EMPLOYMENT AGREEMENT
This Agreement is made as of the ___ day of April, 1999 between Go2Net,
Inc., a Delaware corporation (the "Company"), and Xxxx Xxxxxxx, an individual
residing at [______________________] (the "Executive").
RECITALS
WHEREAS, the Company desires to employ the Executive as the Chief
Technology Officer of the Company, and the Executive desires to serve as the
Chief Technology Officer of the Company, on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive as the Chief
Technology Officer of the Company, and the Executive accepts such employment for
the term of employment specified in Section 3 below (the "Employment Term").
During the Employment Term, as the Chief Technology Officer of the Company, the
Executive shall, subject to the direction of the Chief Executive Officer of the
Company, perform such duties consistent with those duties ordinarily and
customarily performed by a person holding such position in similar
organizations, as may from time to time be reasonably assigned to him by the
Chief Executive Officer or the Board of Directors of the Company. The Company
acknowledges and acquiesces to the professional and personal obligations listed
Exhibit A over the course of the next eight months.
2. PERFORMANCE; LOCATION OF EMPLOYMENT; OTHER ACTIVITIES.
(a) The Executive agrees to devote his reasonable best efforts and
substantially all of his business time to the performance of his duties
hereunder during the Employment Term. The Executive will perform his duties
hereunder at the Company's executive offices, currently located in Seattle,
Washington.
(b) During the Employment Term, the Executive agrees that, unless he
has the express prior written approval of the Chief Executive Officer of the
Company, he shall not accept a membership on a Board of Directors of, or act as
an officer, employee or consultant to, any entity which is in a similar or
competing business of the Company that would in any way conflict with the
business of the Company or the time needed by the Executive to perform his
duties hereunder.
3. EMPLOYMENT TERM. The term of employment under this Agreement shall
begin on the date of this Agreement and continue until April 30, 2002 (the
"Initial Employment Term"). Employment shall thereafter continue on the basis
hereby established for successive one year terms unless, more than ninety days
prior to the expiration of the Initial Employment Term or any successive one
year term, either the Executive or the Company provides the other with written
notice that this Agreement will not be renewed (the "Subsequent Employment Term"
and with the Initial Employment Term, the "Employment Term"). Employment during
the Employment Term shall be subject to earlier termination in accordance with
the terms of this Agreement.
4. COMPENSATION.
(a) SALARY. During the Employment Term, the Company shall pay the
Executive a base salary, payable in equal installments in accordance with the
Company's then current compensation practices for all of its executives, subject
to withholding and other applicable taxes, at an annual rate of Ninety-Five
Thousand Dollars ($95,000). The base salary may be reviewed annually by the
Board of Directors, provided that the base salary shall not be decreased during
the Employment Term. The Company agrees to pay the Executive up to two weeks
vacation time during the pre-planned trip to Europe during the summer of 1999
(as is further described in Exhibit A). Such payment shall be recorded as an
advance against future earned vacation time.
(b) STOCK OPTIONS. Upon the execution and delivery of this
Agreement, the Executive shall be granted non-qualified stock options (the
"Options") to purchase 140,000 shares of Common Stock of the Company (the
"Common Stock") at an exercise price equal to the closing market price of the
Common Stock as reported on the Nasdaq National Market on the date of this
Agreement. Of the Options, (i) Options to purchase 30,000 shares of Common
Stock shall be immediately vested and exercisable on the date hereof, and
(ii) Options to purchase the remaining 110,000 shares of Common Stock shall
vest in eight equal semi-annual installments of 13,750 shares commencing on
October __, 1999. In the event the Executive's employment is terminated by
the Company without Cause (as defined herein) or by the Executive for Good
Reason (as defined herein), all Options shall immediately become vested and
exercisable. In the event that the Company accelerates the vesting of any
options held by any other employee of the Company in connection with a change
of control of the Company, then all Options held by the Executive shall be
accelerated and become vested and exercisable in the same manner as such
other options are accelerated. None of the options granted to the Executive
pursuant to this Employment Agreement shall be included in the acceleration
of options which are contingent upon the Company's outstanding transaction
with Vulcan Ventures, Inc.
