EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT
(the
“Agreement”) entered into as of July 27, 2005, by and between GuruNet
Corporation, with offices at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000
(the “Company”) and Xxxxx X. Xxxxx (“Executive”), residing at 0000 Xxxxxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000.
WHEREAS,
Executive desires to become employed by the Company, and the Company desires
to
employ Executive upon the terms and conditions hereinafter set
forth;
NOW,
THEREFORE,
the
parties hereto, intending to be legally bound, hereby agree as
follows:
1. Employment.
The
Company hereby agrees to employ Executive, and Executive hereby accepts such
employment and agrees to perform Executive's duties and responsibilities, in
accordance with the terms, conditions and provisions hereinafter set forth.
This
Agreement shall be effective as of the date set forth above, and shall continue
until it is terminated in accordance with Section 2 hereof. Nothing in this
Agreement shall be construed as giving Executive any right to be retained in
the
employ of the Company, and Executive specifically acknowledges that he shall
be
an employee-at-will of the Company, and thus subject to discharge at any time
by
the Company with or without Cause and without compensation of any nature except
as provided in this Agreement.
1.1. Duties
and Responsibilities.
Commencing July 27, 2005 (the
"Effective Date"), Executive shall serve as the Vice President of Investor
Relations and Strategic Development of the Company, reporting to the CEO.
Executive shall perform all duties and accept all responsibilities incident
to
such position as such tasks that may be reasonably assigned to him by the
CEO.
1.2. Extent
of Service.
Executive agrees to use Executive's best efforts to carry out Executive's duties
and responsibilities under Section 1.1 hereof and, consistent with the other
provisions of this Agreement, to devote substantially all of Executive's
business time, attention and energy thereto. The foregoing shall not be
construed as preventing Executive from making investments in other businesses
or
enterprises, provided that Executive agrees not to become engaged in any other
business activity which, in the reasonable judgment of the Board, is likely
to
interfere with Executive's ability to discharge Executive's duties and
responsibilities to the Company.
1.3. Base
Salary.
For all
the services rendered by Executive hereunder, the Company shall pay Executive
a
base salary ("Base Salary"), commencing on the Effective Date, at the annual
rate of $175,000, payable in installments at such times as the Company
customarily pays its other senior level executives.
1.4. Bonus.
Executive shall be eligible to receive an annual bonus derived from a percentage
of his base salary based upon stated performance goals for the Company and
Executive. The applicable percentage and performance goals will be tied to
Company and individual performance and will be determined by the Company’s
Compensation Committee, in consultation with the CEO.
1.5. Option.
The
Company shall grant to Executive an option (the "Option") to purchase 75,000
shares of
common
stock of the Company at the market closing price of the stock on the Effective
Date, pursuant to the GuruNet Corporation 2004 Stock Plan (the “Plan”). A form
of Stock Option Agreement, attached hereto as Exhibit
A,
shall
govern the terms and conditions of the Option.
1.6. Change
of Control Event.
In the
event of a “Change of Control,” as defined below, the Board shall take the
necessary steps to accelerate the vesting of 50% of the Option and any options
granted to Executive subsequent to this Agreement that have not vested as of
the
effective date of the Change of Control. Furthermore and notwithstanding the
notice provision of Section 2.1, below, should Executive’s employment be
terminated without cause at any time during a period of twelve (12) months
subsequent to the effective date of a Change of Control, Executive will be
entitled to three (3) months written notice and the Board shall take the
necessary steps so that any unvested options that were granted pursuant to
this
Agreement and subsequent to the date of this Agreement shall vest immediately
upon the effective date of Executive’s termination. A Change of Control shall
mean (a) the consummation of a merger or consolidation of the Company with
or
into another entity or any other corporate reorganization, if persons who were
not stockholders of the Company immediately prior to such merger, consolidation
or other reorganization own immediately after such merger, consolidation or
other reorganization 50% or more of the voting power of the outstanding
securities of each of the (i) continuing or surviving entity and (ii) any direct
or indirect parent corporation of such continuing or surviving entity; or (b)
the sale, transfer or other disposition of all or substantially all of the
Company’s assets. A Change of Control shall not be deemed to have occurred as a
consequence of a secondary offering.
1.7. Retirement
and Welfare Plans.
Executive shall be entitled to participate in all employee retirement and
welfare benefit plans and programs made available to the Company's senior level
executives as a group or to its employees generally, as such retirement and
welfare plans may be in effect from time to time and subject to the eligibility
requirements of such plans.
