Exhibit 10.1

EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into to be
effective as of March 23, 2007 by and between ANTs software inc., a Delaware
corporation (the “Company”), and the Executive set forth on the signature page
hereof (the “Executive”).
 
NOW, THEREFORE, in consideration of the agreements of the parties contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1.  Employment. The Company hereby employs Executive to serve in such capacity
and with such title as are set forth on the signature page hereto (the
“Position”), and Executive agrees to serve in the Position with the Company, or
to serve in such other position or positions as the Company may determine in its
sole discretion. The Executive hereby accepts such employment and agrees to
devote his or her best efforts and his or her full time and attention
exclusively to the business and affairs of the Company, as such business and
affairs now exist and as they may be hereafter changed or augmented, under and
pursuant to the general direction of the Board of Directors of the Company (the
“Board”) and the Chief Executive Officer of the Company. The Company shall
retain full direction and control of the manner, means and methods by which the
Executive performs the services for which he or she is employed hereunder and of
the place or places at which such services shall be rendered.
 
2.  Term of Employment. The term of the Executive’s employment shall continue
until terminated by either party pursuant to the terms of this Agreement.
Executive is employed by the Company “at will” and Executive’s employment may be
terminated at any time, by Executive or the Company, for any reason and for no
reason.
 
3.  Compensation and Expenses.
 
(a)  Salary. As compensation for the Executive’s services during the term of the
Executive’s employment hereunder, the Company shall pay the Executive an annual
salary (the “Salary”) as is set forth on the signature page hereto, payable in
24 equal semi-monthly installments, subject to required tax and other fiduciary
withholding requirements. Both Executive and Company agree and acknowledge that
Executive’s Salary may change following the date hereof, and the provisions
hereof apply to the then outstanding Salary.
 
(b)  Expenses. The Company shall reimburse the Executive for all reasonable and
necessary business expenses incurred by him or her in connection with the
performance by him or her of his or her duties hereunder and in accordance with
the Company’s policies and procedures with respect thereto, as they may be
changed from time to time.
 
(c)  Stock Options. As of the date of this Agreement Executive has been granted
the Stock Options set forth on Attachment 1 hereto, and the aggregate number of
shares subject to such Stock Options is set forth on the signature page hereof.
Both Executive and Company agree and acknowledge that the Stock Option grants
and the number of shares of common stock subject to such Stock Options may
change following the date hereof, and the provisions hereof apply to all such
then outstanding Stock Options.
 
(d)  Vacation. The Executive shall be entitled to that number of annual paid
personal days as are set forth on the signature page hereto. Personal days taken
for vacations shall be taken at such times as the Executive and the Company may
mutually agree.
 
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(e)  Other Employee Benefits. The Executive shall be entitled to participate in
the Company’s health insurance plans or programs and such other benefit plans as
may be adopted, from time to time, by the Company, to the extent that they, by
their terms, cover the Executive. Nothing in this Agreement shall preclude the
Company or any affiliate of the Company from terminating or amending any
employee benefit plan or program at any time or from time to time.
 
(f)  Insurance. The Company may, at its discretion, secure at its own expense
certain insurance policies, including without limitation, a “key-man” life
insurance policy upon the life of the Executive, payable to the Company in the
event of the Executive’s death. The Executive agrees that any such insurance
policy shall be for the Company’s benefit only and acknowledges that no person
claiming by or through the Executive shall have any right to the proceeds of
such insurance policies. The Executive agrees to execute all documents and take
all acts reasonably requested by the Company to secure and enjoy the benefits of
such insurance policies.
 
4.  Restrictive Covenants.
 
(a)  Other Business Ventures. During the term of the Executive’s employment
hereunder, the Executive shall not, without the prior approval of the Board,
directly or indirectly, either as an officer, director, employee, agent,
advisor, consultant, principal, stockholder, partner, owner or in any other
capacity, on his own behalf or otherwise, in any way engage in, represent, be
connected with or have a financial interest in, any business which is or, to the
best of his or her knowledge, is about to become competitive with the business
of the Company; provided, however, that nothing herein contained shall be deemed
to prohibit the Executive from being a passive investor owning up to 1% of any
class of outstanding securities of any company whose stock is publicly traded.
 
(b)  Proprietary Information and Inventions Agreement. The Executive agrees that
the Executive’s employment by the Company is conditioned upon the Executive
promptly signing an agreement in substantially the form of the Company’s
standard form of Proprietary Information and Inventions Agreement.
 