(c) INSURANCE; OTHER BENEFITS. The Executive and his dependants
shall be entitled to receive full family medical, dental and disability
insurance, at the Company's expense. The Executive shall also be entitled to
participate in all executive benefit plans now existing or hereinafter
established by the Company, including, but not limited to, family medical and
dental plans, group life and disability insurance plans, life insurance plan;
pension, 401(k), profit sharing or bonus plans, and any other benefit plan or
arrangement made available to executive officers of the Company. In
addition, the Executive shall be entitled to the use of a parking space near
the Company's building, which shall be paid for by the Company.
(d) VACATION. The Executive shall be entitled to the same paid
vacation benefits as the other executive officers of the Company, to be
taken at such time or times as shall be mutually convenient and consistent
with his duties and obligations to the Company.
5. EXPENSES. The Executive shall be reimbursed by the Company for all
reasonable expenses incurred by him in connection with the performance of his
duties hereunder in accordance with policies established by the Board of
Directors from time to time and upon receipt of appropriate documentation.
6. TERMINATION.
(a) TERMINATION AT END OF TERM. The employment of the Executive
hereunder shall terminate at the end of the Initial Employment Term or any
Subsequent Employment Term if either party provides notice of termination at
least 90 days prior to expiration of the Initial Employment Term or
Subsequent Employment Term, or if earlier terminated by the Board of
Directors of the Company pursuant to this Section 6.
(b) TERMINATION BY THE COMPANY WITH CAUSE. The Company shall have
the right at any time to terminate the Executive's employment hereunder upon
the occurrence of any of the following (any such termination being referred
to as a termination for "Cause"): (i) the Executive has misappropriated or
done material, intentional damage to the Company or its business or financial
situation, (ii) the Executive shall have (A) failed or refused to perform the
reasonable or lawful duties reasonably assigned to him by the Chief Executive
Officer of Go2Net or another executive officer hereunder or (B) breached in
any material respect any one or more of the material provisions of this
Agreement or (C) failed to comply in any material respect with Go2Net''
employee policies, which failure, refusal or breach in (A), (B) or (C)
continues for a period of ten (10) days after written notice from the Company
describing such failure, refusal or breach,or (iii) the Executive has been
convicted of a felony involving moral turpitude.
(c) TERMINATION UPON DEATH OR DISABILITY. The Executive's
employment hereunder shall automatically terminate upon the Executive's death
or upon his inability to
perform his duties hereunder by reason of any mental, physical or other
disability for a period of at least six consecutive months, or six months
within any 18 month period, as determined by a qualified physician selected
by the Company and reasonably acceptable to the Executive or his guardian, in
the case where the Executive is incapacitated.
(d) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company shall
have the right to terminate the Executive's employment at any time prior to
the expiration of the Initial Employment Term or any Subsequent Employment
Term for any reason without Cause with at least ninety days written notice.
(e) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive
shall have the right to terminate his employment at any time for Good Reason
upon written notice to the Company. For purposes of this Agreement, "Good
Reason" shall mean (a) the failure to elect or appoint the Executive as Chief
Technology Officer or another comparable position of the Company, (b) the
Executive's authority or duties are materially changed without the prior
consent of the Executive, which change is not remedied within ten (10)
business days after written notice thereof is delivered to the Company by the
Executive, (c) any material breach of this Agreement by the Company, which
breach is not remedied within ten (10) business days after written notice
thereof is delivered to the Company by the Executive, or (d) the relocation
of Executive's place of work more than 30 miles from the Seattle, Washington
area. For purposes of this Agreement, the Executive's authority or duties
shall be deemed to be "materially changed" if, without the Executive's
consent, there is any diminution or adverse modification in the Executive's
title, compensation, responsibilities or reporting relationship.
(f) VOLUNTARY RESIGNATION. In addition to the right to terminate
his employment for Good Reason under Section 6(e) above, the Executive may
voluntarily terminate his employment at any time upon thirty days notice.
The provisions of Section 8 relating to non-disclosure shall immediately
become effective upon the Executive's resignation without Good Reason.
7. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) WITH CAUSE; RESIGNATION; DEATH OR DISABILITY. If the
Executive's employment is terminated with Cause pursuant to Section 6(b), if
the Executive's employment is terminated by the death or disability of the
Executive pursuant to Section 6(c) or if the Executive elects to terminate
his employment voluntarily under Section 6(f) (other than for Good Reason),
the Executive's salary and other benefits specified in Section 4 shall cease
at the time of such termination; provided, however, that (i) the Executive
shall be entitled to continue to participate in the Company's medical benefit
plans to the extent required by law and shall be entitled to the
reimbursement for expenses incurred by him through the date of termination
pursuant to Section
5, and (ii) in the case of termination due to death or disability, the
Executive or his estate shall continue to receive his then current annual
base salary payable under Section 4(a) for a period of three months from the
date of termination.
(b) WITHOUT CAUSE BY THE COMPANY. If the Executive's employment
is terminated either by the Company without Cause pursuant to Section 6(d) or
by the Executive for Good Reason pursuant to Section 6(e), in each case,
prior to the expiration of the Initial Employment Term or any Subsequent
Employment Term, the Executive's salary and other benefits specified in
Section 4 shall cease at the time of such termination, and the Executive
shall be entitled to receive his then current annual base salary payable
under Section 4(a) for a period of six months from the date of termination.
In addition, in any of such events or if the Company does not renew this
Agreement beyond the Initial Employment Term or Subsequent Employment Term
(i) the Executive shall also be entitled to receive any guaranteed bonus and
any bonus accrued or earned by the Executive through the date of termination
pursuant to Section 4(b) and the amount of any expenses incurred by the
Executive through the date of termination pursuant to Section 5, (ii) all
stock options then held by the Executive shall immediately vest and become
exercisable, and (iii) the Executive shall continue to receive the insurance
benefits specified in Section 4, at the Company's expense, until the
expiration of the Employment Term.
8. NON-DISCLOSURE OF BUSINESS INFORMATION. The Executive
acknowledges and agrees that by virtue of his employment with the Company,
the Executive will obtain such knowledge, know-how, training and experience
that is not generally known by those engaged in the Internet or World Wide
Web industry ("Trade Secrets"), and there is a possibility that such
knowledge, know-how, training and experience could be used by a competitor of
the Company to the Company's detriment. Therefore, the Executive covenants
and agrees, as follows: (a) the Executive agrees that he will not, at any
time during or after the Employment Term, disclose, reproduce, assign or
transfer to any person, firm, corporation or other business entity, except as
required by law, any Trade Secrets concerning the business, finances,
patents, affairs, business plans, strategies, methods, software, hardware,
results from ongoing investigations from others, and present and future plans
of the Company, any subsidiary or affiliate thereof or any company formed or
founded by the Company at any time for any reason or purpose whatsoever,
without the Company's express written consent; nor shall the Executive make
use of any such Trade Secrets for his own purpose or for the benefit of any
person, firm, corporation or other business entity, except the Company or any
subsidiary or affiliate thereof and upon the termination of the Executive's
employment for any reason, the Executive will immediately return all books,
files, papers, records and documents of any kind (including those contained
in computer disks) relating to the business of the Company; (b) during the
period which the Executive is employed by the Company and for a period of one
year thereafter, the Executive shall not, without the prior written consent
of the Company, engage in, for any purpose whatsoever, any activity that
competes directly with the Company, except that the Executive shall have no
obligations under
this clause (b) in the event he is terminated by the Company without Cause or
he elects to terminate his employment for Good Reason, and (c) the Executive
shall not, without the prior written consent of the Company, within the one
year period following the termination of his employment solicit any employee
of the Company to join the Executive as a partner, employee or consultant in
any Internet or World Wide Web related enterprise that competes directly with
the Company.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE EXECUTIVE. The
Executive represents that he has the capacity and desire to enter into this
Agreement, and the voluntary execution, delivery and performance of the
Agreement and compliance with its provisions will not conflict with or result
in any breach of any of the terms, conditions, obligations, covenants or
provisions of, or constitute a default under, any note, mortgage, agreement,
contract or instrument to which the Executive is a party or by which he may
be bound or affected, including specifically any pre-existing or existing
consulting, employment, or independent contractor arrangements,
understandings, or agreements whether written or oral.