1.8. Reimbursement
of Expenses; Vacation.
Executive shall be provided with reimbursement of reasonable expenses related
to
Executive's employment by the Company on a basis no less favorable than that
which may be authorized from time to time for senior level executives as a
group; shall be entitled to three (3) weeks
of
paid vacation each year, adding one (1) day for each year from the date of
initial employment up to a total maximum of twenty-two (22) days annually,
and
additional time off for sick leave and holidays in accordance with the Company's
vacation, holiday and other pay for time not worked policies. The Company shall
maintain a standard Directors & Officers Insurance policy that covers the
Executive for any action during the term of his employment and maintain or
cause
such policy to remain in effect to cover claims that arise after Executive’s
termination of employment which relate to activity that occurred prior to
Executive’s termination of employment with the Company.
2. Termination.
Executive's
employment shall terminate upon the occurrence of any of the following
events:
2.1. Voluntary
Termination By Either Party.
Either
party may terminate the Executive’s employment with the Company without cause at
any time upon three (3) months written notice. The Company shall have the right,
in its sole discretion, to require Executive to continue working for the Company
during the notice period. If the Company terminates Executive without cause
pursuant to this Section 2.1, the Board shall take the necessary steps so that
the period during which Executive shall be permitted to exercise his stock
options, shall be extended to one (1) year from the effective date of his
termination.
2.2. Disability.
The
Company may terminate Executive's employment if Executive has been unable to
perform the material duties of his employment due to a disability which (i)
continues for
more
than
ninety (90) days and (ii) cannot be reasonably accommodated (the "Disability").
If the Company terminates Executive's employment for Disability, Executive
shall
be entitled to receive the following:
(a) The
Company shall pay to Executive any amounts earned, accrued or owing but not
yet
paid under Section 1 above.
(b) Executive
shall receive any other benefits accrued or earned in accordance with the terms
of any applicable benefit plans and programs of the Company.
2.3. Death.
If
Executive dies while employed by the Company, the Company shall pay to
Executive's executor, legal representative, administrator or designated
beneficiary, as applicable, (i) any amounts earned, accrued or owing but not
yet
paid under Section 1 above and any benefits accrued or earned under the
Company's benefit plans and programs. Otherwise, the Company shall have no
further liability or obligation under this Agreement to Executive's executors,
legal representatives, administrators, heirs or assigns or any other person
claiming under or through Executive.
2.4. Cause.
The
Company may terminate Executive's employment at any time for "Cause" upon
immediate written notice to Executive, in which event all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued.
Executive shall be entitled to any benefits accrued or earned before his
termination in accordance with the terms of any applicable benefit plans and
programs of the Company. For purposes of this Section 2.4, the term "Cause"
shall mean the occurrence of any one or more of the following: (i) Any act
of
fraud or dishonesty or gross negligence; (ii) Executive’s willful misconduct
which materially injures the Company; (iii) Executive’s conviction by, or entry
or a plea of guilty or nolo contendre in, a court of competent jurisdiction
for
any crime which constitutes a felony in the jurisdiction involved, or (iv)
a
material breach by Executive of any other provision hereof, including but not
limited to, the habitual neglect or gross failure by Executive to adequately
perform the duties of his position, or of any other contractual or legal
fiduciary duty to the Company.
2.5. Notice
of Termination.
Any
termination of Executive's employment shall be communicated by a written notice
of termination to the other party hereto given in accordance with Section 8.
The
notice of termination shall (i) indicate the specific termination provision
in
this Agreement relied upon, (ii) briefly summarize the facts and circumstances
deemed to provide a basis for a termination of employment and the applicable
provision hereof, and (iii) specify the termination date in accordance with
the
requirements of this Agreement.
3. Covenant
Not to Compete.
Executive acknowledges that the nature of the Company's business is such that
if
Executive were to become employed by, or substantially involved in, the business
of a competitor of the Company while employed by the Company and for 12 months
following the termination of Executive's employment by the Company, for whatever
reason, it would be very difficult for the Executive not to rely on or use
the
Company's trade secrets and confidential information (the "Non-Compete Period").
