EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT
(“Agreement”)
entered into as of December 1, 2005 by and between Answers Corporation,
(“Company”)
and
Xxxxx Xxxxxxxxxx (“Employee”).
WHEREAS,
the
Company and Employee are parties to that certain Purchase Agreement dated
as of
even date herewith (the “Purchase
Agreement”),
pursuant to which, among other things, (i) the Company has agreed to purchase
all of the limited liability interests in Brainboost Technology, LLC from
Brainboost Partnership, and (ii), the Company will own title to and all rights
associated with certain proprietary technology (a/k/a the Brainboost Answer
Engine; “BAE”); and
WHEREAS,
the
Company plans to integrate the BAE into its product(s) and, for purposes
of such
integration, seeks the knowledge and expertise gained by Employee during
his
development of the BAE; and
WHEREAS,
Employee desires to become employed by the Company, and the Company desires
to
employ Employee upon the terms and conditions hereinafter set
forth;
NOW,
THEREFORE,
the
parties hereto, intending to be legally bound, hereby agree as
follows:
1. Definition
of Certain Terms.
Capitalized terms used in this Agreement but not defined herein shall have
the
meanings ascribed to such terms in the Purchase Agreement.
2. Employment.
The
Company hereby agrees to employ Employee, and Employee hereby accepts such
employment and agrees to perform Employee'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 in Section 2.1 below,
and
shall continue until it is terminated in accordance with Section 3 hereof.
Nothing in this Agreement shall be construed as giving Employee any right
to be
retained in the employ of the Company, and Employee 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.
2.1. Duties
and Responsibilities.
Commencing December 5, 2005 (the “Effective Date”), Employee shall serve as the
Director of Natural Language Research of the Company, reporting to the Company’s
Chief Technical Officer (or, alternatively, another product development
executive, if applicable). Employee shall perform all duties and accept all
responsibilities incident to such position as such tasks that may be reasonably
assigned to him by his supervisor and by the Company’s CEO relating to the
assistance with the integration of the BAE into the Company’s product(s) and
further development of the BAE. The parties agree that Employee will be
responsible, among other things, for leading a team, the size, composition
and
location of which shall be determined by agreement of the Company and Employee,
to address the porting, integration and continued development of the BAE.
2.2. Relocation.
Employee undertakes to spend up to six (6) months, commencing no later than
January 1, 2006 (the “Travel Date”), in Israel, working out of the Company’s
R&D facilities in Jerusalem, for purposes of ensuring a smooth integration
of the BAE into the Company’s product(s) (the “Relocation Period”). Employee
acknowledges that management may request that the Relocation Period be extended
or shortened, and will reasonably cooperate to meet the Company’s needs in this
respect. During the Relocation Period, Employee shall be entitled to the
coverage by the Company of (i) one (1) roundtrip coach airfare tickets for
each
three months of relocation in Israel (exclusive of Employee’s first relocation
trip and relocation back to New York at the culmination of the Relocation
Period) between New York and Israel, (ii) monthly living, travel and
miscellaneous expenses in Israel not to exceed $1,500, and (iii) the premiums
for any additional medical coverage necessary to cover the Employee while
abroad
to the same extent as he would be covered in the United States (the “Covered
Expenses”). The parties agree that the Covered Expenses shall constitute the
exclusive payment to Employee for his expenses incurred during the Relocation
Period. The Company shall pay such Covered Expenses at such times and in
the
same manner as the Company customarily reimburses its other employees for
amounts expended on behalf of the Company.
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2.3. Extent
of Service.
Employee agrees to use his best efforts to carry out his duties and
responsibilities under Section 2.1 hereof and, consistent with the other
provisions of this Agreement, to devote substantially all of his business
time
thereto. Notwithstanding the foregoing, the Company acknowledges that between
the Effective Date and the Travel Date, Employee will be permitted to devote
a
portion of his business time to personal arrangements in preparation for
the
Relocation Period and that during such period, his failure to devote to the
Company the requisite efforts and business time shall not be considered in
any
way a breach of this Agreement; provided, however, that Employee agrees to
make
himself available, to as much extent possible, for business matters concerning
his duties and responsibilities and to reasonably accommodate the Company’s
needs.
