a range from $2.81 to $7.07 in the last 12 months, were up 5 percent today to close at $3.19 in light trading.

Source: bizjournals.com


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