AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Agreement is made as of the 1st day of March, 1999 between
Go2Net, Inc., a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxxx, an individual residing at 000 0xx Xxxxxx, #000, Xxxxxxx,
Xxxxxxxxxxx 00000 (the "Executive"). This Agreement amends and restates in
its entirety the Employment Agreement dated as of March 1, 1996 between the
Company and the Executive.
RECITALS
WHEREAS, the Company currently employs the Executive as the Chief
Executive Officer of the Company, and the Executive desires to continue to
serve as the Chief Executive 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
Executive 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 Executive Officer of the
Company, the Executive shall, subject to the direction of the Board of
Directors 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 Board of Directors of the Company. During the Employment Term, the
Executive will also be entitled to continue to serve as a member of the
Company's Board of Directors.
2. PERFORMANCE; LOCATION OF EMPLOYMENT. 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. From
the date of this Agreement through January 31, 2001, the Executive will
perform his duties hereunder at the Company's executive offices located in
Seattle, Washington. Thereafter, the Executive may elect to perform his
duties hereunder at an office located in California.
3. EMPLOYMENT TERM. The term of employment under this Agreement shall
begin on the date of this Agreement and continue until January 31, 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
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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
Thirty Six Thousand Dollars ($36,000.00). The base salary may be reviewed
periodically by the Board of Directors, provided that the base salary shall
not be decreased during the Employment Term.
(b) BONUS. The Executive shall be eligible to participate in a
bonus plan of the Company pursuant to which he will be entitled to receive an
annual bonus equal to a specified percentage of the annual base salary then
in effect, subject to achieving specified performance objectives. The actual
amount of such bonus and the performance objectives for the payment thereof
shall be as mutually established by the Executive and the Compensation
Committee of the Board of Directors of the Company.
(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 an automobile of like
quality used by other executives of the Company and a parking space in 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, but in no
case shall it be less than three weeks of paid vacation during each year of
the Employment Term 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.
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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, or (ii) 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
Executive Officer and to the Board of Directors 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.
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(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 equal to the longer of the remainder of the
Employment Term or 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 any Subsequent Employment Term (i) the Executive
shall also be entitled to receive 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 to purchase Common
Stock 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. The Company agrees that, 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.
(c) TAX PAYMENTS. In the event that any compensation payable by the
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Company under this Agreement or otherwise (including any deemed compensation
attributable to the acceleration of stock options) constitutes an excess
parachute payment which is subject to tax under Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Excise Tax"), the Company shall pay to
the Executive an additional amount (the "Gross-Up Amount") which, after the
payment of all Federal, state and local income taxes thereon (assuming the
Executive is at the highest marginal Federal and applicable state and local
tax rate in effect on the date of payment of the Gross-Up Amount) and payment
of the Excise Tax on the Gross-Up Amount, is equal to the Excise Tax payable
by the Executive on such excess parachute payment. The Gross-Up Amount
payable with respect to each excess parachute payment shall be paid by the
Company coincident with payment of such excess parachute payment.
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
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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. Furthermore, the Executive agrees to indemnify the Company
against any claims brought by any predecessor employer alleging breach of
employment contract or fiduciary responsibilities.
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. If the Company elects to purchase such insurance, the Executive may
elect to designate a beneficiary for up to $1 million of such insurance.
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:
Xxxxxxx X. Xxxxxxxx
000 0xx Xxxxxx, #000
Xxxxxxx, XX 00000
If to the Company:
Go2Net, Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn.: President
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
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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 constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof and it 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.
* * *
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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:
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Name: Xxxx Xxxxxxx
Title: President
EXECUTIVE
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Xxxxxxx X. Xxxxxxxx
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