2.4. Base
Salary.
For all
the services rendered by Employee hereunder, the Company shall pay Employee
a
base salary (“Base Salary”) to his designated account in the United States,
commencing on the Effective Date, at the annual rate of one hundred twenty
thousand Dollars ($120,000), payable in installments at such times as the
Company customarily pays its other U.S. employees (and subject only to such
withholdings as the Company’s U.S. employees are subject to).
2.5. Benefits;
Retirement and Savings Plans.
Employee shall be entitled to participate in the Company’s standard medical
insurance plans and in all employee retirement or savings plans and programs
made available to the Company's U. S. employees generally, as such plans
may be
in effect from time to time and subject to the eligibility requirements of
such
plans.
2.6. Vacation;
Holidays; Sick Days.
Employee shall be entitled to fifteen (15) days 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.
3. Termination.
Employee's employment shall terminate upon the occurrence of any of the
following events:
3.1. Voluntary
Termination By the Company.
The
Company may terminate the Employee’s employment with the Company without cause
at any time upon one (1) month written notice. The Company shall have the
right,
in its sole discretion, to require Employee to continue working for the Company
during the notice period.
3.2. Disability.
The
Company may terminate Employee's employment if Employee 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 Employee's employment
for Disability, Employee shall be entitled to receive under this Agreement
the
following:
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(a) The
Company shall pay to Employee any amounts earned, accrued or owing but not
yet
paid under Section 2 above.
(b) Employee
shall receive any other benefits accrued or earned in accordance with the
terms
of any applicable benefit plans and programs of the Company.
3.3. Death.
If
Employee dies while employed by the Company, the Company shall pay to Employee's
executor, legal representative, administrator or designated beneficiary,
as
applicable, (i) any amounts earned, accrued or owing but not yet paid under
Section 2 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 Employee's executors, legal representatives,
administrators, heirs or assigns or any other person claiming under or through
Employee.
3.4. Cause.
The
Company may terminate Employee’s employment at any time for “Cause” upon
immediate written notice to Employee, in which event all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued.
Employee 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 3.4, 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, only as such relates to his Employment;
(ii) Employee’s willful misconduct which materially injures the Company; (iii)
Employee’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) the gross failure by Employee to adequately
perform his duties to assist with the integration of the BAE into the Company’s
product(s) and further develop the BAE. The Employee may contest any termination
pursuant to Section 3.4 of this Agreement.
3.5. Notice
of Termination.
Any
termination of Employee's employment shall be communicated by a written notice
of termination to the other party hereto given in accordance with Section
9
below.
4. Covenant
Not to Compete.
Employee acknowledges that the nature of the Company's business is such that
if
Employee were to become employed by, or substantially involved in, the business
of a competitor of the Company while employed by the Company and for twelve
(12)
months following the termination of Employee’s employment by the Company, for
whatever reason, it would be very difficult for the Employee 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, Employee 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 Employee’s employment as described above, or is a
customer of the Company at the time of the termination of the Employee's
employment. In addition, during the Non-Compete Period, Employee 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 Employee 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.
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5. Non-Disclosure.
Employee
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, copyrights, know how, source code, software programs,
models, compilations, algorithms, flow charts, techniques, systems, processes,
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 Employee on a non-confidential basis and not in contravention
of
applicable law from a source which is entitled to disclose such information
to
Employee. Employee 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. Employee 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. Employee 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, Employee agrees to return such papers,
records and computer software and data immediately upon his termination).