5.  Termination of Employment by Executive For Good Cause. In the event the
employment of the Executive with the Company is terminated by the Executive for
“Good Cause,” the Executive shall immediately and fully vest in all of the
Severance Benefits set forth in Section 7 below. For purposes of this Section 5,
“Good Cause” shall be defined as: (i) a decrease in Executive’s compensation of
greater than twenty-five percent (25%) of his or her compensation (x)
immediately prior to such decrease or (y) in the aggregate over a period not
exceeding two years (not including any decrease in compensation that is applied
to each of the Company’s executive officers equally), (ii) a material change in
Executive’s corporate position, title or responsibilities, or (iii) the
relocation of the principal offices of the Company more than 80 miles from their
present location without the Executive’s consent. In the event of the existence
of Good Cause, the Executive may terminate his employment at any time.
 
6.  Termination of Employment Without Cause. In the event the employment of the
Executive with the Company is terminated without “Cause” after six months of
employment, the Executive shall immediately and fully vest in all of the
Severance Benefits set forth in Section 7 below. For purposes of this Section 6,
“Cause” shall be defined as the Executive’s: (i) violation of any material
provisions of any written agreement between the Company and Executive, (ii)
being convicted of a felony and lapse of all rights of appeal, or (iii)
commitment of any act of willful misconduct, gross negligence, or dereliction of
his or her duties.
 
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7.  Severance Benefits and Election. In the event that the employment of the
Executive is terminated (i) by the Executive for Good Cause pursuant to Section
5 or (ii) by the Company without Cause pursuant to Section 6, Executive shall
have thirty days to elect the Release Severance or the No-Release Severance as
set forth below:
 
(a)  No-Release Severance. Executive may elect to receive the following
severance benefits without agreeing to a general release of all claims known and
unknown: The Company shall pay Executive: (i) a lump sum equal to six month’s
base salary of the Executive; (ii) any and all accrued but unpaid bonuses and
(iii) any and all target bonuses for the six month period following such
termination of employment, in all such cases within 30 days from the effective
date of the termination (the “No-Release Severance”).
 
(b)  Partial Option Acceleration. Additionally, upon election of the No-Release
Severance, the Executive shall (A) immediately and fully vest in and have the
right to exercise 75% of any and all unvested stock options granted to
Executive, whether or not otherwise vested, subject to the provisions concerning
exercisability and restrictions on transfer of such options, set forth below.
 
(c)  Release Severance. Executive may elect to receive the following severance
benefits upon agreeing to a general release of all claims known and unknown: The
Company shall pay Executive: (i) a lump sum equal to twelve month’s base salary
of the Executive; (ii) any and all accrued but unpaid bonuses and (iii) any and
all target bonuses for the twelve month period following such termination of
employment, in all such cases within 30 days from the effective date of the
termination (the “Release Severance”). 
 
(d)  Full Option Acceleration. Additionally, upon election of the Release
Severance, the Executive shall immediately and fully vest in and have the right
to exercise any and all unvested stock options granted to Executive, whether or
not otherwise vested, subject to the provisions concerning exercisability and
restrictions on transfer of such options, set forth below.
 
(e)  Election Period. The thirty day period during which Executive may elect the
Release Severance or the No-Release Severance shall commence the day following
Executive’s last day of employment and shall expire on the 31st day following
Executive’s last day of employment. In the event that Executive does not timely
elect the Release Severance or the No-Release Severance, it shall conclusively
be deemed election of the No-Release Severance and the right to elect the
Release Severance shall be forever waived. Nothing herein shall create any
obligation on the Company to notify Executive of his or her right to elect the
Release Severance or the No-Release Severance.
 
(f)  Restrictions on Option Exercise and Stock Sale. Executive and Company agree
that, in the event that the employment of the Executive is terminated (i) by the
Executive for Good Cause pursuant to Section 5 or (ii) by the Company without
Cause pursuant to Section 6, then the following shall apply:
 
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(i)  The exercise period of all of Executive’s Stock Options shall be extended
to and exercisable until, that date which is the fifth year anniversary of the
date of termination of Executive’s employment; and
 
(ii)  Executive covenants and agrees that, unless (x) there is a Corporate
Transaction, as defined in the Stock Option Agreements by and between Executive
and Company, or (y) the Company conducts a secondary stock offering in which the
Company sells not less than 50% of its shares of common stock outstanding
immediately preceding such offering, then (a) he or she will not sell any shares
purchased under Executive’s Stock Options prior to the first six months
following the date of termination of Executive’s employment, and (b) he or she
will not sell more than 20% of the common stock purchased in exercise of any of
Executive’s Stock Options during any three month period thereafter. Executive
acknowledges and agrees that the Company can place stop transfer instructions to
assist in enforcing these covenants.
 