10. INSURANCE. The Company may purchase insurance on the life of the
Executive, and if it does so, the Executive shall cooperate fully by
performing all the requirements of the life insurer which are necessary
conditions precedent to the issuance of the life insurance policy issued by
it.
11. NOTICE. Any notices required or permitted hereunder shall be in
writing and shall be deemed to have been given when personally delivered or
when mailed, certified or registered mail, postage prepaid, to the following
addresses or such other address as to which notice is given in the manner
provided herein:
If to the Executive:
If to the Company:
Go2Net, Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxxxxx
12. GENERAL.
(a) GOVERNING LAW; SUBMISSION TO JURISDICTION. The terms of this
Agreement
shall be governed by and construed under the laws of the State of Washington
without regard to its principles of conflicts of laws. Accordingly, to the
extent a restriction contained in this Agreement is more restrictive than
permitted by the laws of any jurisdiction where this Agreement may be subject
to review and interpretation, the terms of such restriction, for the purpose
only of the operation of such restriction in such jurisdiction, shall be the
maximum restriction allowed by the laws of such jurisdiction and such
restriction shall be deemed to have been revised accordingly herein. The
parties hereto irrevocably agree that all claims relating to this Agreement
shall be submitted exclusively to federal and state courts located in the
County of King and the State of Washington and irrevocably consent to the
jurisdiction and venue of such courts and service of process by certified or
registered mail, return receipt requested, directed to the parties at the
addresses set forth herein or as otherwise provided by law.
(b) REMEDY FOR BREACH OF SECTION 8. It is acknowledged by the
Executive that he will be devoting his work efforts towards establishing
relationships for the Company; that the Executive will be knowledgeable in
all aspects of the business, including the type of transactions the Company
is involved with, thus, the Executive would be able to enter the same
business as the Company and unfairly compete against the Company to its
detriment. Thus, the restrictions contained in Section 8 and the provisions
contained in this Section regarding injunctive relief are reasonable and
justified. The Executive agrees that irreparable injury to the Company will
inevitably occur in the event of any breach of the terms and conditions of
this Agreement and, specifically, if Section 8 is breached by the Executive.
The Executive agrees in such event that the Company shall be entitled, in
addition to any other remedies available to it, without proof of monetary or
immediate damage, to seek an action for any injunction to retrain any
violation of this Agreement by the Executive and all persons acting for or
with the Executive.
(c) ASSIGNABILITY. The Executive may not assign his interest in
or delegate his duties under this Agreement. The Company may not assign the
Agreement or the rights and obligations hereunder without written consent of
Executive.
(d) BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Company, its permitted successors and assigns,
and the Executive, his representatives and heirs.
(e) ENTIRE AGREEMENT; MODIFICATION. This Agreement and the Option
Grant Agreement constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and they and may not be modified or
amended in any way except in writing by the parties hereto.
(f) DURATION. Notwithstanding the term of employment hereunder, this
Agreement shall continue for so long as any obligations remain under this
Agreement.
* * *
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
hereunto executed this Agreement the day and year first written above.
GO2NET, INC.
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
EXECUTIVE
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Exhibit A
Xxxx Xxxxxxx has the following outstanding obligations that will be completed
by Sep. 31, 1999:
- chair the Review of Progress Committee for the computer science
department at UW (2 days of work in May).
- chair the Agents '99 Conference (May 1 - 5).
- Host Dr. Xxxxx Xxxxx (May 7).
- chair and guide the Ph.D. dissertations of Xxxx Xxxxx, Xxxx Xxxxxxx, and
Xxxx Xxxxxxxxx. All three are scheduled to defend their dissertations this
summer. (at most 1 day per week).
- Already booked trip to Europe to deliver invited talks, attend
professional meetings, and visit family from July 26 to August 21. Note: I
will be in e-mail contact and be able to work remotely during this trip.