Employee acknowledges that all such papers, records, computer software and
data
or copies thereof are and remain the property of the Company. Notwithstanding
anything in this Agreement to the contrary, the Employee may disclose
Confidential Information to the extent necessary in relation to legal
proceeding, threatened legal proceedings and financial and tax matters related
to or in connection with the Purchase Agreement, this Agreement and the rights
and obligations under both agreements as well as the other Related Agreements.
In the event that the Employee is requested to disclose Confidential Information
by operation of law, court order or other governmental demand (“Process”),
the
Employee shall immediately notify the Company of such Process and shall not
disclose such Confidential Information in response to such Process, to the
extent requested protection from a legal or governmental authority with
jurisdiction to offer protection in the face of such Process has been
granted.
6. Intellectual
Property Rights.
Employee
agrees that all proprietary information, including but not limited to, trade
secrets and know-how, corporate documents and records, investor-lists, policies,
copyrights, inventions, source code, software, methods, innovations,
improvements, discoveries or developments relating to the Company’s business or
method of conducting business and to the BAE, including new contributions,
improvements and ideas, whether or not patentable, copyrightable or in any
other
way legally protected (“Inventions”),
conceived or made by Employee, either solely or jointly with others, during
Employee’s employment with the Company which arise out of Employee’s employment
or exposure to Confidential Information shall belong to and be the sole property
of the Company. Employee assigns to the Company any rights Employee 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.
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7. Survivorship.
The
respective rights and obligations of the parties under this Agreement shall
survive any termination of Employee's employment to the extent necessary
to the
intended preservation of such rights and obligations.
8. Governing
law; Forum.
This
Agreement shall be governed by, and construed and interpreted under, the
laws of
the State of New York. Any legal claim lodged by one party against the other
arising from the terms of this Agreement shall be adjudicated only by the
appropriate court in the State of new York.
9. 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 or sent via facsimile, as follows (provided that notice of
change
of address shall be deemed given only when received):
If
to the
Company, to:
Answers
Corporation
000
Xxxx
00xx
Xxxxxx
Xxxxx
0000
Xxx
Xxxx,
XX 00000
Facsimile:
000-000-0000
Attention:
Xxxxxx X. Xxxxxxxxxxx, CEO
If
to
Employee, to:
Xxxxx
Xxxxxxxxxx
0000
Xxx
X, Xxx 0
Xxxxxxxx,
XX 00000
Facsimile:
______________
or
to
such other names or addresses as the Company or Employee, as the case may
be,
shall designate by notice to each other person entitled to receive notices
in
the manner specified in this Section.
10. Contents
of Agreement; Amendment and Assignment.
(a) This
Agreement, the Purchase Agreement and the Related Agreements set 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 and executed on its behalf
by an
officer and by Employee.
(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 employment duties and responsibilities of Employee
under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Employee. 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.
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11. 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.
12. 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.
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 U. S. tax
withholding, and the Company shall withhold from any payments under this
Agreement all federal, state and local income 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, Employee shall bear all
expense of, and be solely responsible for, all federal, state and local income
taxes due with respect to any payment received under this
Agreement.
15. Company
Policies.
Employee
hereby acknowledges receipt, together with this Agreement, of the Company’s (i)
Code of Ethics and Business Conduct, attached hereto as Exhibit
A
(the
“Code”)
and
(ii) Procedures and Guidelines Governing Xxxxxxx Xxxxxxx and Tipping, attached
hereto as Exhibit
B
(the
“Xxxxxxx
Xxxxxxx Policy”;
collectively, the “Policies”),
and
confirms that he has read and understood the provisions contained in the
Policies, recognizes that the Policies apply to all Company employees and
firmly
undertakes to abide by their provisions at all times.
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IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
this Agreement as of the date first above written.
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Answers
Corporation
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| By: | /s/ Xxxxxx Xxxxxxxxx | |
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Name:
Xxxxxx Xxxxxxxxx
Title:
Chief Financial Officer
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| Employee | ||
| /s/ Xxxxx Xxxxxxxxxx | ||
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Xxxxx
Xxxxxxxxxx
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