(g)  Release. In the event that Executive elects the Release Severance, then
Executive agrees as follows: Executive, on behalf of himself or herself and his
or her heirs, successors and assigns, hereby fully releases and forever
discharges the Company, and its officers, directors, agents, employees,
attorneys, parents, affiliates, and subsidiaries (the “Released Parties”), from
any and all claims, actions and liabilities of any kind or character whatsoever,
arising in law or in equity, known or unknown, suspected or unsuspected, that
Executive has ever had, now has or may now have against the Released Parties,
including, without limitation, all claims directly or indirectly related to or
arising out of Executive’s employment by the Company, the performance of his
duties during that employment, and/or the termination of or his resignation from
that employment. This waiver and release specifically includes, but is not
limited to, all claims, if any, whether arising in tort or in contract, related
to Executive’s employment, including any and all claims for wrongful discharge
or wrongful termination; claims for alleged violation of public policy or breach
of implied covenant of good faith and fair dealing; claims for breach of
fiduciary duty; claims for negligent or intentional infliction of emotional
distress; claims arising in connection with Executive’s compensation, benefits,
warrants and/or stock options; claims for breach of express or implied contract
or for further monetary compensation by way of additional salary or bonus
allegedly due Executive by reason of his employment with the Company; and all
other claims, based on common law or federal or state statute, including claims
for discrimination based on age arising under state statute or the federal Age
Discrimination in Employment Act, the Older Workers’ Benefits Protection Act, or
any similar federal or state law prohibiting age discrimination.
Executive further understands and expressly agrees that this Release
specifically extends to all claims, whether those claims are presently known to
the party or not, or suspected by the party or not. Executive agrees that he or
she has not assigned or transferred, in whole or in part, any of the claims,
actions or liabilities released by him or her herein. By signing below,
Executive expressly waives the benefits of Section 1542 of the California Civil
Code, which provides:
“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release which if
known by him must have materially affected his settlement with the debtor.”
 
8.  Confidentiality. Executive agrees that the terms and conditions of this
Agreement are and shall remain strictly confidential, and that he or she will
not disclose those terms and conditions to any third party (i) except for
Executive’s tax or legal advisors or his spouse, or (ii) unless compelled by law
to do so.
 
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9.  Noninterference. Executive agrees that, during the term of his or her
employment and for a period of 12 months thereafter, he or she shall not, on his
or her own behalf or on behalf of any other person, solicit or in any manner
influence or encourage any current or prospective customer, employee or other
person who has a business relationship with the Company or any affiliate, to
terminate or limit in any way their relationship with the Company, or interfere
in any way with such relationship. For purposes hereof, (i) the term person is
to be construed in the broadest sense and means and includes any natural person,
company, limited liability company, partnership, joint venture, corporation,
business trust, unincorporated organization or any governmental authority, and
(ii) a person shall be considered a “prospective” customer or employee if the
Company or any affiliate has entered into discussions or otherwise made contact
with the person for the purpose of any such engagement within the six-month
period prior to any solicitation by the Executive, and such fact is known or
made known to the Executive.
 
10.  Non-Competition. The Executive agrees not to, during his or her employment
and for a period of 12 months thereafter, voluntarily or involuntarily, directly
or indirectly, individually or on behalf of any entity or person, as a partner,
stockholder, director, officer, principal, agent, employee, or in any other
capacity or relationship, engage in, aid, or assist, in any competition with the
Company within the United States of America or any foreign country where the
Company conducts business. The Company and the Executive acknowledge the
reasonableness of this covenant not to compete and the reasonableness of the
geographic area and duration of time which is part of this covenant. The
provisions of this paragraph 10 shall survive the termination of this Agreement
by either party.
 
11.  Voluntary Agreement. Executive expressly acknowledges and warrants that he
or she has read and fully understands this Agreement; that he or she have had
the opportunity to consult with legal counsel of his or her own choosing in
order to have the terms and conditions of this Agreement fully explained to him
or her; that he or she is not executing this Agreement in reliance on any
promises, representations or inducements other than those set forth herein; that
he or she understands he or she is giving up legal rights by signing this
Agreement; and that he or she is executing it voluntarily, free of any duress or
coercion, after due deliberation, with a full understanding of what it means to
do so.
 