Thus, to avoid the inevitable disclosure of the Company's trade secrets and
confidential information, during the Non-Compete Period, Executive agrees not
to
directly or indirectly engage in (whether as an employee, consultant,
proprietor, partner, director or otherwise), nor have any ownership interest
in
or participate in the financing, operation, management or control of, any
person, firm, corporation or business that competes with the business the
Company was pursuing or had documented concrete plans to pursue at the time
of
the termination of the Executive's employment as described above, or is a
customer of the Company at the time of the termination of the Executive's
employment. In addition, during the Non-Compete Period, Executive will not
directly or indirectly: (a) solicit, encourage, recruit or take any other action
which is intended to induce any other employee, independent contractor, customer
or supplier of the Company or any affiliated corporation to terminate his,
her
or its relationship with the Company or any affiliated corporation; or (b)
interfere in any manner with the contractual or employment relationship between
the Company or any affiliated corporation and any employee, independent
contractor, customer or supplier of the Company or any affiliated corporation.
The foregoing restrictions shall not preclude Executive from purchasing,
receiving or holding (directly or indirectly) solely as a passive investment
5%
or less of the outstanding stock, other securities or other equity participation
interests of any entity.
4. Non-Disclosure.
Executive
acknowledges that during the course of his performance of services for the
Company, he will acquire technical knowledge with respect to the Company’s
business operations, including, by way of illustration, the Company’s existing
and contemplated products (current and future), trade secrets, methods, secrets,
formulas, data, patents, know how, models, compilations, business and financial
methods or practices, plans, pricing, marketing, merchandising and selling
techniques and information, customer lists, supplier lists, plans, price lists,
technical information, data and know-how (whether for its own use or for use
by
Company clients) and including, without limitation, confidential information
relating to the Company’s policies and/or business strategy and business and
operations of the Company’s affiliates (all of such information herein
referenced to as the "Confidential Information"); provided, however that the
term "Confidential Information" shall not include (a) any information which
is
or becomes publicly available otherwise than through breach of this Agreement
or
(b) any information which is or becomes known or available to Executive on
a
non-confidential basis and not in contravention of applicable law from a source
which is entitled to disclose such information to Executive. Executive agrees
that he will not, while he is employed by the Company, divulge to any person,
directly or indirectly, except to the Company or its officers, employees and
agents or as reasonably required in connection with his duties on behalf of
the
Company, or use, except on behalf of the Company, any Confidential Information.
Executive agrees that he will not, at any time after his employment with the
Company has ended, divulge to any person directly or indirectly any Confidential
Information nor use the Confidential Information in any way detrimental to
the
Company. Executive further agrees that if his relationship with the Company
is
terminated (for whatever reason) he shall not take with him but will leave
with
the Company all records, papers and computer software and data and any copies
thereof relating to the Confidential Information (or if such papers, records,
computer software and data or copies are not on the premises of the Company,
Executive agrees to return such papers, records and computer software and data
immediately upon his termination). Executive acknowledges that all such papers,
records, computer software and data or copies thereof are and remain the
property of the Company.
5. Intellectual
Property Rights.
Executive
agrees that all proprietary information, including but not limited to, trade
secrets and know-how, corporate documents and records, investor-lists, policies,
copyrights, inventions, methods, innovations, improvements, discoveries or
developments relating to the Company’s business or method of conducting
business, including new contributions, improvements and ideas, whether or not
patentable, copyrightable or in any other way legally protected ("Inventions"),
conceived or made by Executive, either solely or jointly with others, during
Executive’s employment with the Company which arise out of Executive’s
employment or exposure to Confidential Information shall belong to and be the
sole property of the Company. Executive assigns to the Company any rights
Executive may have or acquire in such Inventions and agrees to execute all
instruments and documents and to perform all actions which may be reasonably
requested by the Board to establish, confirm and vest in the Company such
ownership.
6. Survivorship.
The
respective rights and obligations of the parties under this Agreement shall
survive any termination of Executive's employment to the extent necessary to
the
intended preservation of such rights and obligations.
7. Arbitration;
Expenses.
In the
event of any dispute under the provisions of this Agreement, other than a
dispute in which the primary relief sought is an equitable remedy such as an
injunction, the parties shall be required to have the dispute, controversy
or
claim settled by arbitration in New York in accordance with the National Rules
for the Resolution of Employment Disputes then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and Executive, respectively, and the third of whom
shall be selected by the other two arbitrators. Any award entered by the
arbitrators shall be final, binding and nonappealable and judgment may be
entered thereon by either party in accordance with applicable law in any court
of competent jurisdiction. This arbitration provision shall be specifically
enforceable. The arbitrators shall have no authority to modify any provision
of
this Agreement or to award a remedy for a dispute involving this Agreement
other
than a benefit specifically provided under or by virtue of the Agreement. Each
party shall be responsible for its/his own expenses relating to the conduct
of
the arbitration (including reasonable attorneys' fees and expenses) and shall
share the fees of the American Arbitration Association.