12.  Mediation, Venue and Arbitration. If a dispute arises in connection with
this Employment Agreement, Executive and Company agree that any legal action,
mediation or arbitration will be conducted in the court, arbitration or other
body having subject matter jurisdiction, in the city of Burlingame, California,
and venue shall be proper only therein. Any dispute, controversy or claim
arising out of or relating to provisions of this Employment Agreement shall be
finally settled by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (AAA) or the Judicial Arbitration
and Mediation Service (JAMS), or other mutually acceptable arbitral body, in
effect on the date of this Agreement. The arbitration tribunal shall adopt rules
of procedure supplementary to the rules of the AAA or JAMS as it deems equitable
under the circumstances. An award rendered by the arbitrator shall be final and
binding, and judgment may be entered upon it in any court having jurisdiction.
In no event shall this subsection be construed as conferring upon any court
authority or jurisdiction to inquire into or review such award on its merits.
 
13.  Miscellaneous.
 
(a)  Governing Law. This Agreement shall be governed by, and construed,
interpreted and enforced in accordance with, the internal laws of the State of
California without reference to principles of conflict of laws.
 
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(b)  Captions. The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
 
(c)  Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements, arrangements and understandings, written or
oral, between the parties hereto with respect to the subject matter hereof.
 
(d)  Further Assurances. Each party hereto shall furnish to the other party
hereto such instruments and other documents as the other party may reasonably
request for the purpose of carrying out or evidencing the transactions
contemplated by this Agreement.
 
(e)  Attorneys’ Fees. If any lawsuit or other action or proceeding relating to
this Agreement is brought by either party hereto against the other party hereto,
the prevailing party shall be entitled to recover reasonable attorneys’ fees,
costs and disbursements (in addition to any other relief to which the prevailing
party may be entitled).
 
(f)  Notices. Any notice, request, consent or approval required or permitted to
be given under this Agreement or pursuant to law shall be deemed effective upon
the actual receipt by the Executive or the agent for service of process for the
Acquirer or Company, as applicable.
 
(g)  Amendments; Waivers. This Agreement may be amended, modified, superseded,
canceled, renewed or extended and the terms or covenants hereof may be waived,
but only by a written instrument executed by the Executive and the Company or
the Acquirer as the case may be. The failure of either party at any time or
times to require performance of any provision hereof shall in no manner affect
such party’s right at a later time to enforce the same. No waiver by either
party of the breach of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
 
(h)  Severability. Any term or provision of this Agreement which is prohibited,
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent (but only to the extent) of such prohibition,
invalidity or unenforceability without invalidating or affecting any other term
or provision hereof, any such prohibition, invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such term or provision
in any other jurisdiction.
 
(i)  Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
 
(j)  Successors and Assigns. The terms and provisions of this Agreement shall
inure to the benefit of, and shall be binding upon, the successors and assigns
of the Company and/or Acquirer. In view of the personal nature of the provisions
of this Agreement to be performed by the Executive, the Executive shall not have
the right to assign or transfer any of the obligations or rights and benefits
hereunder, nor shall said rights and benefits be otherwise subject to voluntary
or involuntary alienation except as provided herein.
 
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(k)  No Rules of Construction.No rules of construction are intended by the
parties hereto and none shall be employed or used in the interpretation of this
Agreement. For all purposes, both parties hereto shall be deemed joint authors
hereof.
 
 
IN WITNESS WHEREOF, the parties have duly executed this Separation Agreement as
of the date first above written.
 

           
ANTS SOFTWARE INC.,
              a Delaware Corporation                                            
                         
By:
           
Name and Title: 
  Joseph Kozak - President and CEO          
Address: 
  700 Airport Blvd., Suite 300               Burlingame, CA 94010              
                                                            EXECUTIVE          
                                       
By:
           
Name:
  Francis Ruotolo          
Address: 
  C/O ANTs software inc.               700 Airport Blvd. Suite 300              
Burlingame, CA 94010                              
Position: 
  Chairman            
Annual Salary: 
  $200,000            
Annual Eligible Bonus:
  None            
Total Stock Options Granted:
  1,002,500      

 

 

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Attachment 1

Outstanding Stock Options - Francis Ruotolo

No. of Shares
Grant Number
Expiration Date
Exercise Price
20,000
133
08/06/12
$0.52
20,000
165
01/29/14
$0.81
730,000
17
01/08/11
$2.75
77,500
71
10/03/11
$2.00
155,000
90
11/28/11
$2.00
 
 
 
 
                               

 
 
 
 
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