8. Notices.
All
notices and other communications required or permitted under this Agreement
or
necessary or convenient in connection herewith shall be in writing and shall
be
deemed to have been given when hand delivered or mailed by registered or
certified mail, as follows (provided that notice of change of address shall
be
deemed given only when received):
If
to the
Company, to:
GuruNet
Corporation
Xxxxxxxx
00
Xxxxxxxxx
Xxxxxxxxxx Xxxx
Xxxxxxxxx
00000
Israel
Attention:
Xxxxxx X. Xxxxxxxxxxx, CEO
If
to
Executive, to:
Xxxxx
Xxxxx
_______________
_______________
or
to
such other names or addresses as the Company or Executive, as the case may
be,
shall designate by notice to each other person entitled to receive notices
in
the manner specified in this Section.
9. Contents
of Agreement; Amendment and Assignment.
(a) This
Agreement sets forth the entire understanding between the parties hereto with
respect to the subject matter hereof and cannot be changed, modified, extended
or terminated except upon written amendment approved by the Company, after
consultation with the Company’s Compensation Committee, and executed on its
behalf by a duly authorized officer and by Executive.
(b) All
of
the terms and provisions of this Agreement shall be binding upon and inure
to
the benefit of and be enforceable by the respective heirs, executors,
administrators, legal representatives, successors and assigns of the parties
hereto, except that the duties and responsibilities of Executive under this
Agreement are of a personal nature and shall not be assignable or delegatable
in
whole or in part by Executive. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation, reorganization or
otherwise) to all or substantially all of the business or assets of the Company,
within 15 days of such succession, expressly to assume and agree to perform
this
Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
10. Severability.
If any
provision of this Agreement or application thereof to anyone or under any
circumstances is adjudicated to be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect any other provision or
application of this Agreement which can be given effect without the invalid
or
unenforceable provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction. If any
provision is held void, invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.
11. Remedies
Cumulative; No Waiver.
No
remedy conferred upon a party by this Agreement is intended to be exclusive
of
any other remedy, and each and every such remedy shall be cumulative and shall
be in addition to any other remedy given under this Agreement or now or
hereafter existing at law or in equity. No delay or omission by a party in
exercising any right, remedy or power under this Agreement or existing at law
or
in equity shall be construed as a waiver thereof, and any such right, remedy
or
power may be exercised by such party from time to time and as often as may
be
deemed expedient or necessary by such party in its sole discretion.
12. Beneficiaries/References.
Executive shall be entitled, to the extent permitted under any applicable law,
to select and change a beneficiary or beneficiaries to receive any compensation
or benefit payable under this Agreement following Executive's death by giving
the Company written notice thereof. In the event of Executive's death or a
judicial determination of Executive's incompetence, reference in this Agreement
to Executive shall be deemed, where appropriate, to refer to Executive's
beneficiary, estate or other legal representative.
13. Miscellaneous.
All
section headings used in this Agreement are for convenience only. This Agreement
may be executed in counterparts, each of which is an original. It shall not
be
necessary in making proof of this Agreement or any counterpart hereof to produce
or account for any of the other counterparts.
14. Withholding.
All
payments under this Agreement shall be made subject to applicable tax
withholding, and the Company shall withhold from any payments under this
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation. Except as
specifically provided otherwise in this Agreement, Executive shall bear all
expense of, and be solely responsible for, all federal, state and local taxes
due with respect to any payment received under this Agreement.
15. Governing
Law.
This
Agreement shall be governed by and interpreted under the laws of the State
of
New York without giving effect to any conflict of laws provisions.
IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
this Agreement as of the date first above written.
| GuruNet Corporation | ||
| |
|
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| By: | /s/ Xxxxxx X. Xxxxxxxxxxx | |
|
Name: Xxxxxx X. Xxxxxxxxxxx |
||
| Title: Chief Executive Officer | ||
|
|
||
| Executive | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxx | |
|
Xxxxx Xxxxx |
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